← MarTech Podcast ™ // Marketing + Technology = Business Growth
MarTech Podcast ™ // Marketing + Technology = Business Growth
Rakuten’s Business Model – Size, Scope & Mission
00:12:22
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- [00:00]
Benjamin Shapiro
The Martech Podcast is a proud member of the iHear Everything Podcast Network. Looking to launch or scale your podcast, iHear everything delivers podcast production, growth and monetization solutions that transform your words into profit. Ready to give your brand a voice? Then visit iheareverything.com.
- [00:26]
John Cintross
From advertising to software as a service to data across all of our programs and clients, we've seen a 55 to 65% open rate. Getting brands authentically integrated into content performs better than TV advertising. Typical life span of an article is about 24 to 36 hours. If we're reaching out to the right person with the right message and a clear call to action, then it's just a matter of timing.
- [00:54]
Benjamin Shapiro
Welcome to the Martech Podcast, a member of the I Hear Everything Podcast Network. In this podcast, you'll hear the stories of world class marketers that use technology to drive business results and achieve career success. Here's the host of the Martech Podcast, Benjamin Shapiro.
- [01:15]
John Cintross
Welcome to the Martech Podcast. I'm Benjamin Shapiro, the Executive Producer here and today we've got a special episode for you which is guest hosted by John Cintross, the President of Mutinex. John and the Mutinex organization help marketers get more value out of their work by knowing more about the value of past decisions and predicting the value of future decisions through GrowthOS, an AI driven marketing attribution software. And today, John is going to take the mic and have a conversation with Sue Lee Rivera, the Vice President of Marketing at Rakuten. All right, here's a special episode of the Martech Podcast guest hosted by John Cintross, the President of Mutinex.
- [01:54]
Sue Lee Rivera
Hello marketers, My name is John Cintross from Mutinex, and joining me today is Sule Rivera, who is the SVP of Marketing at Rakuten Rewards, which since its founding in 1997 has helped shape the way people shop online, offering cash back deals and shopping rewards on the world's largest selection of products and services. To date, its 17 million members in the US have earned over 3.7 billion in cash back at their favorite stores. And today Suli and I are going to be discussing Rakuten's business model, its size, its scope and mission.
- [02:31]
John Cintross
But before we get to today's interview, I want to tell you about what I'm listening to. Ever wanted to sit down to a candid conversation with marketing leaders from the world's biggest brands? The current podcast is your chance. On the current podcast you'll find exclusive interviews with the experts and trendsetters who are on the front lines of digital advertising and they always leave the ad tech jargon at the door. So subscribe to the current@www.thecurrent.com or anywhere you get your podcasts today.
- [03:03]
Sue Lee Rivera
Okay, here is my conversation with Suli Rivera, the SVP of Marketing at Rakuten Rewards. Sue Lee, thank you so much for joining us today. It's a pleasure to have you on the Martech podcast.
- [03:15]
Thanks for having me.
- [03:16]
Okay, perhaps let's start for the people on the call that aren't familiar with Rakuten, let's start with a general description of your unique business model and perhaps you can explain to us if that's evolved over time.
- [03:28]
So Rakuten is the largest, most established and we have a high reputation as a shopping, rewards and cash back program. So as a marketplace, we connect buyers or shoppers with their favorite merchants or retailers. So out of the 4,200 different brands that we work with, some of them you would recognize as Nike, Sephora, Macy's, BloomingDale's, Petsmart, Expedia, etc. So in terms of the breadth of categories, we not only offer brands such as in fashion and beauty, but we also cover verticals such as travel, ticketing, restaurants, etc. So through our app we have an extension as well as our website. You can shop through Rakuten at all of your favorite retailers or merchants and experiences and get cash back along the way. The way that that works with our merchants is they offer special deals or special cash back rates based on the purchases that our shoppers make. And to that extent we have over 17 million members, as I mentioned, 4200 different brands and to date we've had our members earn somewhere over 4.6 ish billion in cash back. So we are extremely established in the sense that we've been in the market for quite a while. We have deep relationships with our merchants which helps us be able to provide fairly personalized offers and higher cash back rates than the market rate offers to our buyers and merchants.
- [04:57]
Okay, amazing. And has the model evolved over time as we did it start the same way as it is currently or what's the journey been like?
- [05:05]
Yeah, so we've certainly evolved in the sense of the experience and for our members having much more of a personalized experience to say that where the kind of affiliate market sits, the model is similar in the sense of our merchants don't necessarily need to pay marketing dollars unless a deal is closed or a sale is closed of a shopper buying a product versus other marketing channels. Such as TV or paid social where it's more of a sunk cost. So in that sense the model it's fairly similar. What has evolved certainly at Rakuten is like I mentioned, the depth of personalization, the ability to have one to one offers based on bringing new members onto the platform and to new merchants as well. We have a fairly high level brand in terms of we provide not just a tool but we really think of it as the joy or fun of shopping. So through the experience that we've developed with the app as well as our site and email, et cetera, our members not only love saving, but it becomes a very fun kind of anticipation experience around everyday shopping but also tent pole moments throughout the year.
- [06:12]
That sounds like a lot of fun as you said so clearly you've become one of the largest E commerce companies in the world. Can you elaborate on the scope of your global operations? Like how different is the marketplace in different markets and how do you sort of adapt to local market market expectations and culture, et cetera.
- [06:28]
So as you may know, Rakuten is headquartered or initially started in Japan. Rakuten International, which is where the US Rewards business sits, covers not only the US but we offer cash back in Canada UK as well as we have a presence in Germany, France and Spain. So to your question on how do those different geos operate? Well certainly the merchant mix is the number one thing that changes based on what merchants are available in Canada versus the U.S. even there's quite a change. So the localization really comes down to number one, treating each of those business operations individually in terms of the relationships with merchants, the data personalization that we have with our members and how we communicate with them, what preferences are even in terms of our media mix, how are we acquiring members changes based on each of those GEOs based on localized preferences.
