Use Case Podcast – Storytelling About Tango Card With David Leeds

Intro: 00:02 Welcome to RecruitingDaily’s Use Case Podcast, a show dedicated to the storytelling that happens, or should happen, when practitioners purchase technology. Each episode is designed to inspire new ways and ideas to make your business better, as we speak with the brightest minds in recruitment and HR tech. That’s what we do. Here’s your host, William Tincup.

William Tincup: 00:26 Ladies and gentlemen, this is William Tincup, and you are listening to the Use Case Podcast. Today we have David on, from Tango Card, and we’ll be learning about the business case, or the use case for why his prospects and customers pick Tango Card. So let’s just jump right into it. David, would you introduce both yourself and Tango Card?

David Leeds: 00:47 Absolutely. Thanks William, for having me today. So my name is Dave Leeds. I’m the Founder and CEO of Tango Card. Since about 1995, I’ve been an entrepreneur. I’ve lived in various countries around the world, including Denmark, France, the US and China, and really witnessed a lot of change, not just in those areas, but have lived through a few major economic cycles. As we lived through another one right now. In about 2010, I was researching the rewards and incentives area, specifically employee rewards and incentives and recognition, and really recognize that this is one of the many industries that, at the time, would benefit from moving from a physical delivery model to a digital delivery model, and also from isolated solutions to integrated solutions and really, just very simple, modern, common sense business models. And so from that research, Tango Card was born. And so, Tango Card is the proven digital rewards and payments platform that turns each transaction into satisfaction. And we have a number of verticals that we work in, but the largest by far is employee rewards and incentives.

William Tincup: 02:19 What’s interesting about rewards and incentives, is the legacy. It goes way back to service awards. You stay at BNSF for 30 years and you got to watch some stuff, which is great. First of all, it’s nice to be recognized even if it’s tenure based, et cetera, but it has through the years, it’s gone through so many great iterations. Where are we now with recognition? What are you trying to tie it to? Is it performance? Is it engagement? Is it retention? When we solve for, in HR or even as a business when we’re solving for recognition, what are we trying to solve for today?

David Leeds: 03:04 Yeah, I think this is one of the most important questions is, I think to your kickoff, is to really get to what is the business case? Why do we do this? And so, there are a couple things that I think are really important to think about. So maybe the first is really that, companies that choose to focus on employee recognition, employee rewards, employee engagement, statistically have three times higher revenue growth rate than those that don’t. So there’s a very material and tangible reason to do this. The second though, and this one’s always a little bit harder to quantify, but it is just as large is, companies that focus on engagement, rewards incentives, not only engage their employees, but it ends up resulting in way lower turnover.

04:04 And we all know how expensive it is, not just in terms of recruiting dollars and time, but also the amount of time it takes to onboard new employees, to get them engaged in the team, to truly understand the product and the service. So it really is ultimately, this idea of when you focus on rewards and incentives as a company and employee recognition, not only at the end of the day, does your revenue grow faster, but you’re actually managing your cost because you have much lower turnover in the business. So this is the why. I think the stats now are something like 92% of companies use rewards and recognition in some way. And it really is because the business case for doing so is so compelling.

William Tincup: 04:58 Hey, I love this. So I love revenue. I love attrition or dealing with retention related issues, because both are important to the business. Getting back to the Reward Link, making a business case for the business is too powerful. You’re hitting a cost center or profit center. So, done. A couple things with COVID. What have you seen in terms of the shift in people’s mentality around recognition? What have you seen with your clients?

David Leeds: 05:32 Yeah, I think I would maybe divide that into two chapters if you will. So really early in the pandemic. So if you go back to say February, March, April of 2020, this was obviously the time of maybe the most turmoil where everyone overnight, was forced to be everyone in the office company to literally everyone at home, quite literally overnight. And so, what we found a lot of companies started to do was, number one, they were really trying to support their employees while they were working from home. Some had kids that were learning from home. Others had to work from the dining room table because they didn’t have anywhere to work. And so, we saw a lot of companies using things like food delivery and some really new types of rewards that were completely appropriate to the time, but honestly had never really been used before as a specific reward or recognition for what employees were going through.

