05/11/2021 – Science & Technology / Hospitality / Loyalty / App / Rewards / Embargo
THE LOYALTY LINK: Embargo’s CRM platform for Hospitality highlights the vital post-pandemic link between loyalty and tech
Founded in 2017, Embargo is a loyalty and rewards app and platform for the hospitality industry, helping venues to stay in touch with regular customers and ensure they return, whilst enabling a seamless experience for users looking for rewards at their favourite businesses. In this Q&A session, Co-founders Tsewang Wangkang and Frederick Szydlowski discuss the role of loyalty and technology in the hospitality sector’s post-pandemic recovery.
1) What do you feel is the cause for the current disconnect between customers and the hospitality businesses that serve them?
Tsewang Wangkang (TW): “Customers are the lifeblood of every hospitality business. For years, many hospitality businesses have relied on outdated methods of loyalty schemes to make customers return – from inconvenient stamp cards (which can easily be lost) to relying on front-of-house staff to recognise regulars. As such, they have found it difficult to effectively track the behaviour of loyal customers, or to recognise their loyalty with tailored rewards. This has fuelled a great disconnect, as customers perhaps feel that every hospitality business is interchangeable.”
Frederick Szydlowski (FS): “Of course, Covid has only exacerbated this disconnect between customers and hospitality businesses – cafés, bars and restaurants were forced to close completely for prolonged periods. And even when they were allowed to reopen, they had no way to communicate with their key regulars to get them back on the first day. Many of those businesses sadly had to rely on fewer customers around – with fewer tourists, many people moving out or staying at home. The only way to keep their revenues on a good level was to make that relatively small group of guests return more often. However, having had paper cards in place or fully relying on staff that often would have changed didn’t allow them to do anything about those issues. Those customers that did return often felt their experience was hindered, as they would not be recognised a regular anymore. Thus, they have been less likely to return to that establishment.”
2) What impact has the pandemic had on this dynamic, and are there any other challenges that may have exacerbated the task of cultivating customer loyalty in recent years?
(TW): “As Frederick pointed out, the pandemic has had an undeniable impact on this dynamic. With people unable to visit their favourite cafés, restaurants and bars – as well as huge staff turnover – they were unable to rebuild relationships with members of staff or establish themselves as regulars (e.g., if there were limits to the number of customers allowed in a venue at one time, or there was general wariness about having prolonged interactions). Such circumstances will inevitably hinder the customer experience, as it will be nearly impossible to build relationships.”
(FS): “With a limited number of customers visiting the venue, businesses were forced to limit their menus and offerings to ensure that they were not wasting food or money – this meant that some customers may have been left dissatisfied with what was on offer, further hindering their experience.
“Covid will have forced cafés, restaurants and coffee shops to switch their attention from long-term strategies to safeguarding their immediate survival – although I must say many did realise that investing in customer loyalty can solve both short-term and long-term issues. However, still more businesses must realise that if they want to thrive in the new normal.”
3) Please tell me a little about Embargo, in terms of the motivations for setting up the business?
(TW): “The foundation of our enterprise was, in fact, that growing disconnect between hospitality businesses and their customers that we discussed earlier. Every customer-centred industry is highly dependent on their regular customer base and should do everything in their power to make them return. While my background was in investment banking and top-level leadership, I approached hospitality from the consumer side, wanting to combine my enthusiasm for the sector with my experience of how enterprises operate at the very highest level. I could tell there was a need for smarter solutions in the loyalty space, and with the right partner I knew I could do something about it – that’s where Frederick came in.”
(FS): “Myself, I came up through the hospitality sector, having worked as Head of Marketing for two of London’s leading venues before founding Embargo. When I met Tsewang, I knew he could offer more than just his experience – he saw loyalty through the eyes of the consumer. We agreed right away that there was a real, growing disconnect between hospitality businesses and their customers, and that the solution needed to be smart, to be tech-based – but above all, built with an in-depth understanding of the hospitality sector – starting from what it is that owners want, how to implement it fast so that the floor staff don't get discouraged, and how to handle the whole customer journey in an environment as busy and hectic as a coffee shop or restaurant during their rush hours. We knew the problem and why many others failed in providing a successful loyalty platform. That’s when we left our jobs and focused 100 per cent on making Embargo happen. When we beta-launched Embargo in mid-2017, we knew that we were perfectly positioned to create solutions that businesses can integrate quickly and seamlessly.”
4) To the uninitiated, could you describe the role of a CRM (customer relationship management) platform, and outline what Embargo’s CRM system does?
(FS): “Absolutely. Say you were a hospitality entrepreneur, and you wanted to manage your regular customer base better. You need a CRM platform that effectively identifies your regular customers, and that can engage with them through different communication channels to not only engage but reward them. Our CRM platform, The Portal, is a system that allows you to understand your regular customer base, and communicate with them, but on a much more personal, relevant level – exactly how a loyal customer should be treated. After all, they generate the majority of your revenues, so you need to know how many regulars you have, who they are, if they stop returning, and you also need to be able to reward them. This data is incredibly valuable to businesses, as retaining regular customers is cheaper than trying to attract new ones.”
