How Props is Redefining Loyalty Programs with AI and Open Banking
In the bustling world of customer engagement and loyalty programs, innovation guides businesses towards a brighter, more personalised future. We had the honour of sitting down with Tuomas Kohila, the co-founder and CEO of Props, a trailblazer reshaping the reward and loyalty experiences landscape. With a background in engineering and entrepreneurial ventures, Tuomas brings a unique perspective to the table as he shares insight into the journey of Props and the future of customer rewards programs.
TL;DR
We interviewed Tuomas Kohila, CEO of Props who underscores the necessity for personalized customer engagement in an otherwise stagnant market. He places significant emphasis on the paramount importance of consumer privacy and the strategic alliance with Enable Banking, emphasizing trust and reliability. Peering into the future, Tuomas envisions Props ascending as an international market leader, propelled by AI and open banking.
Tell us a little bit about yourself
I’m Tuomas Kohila, the co-founder and CEO of Props. I have a background in engineering and a track record of multiple startup ventures, some might even call me a serial entrepreneur. Over time, I've honed my skills in building, scaling, and ultimately selling companies, drawing from diverse experiences along the way.
What is the mission and vision of Props?
The main mission we're on is to bring light into the very static world of rewards and customer engagement. In the customer loyalty and rewards industry, it often feels like customers are treated uniformly, with only very basic personalization. We wanted to develop a product in the space that allows people to be met as individuals. I dreamed of a product that offers a personal touch.
Open banking and technology allowed us to start building a data-driven product that can be customized, personalized, and fun to use. So, we can start to challenge bigger programs and ultimately benefit not only consumers but also companies.
Our vision is, of course, that we want to grow quite large. We don't see any reason why not to. Technology-wise, we can quite easily function on the European scale. We envision becoming the dominant player in the global North in the rewards and loyalty field.
How has the journey been so far?
The journey has been very interesting. I always joke that we are working in the shadows. It isn't like industries, such as shipbuilding, where you work with physical materials that you can touch and see, the processes in this field aren't as tangible. For instance, when building a ship, you can easily understand the outcome by assembling physical pieces. However, in the rewards and loyalty programs space you're mostly dealing with beliefs, the components and outcomes are more conceptual and less tangible.
Marketing our product involves crafting compelling stories that engage both consumers and companies. Helping people to see how things could be. So, in the same way, our challenge is to write our story in such a way that it compels and also engages not only consumers but companies. And that's not easy, but it's been very interesting. The learning curve has been very steep, so we have learned a lot. As an engineer, I find it a very intriguing market to be working with.
How is Props different from other solutions?
I usually split rewards and loyalty programs into two different groups. Most of us consumers recognize standard engagement with loyalty programs. This kind of offer is something that is released by a certain brand, for example, an airline. In this context, our biggest differentiator is the fact that we're market-wide. The biggest advantage of this is that as a consumer, you're no longer bound to having several loyalty cards or several apps creating weird logistical nightmares.
When it comes to the players who are not tied to a specific field or brand, we have some differentiators that I find very interesting and very compelling. The first one is that on the consumer side, or let's say the kind of earning side, is that we turn payment cards into loyalty cards or identification methods. So we're not bound to a single specific payment card or single specific loyalty card or something like that. We can be a player that collects and rewards customers for every purchase you make or for any data point whatsoever. So not only can we reward you for buying something from different places unrelated to each other, but we can reward you for walking a certain number of steps or running or gym visits or whatever, as long as it is measurable.
Secondly, typical reward programs are very narrow when it comes to the reward side and that is also where we differentiate because we reward customers from multiple different sources and we increase them every week. So, it can be known brands like Stadium or any kind of retailer, we can reward you with their kind of reward points so that you can use them in those locations or those targets.
The third one, which is more ambiguous and intangible, is that we're building a platform which is gamifying, and electrifying, making loyalty schemes more fun to use. Turning loyalty and rewards programs into something that you like to do. That's why, for example, we are currently seeing more than 20 per cent of our user base visit our service every day, which is a world-class number at the moment. Very, very few loyalty programs get that kind of number. So I think we're succeeding in that field quite well, but those are the areas where we feel that we're differentiating and kind of recreating the market at the moment.
How do you ensure your customers' privacy?
First and foremost, safeguarding our customers' privacy is paramount to us. We wholeheartedly support the global movement advocating for consumer data ownership. As a company, we firmly stand on the side of consumers in data matters. We neither share, distribute, nor sell our customers' data. Our business model does not hinge on data sales.
Furthermore, we employ robust security measures to ensure the utmost protection of customer data. Our encryption protocols are top-tier, and all data handling processes are automated, minimizing human involvement. We strictly segregate consumer identities from their data, with all information housed behind VPN walls. These stringent technological safeguards, coupled with rigorous internal processes, guarantee that no individual, including myself, has access to personal data without due justification and procedural adherence.