- [07:23]
That sounds very, very sensible. Sule, can you talk about the loyalty program? Clearly customer retention is important I would imagine to your business. Can you talk about retention and can you talk about the role that the loyalty program plays in making sure that you have low churn and high customer satisfaction?
- [07:41]
So for us, loyalty like you mentioned or retention is kind of the number one thing we focus on day in, day out. It hits us in a couple of areas. Number one is ensuring that we have a really high quality and personalized experience. Experience because without an experience that brings people back, you can talk to them as much as possible or try to email them, but really there's nothing stickier than making sure it's a great experience that includes not Only enhancements from a product perspective, or making sure that the merchants we're connecting you with or the retailers we're connecting you with are the right ones. But it's also making sure that the full flow of getting your cash back as quick as possible, building out additional rewards outside of cash back. So we've branched into different partnerships to offer things such as early access to tickets through Live Nation. Through our relationship with the warriors, we offer many benefits. So there's additional things that we look at as loyalty is cashback plus a rewarding experience. Secondly, the thing that we look at too is our members are actually one of our best marketing channels. So by bringing in new members through referral programs or people basically talking to their friends, it continues to to enhance not only their loyalty to us, but the excitement of bringing new members into Rakuten.
- [08:58]
And how are you measuring loyalty? Like what's some of the metrics that you think about or look to gauge success of your initiatives?
- [09:06]
We have three main categories that we think about at a high level. Our member pool. So on an annual basis, how many new members we bring to the platform. The second biggest area is existing members and how are we bringing them back from a retention percentage program each year. And then the third area is actually reactivating members. So a huge amount of our acquisition efforts throughout the year are about bringing people through who maybe tried it several years ago when we were called Ebates, but then now they are coming back with Rakuten or perhaps they changed devices and they didn't necessarily reinstall the browser extension. It's going back to those individuals. So we evaluate at the macro level. But then really we have quite a diverse segmentation across each of those main cohorts. We break them down into the previous time that they the tenure of their shopping, the quantity, like the volume of shopping, as well as the frequency. And as well, we focused this past year on developing a churn model that basically anticipates if there are certain behaviors that we see from a shopping habit that maybe we're losing a member.
- [10:15]
Benjamin Shapiro
Right?
- [10:15]
Sue Lee Rivera
Like maybe they haven't been as active. And that's where we have focused on certain segments about really making sure that we are re activating or retaining those buyers.
- [10:24]
So just to close out the first part of our interview, Suli, I wonder if I can ask you about differentiation. I mean, as you think about other global giants like Amazon and Alibaba, what's the difference with you? And what advantage do you think you provide over competitors such as that?
- [10:39]
So for us, it's about connecting with our buyers with their favorite brands. So in lieu of acting as the kind of destination for shopping and shipping, we are really connecting you with the top brands such as, like I mentioned, the Nike, Lululemon, petsmarts of the World, Macy's, Neiman Marcus. You can shop where you want outside of those behemoths but also get rewarded for it. And certainly in a time like now, I mean, being able to get cash back on top of the other benefits you have on credit cards and through your banking cards, it's all additive benefit of savings, which obviously right now is one of the key benefits of being able to make sure that we're helping our members save money.
- [11:19]
That's fantastic. Thank you so much for sharing that with us today. So okay, that wraps up this GTM episode of the Martech podc. I want to thank Sue Lee Rivera from Rakuten Rewards for joining us. In part two of our interview, which we'll publish tomorrow, Sue Lee and I are going to discuss how Rakuten uses data to drive customer personalization.
- [11:38]
John Cintross
Okay, that wraps up this episode of the Martech Podcast. Thanks to our guest host, John Centross, the president of Mutinex, and his guest Sue Lee Rivera, the Senior Vice President of Marketing at Rakuten. If you'd like to get in touch with John or Su Lee, you can find a link to their LinkedIn profiles in our show Notes. Or you could visit John's website, Mutinex Co. Or if you want to get in touch with Suli Rivera, you can head over to rakuten.com a special thanks to the Current Podcast for sponsoring today's interview. If you're looking for candid conversations with marketing leaders from the world's biggest brands, then give the Current Podcast a listen. On the Current Podcast, you'll find exclusive interviews with experts and trendsetters who are on the front lines of digital advertising, and they always leave the ad tech jargon at the door. So subscribe to the current@www.thecurrent.com or anywhere you get your podcasts today. Just one more link in our show Notes I'd like to tell you about. If you didn't have a chance to take notes while you were listening to this podcast, head over to martechpod.com where we have summaries of all of our episodes and contact information for our guests. You can also subscribe to our weekly newsletter, and you can even send us your topic suggestions or your marketing questions, which we'll answer live on our show. Of course, you can always reach out on social media. Our handle is martechpod. M A R T E C H P o D on LinkedIn, Twitter, Instagram, and Facebook. Or you can contact me directly. My handle is benjshap. B E N J S H A P and if you haven't subscribed yet and you want a daily stream of marketing and technology knowledge in your podcast feed, we're going to publish an episode every day this year. So hit the subscribe button in your podcast app and we'll be back in your feed tomorrow morning. All right, that's it for today, but until next time, my advice is to just focus on keeping your customers happy.
- [13:45]
Benjamin Shapiro
Thanks for listening to the MarTech podcast and I hear everything. Production Looking to launch or scale a podcast like this one for your brand? Then visit Iheareverything.