This was an exciting opportunity for Todd and the KangoGift team since companies are beginning to use KangoGift's new employee recognition tool and peer recognition is one of the biggest trends.
You can listen to the podcast or read through the transcript enclosed below.
Transparency Revolution with Phil Bowermaster
Guest: Todd Horton, Co-Founder, KangoGift
PHIL: You’re listening to Transparency Revolution Audio Edition. I’m Phil Bowermaster, and I’m pleased to welcome you to Program #28 in our ongoing exploration of issues related to societal, organizational, and personal transparency.
Today, we’re going to take a look at the little things that can make a big difference. As we continue to witness a convergence of social media, mobile communications, and a barrage of messages that our customers, our partners, and our own people are subject to every minute, we face the ongoing question of, “How do we get through?” What can we do to express appreciation, stimulate interest, or motivate behavior? Well, welcome to the Age of The Microgift!
Here to discuss micro-gifting with us is Todd Horton. Todd is the cofounder and CEO of KangoGift, which is an up-and-coming player in this emerging market space. Todd comes to KangoGift having held a variety of roles at Monster Worldwide. He was the marketing director for JobKorea in Seoul, Korea, which is part of the monster.com family, and helped Monster enter Turkey, Russia, Mexico, and Brazil.
Before that, Todd was one of the earliest employees of salary.com, which went public in 2007. Products Todd has brought to market have won many accolades and awards from leading consumer and trade press. He holds a BA degree from Boston College and an MBA from Yale.
Todd Horton, welcome to the Transparency Revolution.
TODD: Thank you very much. I’m very happy to be here.
PHIL: Well, we’re delighted to have you and eager to get into this subject of microgifts. Let’s start out with a little bit of background on microgifts. What is it exactly? What is a microgift?
TODD: Yeah. I think if you look back, gift-giving certainly isn’t new. You know, the Romans, for the New Year, would give each other sweets or even barks, to celebrate prosperity in the coming New Year. So, the idea of giving somebody a small thoughtful gift is not new.
The interesting thing is if you flash-forward to around 2004, we can find that in Korea, where gift-giving, as you may know, is a really regular cultural norm among personal and professional connections, they did something really unique with technology, where people would be able to send these microgifts for everyday occasions, if it’s a thank-you gift, a small recognition or a [last-minute] thing, right to somebody’s phone.
And in Korea, where it’s common to give a gift upon meeting somebody or for small occasions, in 2004, they really brought this concept to market. Today in Korea, it’s a multi-hundred-million-dollar market. Almost everybody uses the technology on a regular basis, and it really facilitated the ability to take time out on a busy day and give this microgift.
Then in 2006, we saw Northern Europe really embrace micro-gifting, and they looked at it more from the technological end, where everybody is busy and they’re looking for ways to just make life a little bit easier, and the ability to just recognize somebody with a gift that’s sent to somebody’s phone started to take off.
Over the past two years, you see micro-gifting take off in countries, like China – not as much in Japan, interestingly – but definitely in Western Europe and increasingly in Asia as well.
PHIL: That is interesting, because they love doing stuff on their smartphones in Japan. They love accessing the internet there. But it’s interesting that it’s taken off all over the world. Well, tell us how you come into the story? How did you become interested in micro-gifting, and how did that KangoGift come to be?
TODD: As you mentioned on the top, I was living in Korea from 2007 through 2009. And, you know, I don’t know if you can tell by the tone of my voice, but I tend to be a bit of a soft-guy. When we meet people in Korea, they literally – five minutes after meeting people, I would get messages on my phone, you know, “Todd, thanks for meeting. Thanks for taking the time. Here’s a latte at Starbucks.”
And so, it was in Korea and my experience over there where I got really turned on to how technology can be used to just really create kind of a deeper connection with somebody. And in Korea, the concept of micro-gifting tends to be premium, so, as you know, it’s much more fun to send you, let’s say, a latte from a Hyatt coffee chain, let’s say, compared to me giving you $2.50.