How did your partnership with Enable Banking come about?
Our journey towards partnership with Enable Banking was deliberate and insightful. Initially, while collaborating with terminal and payment providers, we encountered limitations, particularly in Scandinavia's seemingly straightforward market, dominated by a handful of strong players. However, as we sought to deliver on our market promise, we realized these traditional avenues were insufficient, especially when expanding internationally, where dynamics drastically shifted.
Enter open banking—a paradigm shift catalyzed by EU legislation. This regulatory framework democratizes financial data access, liberating us from dependence on single entities like card companies or payment service providers. It offered us a pathway to leverage an open platform, mitigating risks of market dominance and fostering a more equitable landscape.
Our decision-making process involved rigorous evaluation, considering various factors and potential partners. Ultimately, we found Enable Banking to align perfectly with our vision. Opting for open banking over traditional card payment infrastructure felt not only right but strategic, empowering us to navigate the evolving financial ecosystem with confidence and resilience.
What is the best thing about working with Enable Banking?
Trust is paramount—it's the cornerstone of any successful partnership. Our journey with Enable Banking underscores this fundamental principle. From the outset, we set high standards for trust, ensuring that every interaction and evaluation aligned with our rigorous criteria.
Trust is built at every stage of a partnership, and of course, the sales process gives you a strong idea of what kind of company you're dealing with. Throughout our due diligence process, Enable Banking consistently surpassed our expectations, demonstrating unwavering integrity and reliability. Their responsiveness, transparency, and commitment to addressing our inquiries reinforced our confidence in their capabilities. It became evident that Enable Banking checked all the critical boxes, deciding to partner with them effortlessly.
Where do you see Props in the next 5 years?
As an entrepreneur, I've learned to navigate the future with cautious optimism. While predicting outcomes can be unpredictable, I firmly believe in our boundless potential for growth. I see no limits for us to grow first through Scandinavia and then Europe and possibly in the U.S. as well. With strategic partnerships and scalable initiatives, we can start rapidly expanding.
In five years, I envision Props as a renowned global leader in our industry. Our commitment to innovation and customer-centric solutions will propel us to new heights, solidifying our position as a pioneer in the international market or rewards and loyalty.
Considering how fast technology is evolving, what is the future of consumer rewards?
These tech trends and developments are natural; they're part of business. The mix of AI and Open Banking is exciting for our product development. It gives us a lot of options to choose from, but the challenge is figuring out what's most important. The great thing is, that we're starting to see real-life examples of how these technologies can benefit rewards and loyalty programs.
In this evolving market, we're serving both businesses and regular customers, so we need both sides to be ready to use new technology. Introducing Open Banking data has been a game changer for us as we're progressively unlocking the full potential of Open Banking in the field. Using Open Banking data in our rewards programs will enrich customers' interactions with products and brands. So, it's natural that AI and Open Banking are going to be the key parts of this business in the coming years.
What advice would you give customers who want the best possible rewards?
Overall, in this realm, consumers should know that with Props, it's effortless to discover ways to gain more value as a customer. Our goal is to make this process nearly automatic and seamless, ensuring that interacting with companies or retailers results in a more rewarding experience. Digitalization has significantly impacted this space, yet many businesses have yet to realize its full potential. As consumers, we should expect and encourage businesses to adopt this forward-thinking approach to rewards. By staying vigilant, consumers can uncover not only good deals but also highly engaging and enjoyable experiences.
What advice would you give to a company eager to implement a compelling rewards program?
It's truly eye-opening when you consider the current landscape of loyalty programs. Many of them seem fixated on acquiring customer emails, reminiscent of a bygone era where the primary focus was bombarding customers with emails about daily deals. We all know how that goes - some people avoid them like the plague, while others simply don't care.
While generic email marketing might yield decent results, loyalty and customer retention entail far more than just flooding inboxes. To truly excel in this arena, companies must delve deep into customer data to craft loyalty programs that resonate on a personal level. This requires stepping into the shoes of consumers, understanding their needs, and designing programs that feel tailored, cost-effective, and enjoyable to use.
At the heart of it all lies data. By leveraging customer data effectively, companies can build loyalty programs that deliver the results they desire. So, my advice is simple: dive into the data, get to know your customers inside out, and then tailor your programs accordingly. With this approach, you can create programs that not only meet but exceed your expectations.
Would you like to say anything else about your partnership with Enable Banking?
I'd like to say a huge thanks to Enable Banking. Our partnership has been incredibly valuable, especially due to your consistent availability whenever we need support. Through our due diligence and strategic collaboration, Enable Banking has truly proven to be a five-star partner in the realm of open banking. To anyone seeking a banking partner in this space, I highly recommend considering Enable Banking. Your dedication and attention to our needs have not gone unnoticed, and we are grateful for your ongoing support. Thank you for working alongside us and for your unwavering commitment.