06:57 So we saw really, a lot of creative use of rewards and incentives during that time. And it really forced us in a really positive way, to expand the types of digital rewards that we had in various countries. And then really, what that has evolved to and we’re still in this second chapter is, not only are people still working from home, but we’re also obviously in this world now, where you can work from anywhere. And so, we’re just seeing that again, companies that are on the leading edge of this are thinking about, how do I give my employees maybe a multi-use gift card that they can use to set up or improve their home office?

07:50 How do I give them maybe coffee types of cards so that they can replicate what used to be a meeting over coffee or something like that at home? Or how do we use other types of restaurants and other types of cards so that people across the globe, frankly, can join a meeting, but the company can still pay for the lunch for that meeting, just like they might have pre COVID? So we’re just seeing companies certainly using our service, for example, doing those types of things in a way that just matches the modern workforce.

William Tincup: 08:35 I love that. And what’s interesting about the global part of this is, and again, because you’re dealing with digital rewards, it’s not physical rewards. Some of this, you can get past some of the things that in France, in Germany in, so and so. Turns out there’s Amazon everywhere. So for good or for better or for worse, it is what it is. So I wanted to ask you about the economic model. Through the years, I’ve seen a number of different models around recognition platforms in terms of the platforms free, but then the company makes a percentage of what’s bought or sold or whatever, through the platform. I’ve seen SAS, traditional SAS. What’s you all’s model in terms, without getting into dollars and cents, but just what’s your model?

David Leeds: 09:32 Sure. Yeah. So let me look at that from two perspectives. So let’s say for example, you’re a company. Let’s just say your Tango Card. We’ll typically establish most companies, a budget that we have for employee recognition, employee rewards, employee incentive. And just to put some math out there, let’s say that’s $10,000 a year. So I, as a company now know that I, across my team can spend $10,000 to do this employee recognition, and so on and so forth. So as a company, what I want is, I want as much of that, as much of those dollars, as much of that $10,000 to go directly to the rewards and the incentives so that I can achieve my business results. And this is the higher revenue growth, and this is the reduced turnover and that kind of thing. So what I’m very focused on is, how do I make sure that little, if any of that is lost through fees and other types of efficiency.

10:51 And so then, from a Tango Card perspective, we really internalized that and said, “Great, what we are going to do is, we’re not going to charge you anything for our platform. We’re not going to charge you anything for the actual delivery of a reward or incentive. We’re not going to charge you for reporting. We’re not going to charge you for recipient support, those types of things.” And so, as you mentioned, the way that we make our own revenue is that, we behind the scenes, negotiate with the various retailers that says, “Hey, if we send a gift card for $100, we’re going to pay you $90. And so, we are able to negotiate in that example, a 10% revenue that we earn and that’s our business model, and that’s how we pay our people and for our technology and so on and so forth. But what’s super important is that, the customer then, is able to take the entire amount of their budget that they have for employee recognition and spend it directly on that, to get the business results that they need.

William Tincup: 12:08 Oh, I love that. Again, it’s getting it financed, not from the company or the employees it’s getting it financed from the retailers and people that want to put their gift cards and cards out, into a marketplace. This is a different delivery system for them. They don’t want to go direct. It’s too hard.

David Leeds: 12:32 And this is the… And I know it’s a little bit of an overused term, but this is the win-win-win, because the ultimate customer, the company that’s trying to achieve the business results is able to put all of their budget into achieving that. We’re able to build our business and our ability to support them, through that revenue. But then if you’re Nike or REI, or pick the brand that you want to talk about, they’re getting their gift card, in this example, out into the marketplace. And then people are going online, going into their stores and buying their products. And so, truly everyone in the value chain is winning.

William Tincup: 13:18 Yeah, it’s funny. A couple of years ago, I was going to an analyst event and they sent me a link. And it was a link to basically, a mini eCommerce portal. And I could pick whatever I wanted, but I could pick the things that I wanted. I was like, “Well, this is such a great idea, because I don’t have to get a box of stuff that I don’t want or will never use.” And I got rocks glasses, that was Seven Deadly Sins. And I’m like, “This is exactly what I would buy for myself. This is fantastic.” And I just thought the whole experience was fantastic.