So, taking that kind of nugget, I brought it back to the US. Unfortunately, for Monster (I hope), I quit, put a team together and launched KangoGift at the end of 2009, but with a tweak. You know, for us, what we’re really trying to do is just make it easy for people to celebrate everyday occasions and the small wins. The main difference compared to some of the international markets is that we’re SMS-based, and really where we can work with local businesses, because if I know—at least let’s say in the Boston area—that you love the chocolate molten cake from Finale, and if we’re friends or colleagues, you don’t need to just, you know,.. let you experience that means a lot.
PHIL: It’s interesting that you mentioned that. If you had a meeting with somebody and then afterwards that person sent you, you know, you get an envelope from him in the mail, and you opened it up and there’s $2.50 in there, it would just be weird. That would just be like, “What the heck is that all about?” That wouldn’t feel right at all.
There’s a certain charm to getting a gift, and there are certain things that seems to work really well for this micro-gifting means of providing a gift. You mentioned food items, a milkshake, a latte. What other kinds of things become microgifts
TODD: Yeah, you’re exactly right. You know, food, generally, has been the most universal gift, because it’s safe, and it tends to be really fun because you have to go someplace and pick it up and enjoy it. What we’ve seen is a range of things, so services, or movie tickets. If I happen to know that you’re a huge Harry Potter fan, I can send you two tickets for Friday show to your phone. It’s just a nice way to kind of tell you that, you know, “I know what you like.” We also see services on the beauty line, so if it’s massage or spa services. It’s a little bit up there in the [price] points, to be honest …
PHIL: Yeah, that becomes more of macro-gift…
TODD: It kind of does. But it’s something where, broadly speaking, you know, food is where we start and then it kind of branches into more media, like movies, and then it finishes off on higher-end services and things like that.
PHIL: So, let’s talk a little bit about what role microgifts can play in – let’s start for businesses, for marketing initiatives, and then just for individuals, as a consumer app. What future do you see for micro-gifting in both of those areas?
TODD: Yes. I mean, clearly, I’m very bullish on the idea. But, you know, I think there are three broad ways that we’re seeing, as more and more businesses and consumers embrace this. The first broad trend is all around this notion of convenience and personalization. Everybody has received a plastic gift card, but [we see] this plastic gift card going digital.
What mobile and microgift allows is the ability to really personalize the gift, and where technology is inherently impersonal, you know, the ability to have a nice message, maybe have some nice images on it, really makes it much more personal. And if you don’t charge consumers fees, we see that the convenience factor is really high, so for the last-minute gift [giver] or things like that.
The second big application is [brand] loyalty. So increasingly, we’re seeing, as you know, the major brands doing everything they can to retain their customers. The ability to send a recognition or just a small reward from your business to a customer is a huge area that we’re seeing a lot of attention by many of these companies that we read about everyday participating in.
And then the third one, you know, is a little bit more general—and I don’t think they come out on my field—but really what we’re seeing is the concept of the greeting card being disrupted. You know, if you take a bit more of a broad approach to it, really what the microgift allows is not just the ability to send a real item but to really tailor that experience for all these different occasions. So, it’s tied in to this personal relation, but I think we see this kind of resurgence of how can we reinvent the greeting card.
PHIL: Right. And do you see that on the consumer side, it becomes a substitute for greeting cards, or like a new incarnation of the greeting card?
TODD: I think so, and that’s where I see it. So, you know, we’re seeing these big brands using microgifts to attract and retain customers. On the consumer side, I think it’s a bit more of a story around that personalization kind of substituting for the greeting card, or if you miss somebody who lives long distance away, to just really show that you care.
PHIL: Yeah, I love the idea. One of the things I love about the idea of the microgift is the spontaneity of that.