(TW): “The other side of our offering is the app, which customers use as their wallet for their paperless loyalty cards, allowing them to collect digital stamps at their favourite businesses – you keep all your cards in one place and use them contact-free. The app also ensures venues can actively engage with their customers as there is an intuitive customer-facing product. The relationship between customers and businesses is a two-way street, so an effective loyalty platform needs to operate the same way: the app feeds the portal with the data, info and analytics businesses need, and the portal provides info and rewards for customers.”
5) What are the consumer incentives for using Embargo’s The Portal app?
(FS): “Consumers like to have their favoured establishments recognise their repeat custom and reward it with tailored rewards. The analogue for this was the old loyalty card: get a stamp with each coffee – and after seven stamps, your eighth coffee is free. But how often would you have left your wallet, or forgotten to get stamped or – worse still – lost the card? Embargo puts all your favourite participating businesses into one intuitive app, and offers you rewards tailored to your purchasing habits, giving you an unparalleled customer experience.”
(TW): “Loyalty should be rewarded in every way the customer interacts with the business. Therefore, we started covering online orders such as pick-up and delivery too – so if retailers add online ordering through Embargo, consumers can complete their orders through the loyalty app, further streamlining their experience and ensuring they get rewarded in whichever way they interact. Creating a great customer experience is all about getting the little things right, and having a CRM platform like Embargo makes this easier than ever.”
6) What are the benefits for bars and restaurants in adopting/integrating the platform into their operations?
(FS): “Firstly, Embargo’s CRM platform is incredibly easy to install – it’s a plug-and-play platform, so businesses needn’t dedicate days on end to installing and studying the new software. Businesses are granted access to an online platform, which allows them to easily create their own loyalty scheme, access customer analytics, and drive more repeat business – all on a plug-and-play basis. The CRM platform, called The Portal, becomes our customers’ main tool to identify and communicate with their customers.
“Crucially, hospitality businesses that use Embargo have access to powerful tools that don't require any tech knowhow or lengthy implementations from the venues. With a two-minute setup, they can have a digital loyalty scheme and access to key analytics. For the first time, businesses can actually understand who their regular customers are, how many customers they rely on to drive most of their business, and finally communicate with them and reward them seamlessly.”
(TW): “What’s more, businesses are able to communicate with their regular customers, by sharing any new offers or reminders that they are only ‘one point away’ from receiving a reward. Such prompts will be crucial for many businesses’ customer engagement.”
6) Looking ahead, what’s next for Embargo in terms of growth strategy and investments?
(TW): “Embargo has just enjoyed a very strong funding round, raising a total of US$1.1 million (£830,000), which we are so proud of. We received a great deal of financial support from multiple sectors, including hospitality, real estate and even sports. We’ve had significant investment from some prominent figures as well, including Nick Telson of DesignMyNight, Faraz Nagree of Lean Kitchen Networks, the restaurateur Loui Blake, and the founders of Hex Digital.”
(FS): “It’s clear that such cross-sector support is promising when it comes to future growth. Embargo already operates nationally in the UK and Poland, but also has a presence in countries like Qatar, Saudi Arabia, Portugal and Serbia. We are already planning to scale up our international operations over the coming months – and given the momentum we already have, we feel very confident about the future.”
7) What are your predictions for the hospitality sector’s future prospects and market environment?
(FS): “There are so many considerations for the future of the hospitality sector that it’s hard to know where to start! Take, for example, health & safety: hygiene has always been important for venues, but in the wake of the pandemic customers expect regular deep-cleaning, increased access to hand sanitiser, one-way systems, contactless interactions and much more from their favourite locations. Not only are hospitality businesses going to have to be cleaner in the future, but these expectations are also likely to speed up the adoption of a cashless future.”
(TW): “No doubt, there are big changes already underway in the sector. To ensure they will not only survive but thrive, hospitality businesses need to consider the bigger picture – this is no time for complacency. They need to review and update their businesses strategies and consider more cost-effective, smart solutions to address changing trends within the industry.”
(FS): “This is where tech-based solutions can really help the hospitality sector. However, it is key to keep them simple and quick to launch. As we said in the beginning, all hospitality businesses have to act promptly; they don't have the time to implement complex solutions for months, only to then have to try to explain them to their customers. Beyond that, on the end-customer side, the tool has to be extremely intuitive – or else the adoption won't be big enough to deliver value for the venue owners and management. Each tool has to be built with an understanding of how the hospitality sector operates.”
(TW): “The same goes for customer communication. A generic marketing email from a business will likely be ignored, but a tailored message will be eye-catching and make them feel valued. Again, only better data analytics will make this possible. It will be challenging, but harnessing smart, tech-based solutions will certainly help the sector to cope with the new normal.”
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