David Leeds: 14:00 So first of all, you’re totally right. And we, as you might imagine, use rewards and incentives inside Tango Card quite a bit. And there have been a couple times where we’ve sent out basically, a choice product. We call it the , intern to our employees. And then we’ve asked them, “Hey, tell us your story about how you use that value.” And what’s amazing is, first of all, it’s just magic, but it’s just unpredictable. So one person used their gift card to go to REI and get a water filter so that they could go on this back country trip that they had wanted to, with this brand new, high end water filter that they just would not have purchased on their own. Someone else used it at Williams-Sonoma to get a really nice chef’s knife that they just would not have splurged on.

15:01 Someone else literally just went to the grocery store, because it allowed them to buy something extra special for their family. And so, you hear these stories and you’re just like, “Holy cow.” You just see why these reward incentives actually make such an impact when you hear these stories. And your comment is especially important, because it really is that choice. It’s the fact that the employee gets to choose which gift card they get, where they spend it. And that just maximizes the value for them.

William Tincup: 15:37 Yeah. Again, it’s not a cookie cutter, which is where I think historically, where we’ve gotten recognition wrong, is where we try to treat everybody the same. But if you’re giving somebody a $50 gift card, and then they can go do what they want to do at that particular moment, whatever that is. I think you just get more out of it. They get more out of it. You get more out of it as a company, giving back to revenue and retention related issues. You get more out of it too. Have your customers asked you about re-gifting or donating, in terms of when they give something to an employee and the employee says, “You know what, I’m good, but I’d like to give this to my cousin”, or whatever. Is that a thing?

David Leeds: 16:27 It is a thing. A really interesting question. So the re-gifting is a little bit less of an issue, just because people are actually quite good at-

William Tincup: 16:39 Oh, yeah. No, fair enough.

David Leeds: 16:43 But it does happen. Don’t get me wrong. That is absolutely a thing where, people will take the gift card that they have and they’ll send it on to someone else. What I would say is maybe, to the second half of your question is, one of the areas that we actually launched at the inception of the company was actually the ability, if you got, say $10 or $50, whatever, was to make a donation to a nonprofit rather than use it at a retailer. And what I will say is that, it is a relatively small percentage of our overall pie, if you will. But what’s way more interesting is that, when certain companies use it or offer it, there are certain cases where the usage is very high.

17:42 And so, I actually don’t know the number off the top of my head, but I think we’re approaching nine or $10 million of value that has been donated to the approximately 30 nonprofits that we work with, through our platform. And it just ends up being this really big deal for certain companies, for certain use cases. And we’ve had CEOs of even large financial institutions that have said, “Hey, we want Habitat for Humanity or Girls Who [inaudible 00:18:16] or something along those lines, to be some of the key redemption options so that our employees have access to that.” And so it really is interesting how big of an impact this has had.

William Tincup: 18:29 And no value judgment. If somebody needs to buy themselves a brand new silk tie fantastic. Again, it’s the beauty of something that’s highly personalized like this. If at that moment, that’s what they need. Cool. If at that moment, they just want to donate to a charity that they feel strongly about. Great. Again, to me, it strikes this chord of, you hit them at the moment where it’s important to them, and then they get to decide. The company’s not making a decision. They’re making that decision, which I think is wonderful. What’s your favorite part of the demo? When you show Tango Card to people for the first time, what’s your favorite part?

David Leeds: 19:18 That’s a great question. You touched on it earlier, but my favorite part of the demo is, when we send someone this product that I mentioned, called the Reward Link. And so, it’s exactly the experience you had. So someone receives a Reward Link via email, and it looks like a gift card and it has a link right under it. You click on that link and it basically launches a catalog. And so then, as the recipient, you can now choose, “Hey, do I take my value in the form of this gift card or that card gift card? Do I donate half of the value and then get an eCommerce type of a card?”