And the phone as the interface for interacting with other people is just this amazing technology anyway. Every time I walk into a Starbucks, I always remember that back on my desk or someplace in a box, I’ve got like four or five Starbucks card that I picked up at some trade show or something like that. People are always handing you these things. I never put them in my wallet or carry them with me. If people were giving me this on my phone, I’d be like, “Ah, hey, I’ve got that on my phone,” and I’m ready to use it. So, that’s a nice difference there.
But just the spontaneity of that, you know. It’s like, “Hey, I appreciate this person in my life. I think I’ll send him a little something,” right. You’ve got the phone in hand and you’re ready to go.
TODD: I think so, yeah. Just to [bill] on that very quickly, you know, I think what micro-gifting really allows for is not just the spontaneity but the ability to celebrate these everyday occasions, so not just the birthdays or “I miss you” or the anniversary, but really the everyday things. So, that’s where we’re seeing we’re really trying to leverage technology where it’s just an opportunity to connect with someone on a more on-going basis.
PHIL: Well, with that ‘everyday’ in mind or maybe with more planned-out things in mind. Let’s talk finally about the role that microgifts can play inside an organization. What’s the relationship between micro-gifting potentially and performance management or other internal initiatives?
TODD: Yeah, there’s a lot of interesting things going on the HR side of micro-gifting. We know every year companies spend up to $12B on incentives and rewards. What we’re seeing is that it’s not just the rise of mobile but, more importantly, the rise of information flow being much more instant, and the rise of the social enterprise. There are companies out there that allow employees to share what’s going on.
What we’re finding is that micro-gifting is serving as an enhancement to the formal recognition programs that companies use. So, the ability to offer, you know, managers or employees an informal and instant way to really celebrate small wins and they’ll share ‘attaboys’ or ‘attagirls’ with somebody is the biggest opportunity that we’re seeing, when it comes to companies adopting or adapting these microgifts.
PHIL: Let me ask you something: How impactful or how motivating can a cupcake (which is one of the examples given there on the KangoGift site) or a latte be? These are just microgifts, after all. Are organizations really looking to drive employee behavior through these kinds of gifts?
TODD: You know, interestingly, they are, for a few reasons: Because really, at the end of the day, it’s the thought that counts. The micro-gifting, over time, can drive specific outcomes to what a company thinks an employee can be and help the employee live up to his or her full potential. So, just to elaborate a little bit more, what we’re seeing is, for companies to empower employees to recognize their peers with these instant, informal rewards and then sharing that recognition on social media, not only celebrates the recipient, but it helps the company put themselves in the light of as an employer of choice. So, over time, by rewarding that ongoing behavior, the employees do become more engaged.
I’m happy to give a few quick examples: We work with one high-tech high-growth company here in Boston that is really trying to retain that small company ‘feel’ as it grows bigger. Using the microgifts, what they’re able to learn is why, who, and when folks are being recognized in the enterprise. And so, they had an example of a sales rep who was not meeting quota, who was [on the brink], but actually, by looking at all of the data around micro-gifting, they’re able to recognize that actually that salesperson is assisting some of the biggest deals that the company has ever closed. So, taking a look at the data and why people are being recognized is what’s helping drive the engagement and the recognition
PHIL: It’s really interesting that an example would come from sales, because we think of that as being an area where all the incentives are already built in. But I love the concept; I love the idea that it really is the thought that counts and that companies can show that there’s some thought there, not just by giving the gift but also by putting that recognition into social media and other structures that show that it’s a well-thought-out thing.
Well, Todd, that’s going to do it, in terms of the amount of time we have. Thanks so much for being with us, and the best of luck to you and to KangoGift.
TODD: Thank you very much.
PHIL: All right. Well, that’s going to do it for this edition of the Transparency Revolution. Thank you all for joining us. We value your comments. Please leave them at transparencyrevolution.com. We’ll be back next week with another exploration of issues related to societal, organizational, and personal transparency. Hope you’ll be able to join us. And until next time, live to see it.