20:08 But it’s just that magical moment when someone just, actually sees the choices in front of them, because of course there’s the technology and there’s the business case and how do you help someone if they’re having trouble and all the things that you need to think about when you’re putting together a modern rewards program. But the coolest part of the demo is that, when you send someone the email that has $20 of value in it, they click on that and now they have the ability to choose. You can just see their eyes light up. And it’s just that magical moment where you just see the impact of what you’re spending. And you can just feel why you have these business results, because it changes how people feel.

William Tincup: 21:02 And it’s right there. It’s that moment that matters. It’s right there. And I love that. Questions that prospects should ask Tango Card. So what should they be asking you?

David Leeds: 21:17 Yeah, exactly. So internally, I call this the five plus one. So the five questions that any prospect really should be asking, and frankly, in this order. But the first is, we call it content, but it’s just what digital currencies, not just gift cards, but what kinds of gift cards do you have, and what is the catalog? And the reason that’s so important is, let’s say you have employees in the US, and in Canada, and in Europe. You really just want to make sure that you have a complete selection and offering for your entire universe. Because once you get these programs set up, you really want to let them run forever if you can, without interfering too much. So you really want to understand the content and the catalog first. The second is the technology, and this is just, how do I make sure that I can send a gift card?

22:25 Somebody’s going to receive it. It’s going to work, all that stuff. Am I using an API? Am I using a web interface? There are all kinds of ways of doing this. You just want to make sure that it works for your company. The third is support. And when I say support, do you have support for my engineers to get the program set up? Do you have support for my accountants to make sure that I can fund my account? I can provide funding in multiple currencies if that’s necessary. And then, how do you support my recipients? It’s rare that someone has a problem with a gift card, but it happens. And so, you really need to make sure that if there’s a problem, someone knows what to do about that. The fourth is the stuff that really people… It’s the not sexy stuff. It’s, talk to me about the scalability of your platform.

23:22 Talk to me about data privacy. Talk to me about accessibility. Talk to me about fraud detection. It’s all these things that you don’t think about when you’re going into a program, but especially with digital rewards and digital incentives, you’ve got money moving around the globe very quickly and you just want to make sure that it’s safe, it’s protected as much as it possibly can be. And then the last of course, is economics. And it goes back to my prior point, which is, make sure that up to 100% of your budget is specifically going to the rewards and the incentives, and not fees and so on and so forth. And then my plus one is referrals. Let me talk to one of your existing customers, because it helps to hear someone talk about the magic for their employees. So that’s the five plus one that, whether you’re working with Tango or one of our competitors, you should be… Sorry, or considering Tango or one of our competitors, you should be thinking about.

William Tincup: 24:29 That’s worth listening to the podcast alone, right there. Most recent favorite customer success story, without names, without brands and things like that.

David Leeds: 24:40 Yeah, for sure. I would say… I’m trying to do this without saying names, but I think I’ve been most excited about watching companies that are using rewards and incentives to really help their employees get set up in their home offices. And in some cases, just improve their home offices, because all of us, obviously, or most of us have been working from home long enough that we’ve got a place to work and so forth, but it’s not necessarily dialed in. And so, some people need a new desk. Some people need a new chair. Some people need a new monitor. Some people need a new mouse.

25:35 Some people need a new Bluetooth headset. Some people need a new… The list goes on. And so, it’s been really satisfying working with companies that are either, launching new programs to do that, or are evolving existing programs to really recognize the world that we live in today. So those are probably the most satisfying today, to see how companies are trying to engage and recognize, frankly, some of the pain that their employees are going through. And that we, Tango Card, are playing a role in making, not to be too grandiose, but making the world better through those types of actions.

William Tincup: 26:22 I love it. This has been fantastic. David, thank you so much for your time today.

David Leeds: 26:27 William, this is awesome. It’s great to talk to you again. I know it’s been a couple years since we’ve seen each other in person, but it was great to do this with you.

William Tincup: 26:34 Absolutely. And thanks for everyone listening to the Use Case Podcast, until next time.

Outro: 26:39 You’ve been listening to RecruitingDaily’s Use Case Podcast. Be sure to subscribe on your favorite platform and hit us up at recruitingdaily.com.