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#547: Leaders in Customer Loyalty: Brand Stories | Why DraftKings Looks Beyond the Betting Industry to Improve its Customer Experience · Leaders in Customer Loyalty, Powered by Loyalty360

• 0:02
  SPEAKER_01: Good afternoon, good morning, Mark Johnson from Mology360.
• 0:05
  SPEAKER_01: Hope you're doing well.
• 0:06
  SPEAKER_01: It's a Thursday.
• 0:08
  SPEAKER_01: Thank you for joining us for the Brand Stories edition of the Leaders in Customer Mology Podcast.
• 0:13
  SPEAKER_01: Today I am joined by Sean Hatley.
• 0:15
  SPEAKER_01: He's the Chief Customer Officer at DraftKings.
• 0:18
  SPEAKER_01: They are, as you know, one of the most recognized brands in sports entertainment.
• 0:22
  SPEAKER_01: Under Sean's leadership, DraftKings has focused on elevating the voice of the customer across the organization, leveraging customer data insights, AI, and innovation to create a more seamless and engaging set of experiences for millions of customers.
• 0:38
  SPEAKER_01: In today's discussion, we'll explore the evolution of customer loyalty within the gaming industry, how DraftKings is using customer feedback and AI to drive continuous improvement, through some transformation of the customer loyalty program, and the importance of organizational alignment to delivering exceptional customer experiences.
• 0:58
  SPEAKER_01: We'll also discuss how customer expectations are changing, what differentiates DraftKings in a highly competitive market, and where Sean sees the future of customer loyalty and customer experience heading.
• 1:10
  SPEAKER_01: Sean, thank you very much for taking the time to join us today.
• 1:13
  SPEAKER_01: Welcome to the Leaders in Customer Loyalty Podcast.
• 1:16
  SPEAKER_01: How are you doing?
• 1:17
  SPEAKER_00: I'm doing great.
• 1:18
  SPEAKER_00: Thanks, Mark, for having us.
• 1:19
  SPEAKER_00: Really excited to join you today to talk a little bit around DraftKings and our journey in the loyalty space.
• 1:23
  SPEAKER_01: Absolutely.
• 1:24
  SPEAKER_01: Looking forward to this conversation for sure.
• 1:26
  SPEAKER_01: So for those who may not know DraftKings, can you give us a brief introduction on what you guys do, how you do it, how are you founded?
• 1:33
  SPEAKER_00: Yeah, absolutely.
• 1:34
  SPEAKER_00: So, you know, DraftKings is a digital sports and gaming company.
• 1:38
  SPEAKER_00: We were founded back in Boston in 2012, feels like forever ago, but still, you know, it's been about 14 years, and we were founded by three of our founders, uh, two of which still remain at DraftKings, and our third is still involved as well.
• 1:52
  SPEAKER_00: So Jason, Paul, and Matt, just great leaders, great people.
• 1:56
  SPEAKER_00: You know, when the company first launched, it was really started as a daily fantasy sports.
• 2:00
  SPEAKER_00: You know, the they saw the need and really jumped in and started dominating that space, but we have grown so much over the last 14 years and have a much broader portfolio that includes sports betting, casino, lottery, prediction markets, and much more.
• 2:15
  SPEAKER_00: And you know, from a customer standpoint, it's our goal to continually find new and exciting ways to deliver that best experience ever that they can't get anywhere else.
• 2:24
  SPEAKER_00: And so that's DraftKings just at a very high level.
• 2:26
  SPEAKER_01: Absolutely.
• 2:27
  SPEAKER_01: So you talked a little bit uh about the transition.
• 2:29
  SPEAKER_01: You started off in fantasy sports in 2020, 12 and then kind of expanded.
• 2:34
  SPEAKER_01: What was the next product you uh uh kind of migrated into?
• 2:38
  SPEAKER_01: And you know, uh, how did you eventually start moving into the the gaming arena?
• 2:43
  SPEAKER_00: Yeah, so we started with Daily Fantasy.
• 2:45
  SPEAKER_00: Um, so you know, your fantasy football, fantasy baseball, all of those areas, and then really with the changing of the Supreme Court ruling of Paspa, where it legalized online gaming or basically allowed the states to be able to make the decision for whether you can have it or not.
• 3:01
  SPEAKER_00: Our next big product and really a massive pivot point for DraftKings is when that occurred and we launched into sports betting.
• 3:08
  SPEAKER_00: So our online sports betting markets.
• 3:10
  SPEAKER_00: So previously you would have to go to either Vegas or a casino or very limited options for to place sports bets.
• 3:18
  SPEAKER_00: And then with the repeal of that, we were able to launch in a number of geographies, and that was really the big unlock, I would say, for DraftKings.
• 3:26
  SPEAKER_00: And ever since then, we've just barely been listening to our customers and understanding what they want, what they need, and always trying to stay on the leading edge of that.
• 3:35
  SPEAKER_01: And sports vetting, uh, you know, we've did we've done some interviews with your team in the past and similar entities.
• 3:40
  SPEAKER_01: It's kind of a unique opportunity, right?
• 3:43
  SPEAKER_01: Uh it was legalized or Supreme Court uh and enabled it.
• 3:47
  SPEAKER_01: Then states have rights to and how they can kind of control it.
• 3:51
  SPEAKER_01: I think 30 or so states allow sports vetting in some some form or fashion now.
• 3:56
  SPEAKER_00: Yeah, yeah.
• 3:56
  SPEAKER_00: So it is a highly regulated industry.
• 3:59
  SPEAKER_00: Um so for sports betting itself, that also is for eye gaming, so online casinos, you know, much smaller expansion there.
• 4:08
  SPEAKER_00: There's only five or six geographies thus far for that, but that is a growing area as well.
• 4:13
  SPEAKER_00: But yeah, we um have the opportunity to work with every state.
• 4:17
  SPEAKER_00: Every state sets their regulations, sets their guidelines, and really partners with the operators in providing that best experience possible.
• 4:25
  SPEAKER_00: So yeah, we get the opportunity to work with lots of different government agencies, government bodies, and um they also work together and talk to each other as well to provide that great experience.
• 4:35
  SPEAKER_01: That makes perfect sense.
• 4:36
  SPEAKER_01: Have there been some states that uh have been maybe a little easier to work with, or are they all kind of kind of coalescing around kind of a standard approach?
• 4:45
  SPEAKER_00: Yeah, I would say, you know, every state is different in some of the areas, but their biggest thing is they really want to provide, just like we do, that great experience for their constituents, a sustainable experience, and just making sure that it's fun and safe, right?
• 5:00
  SPEAKER_00: That that's really where I would say the core of it is.
• 5:03
  SPEAKER_00: And then the other thing that uh that the regulators and the operators are all aligned on is we want to provide the best experience possible.
• 5:10
  SPEAKER_00: So not only from a responsible gaming perspective to make sure that everyone is playing within their means and having a sustainable experience, but that it's fun and it doesn't have a lot of like hiccups or bad experiences.
• 5:23
  SPEAKER_00: And so we obsess on that of how do we just make the best, most effortless experience possible for our customers so that they can really focus on what they're there to do, and that's to get some skin in the game, to have some action and to have a lot of fun and elevate the whether that's the eye gaming, the prediction experience, or the sports betting experience.
• 5:44
  SPEAKER_01: Okay.
• 5:45
  SPEAKER_01: When you look at your role, you know, what what do you do day to day uh as the chief customer officer?
• 5:50
  SPEAKER_01: You know, what what uh takes up your time?
• 5:52
  SPEAKER_00: Yeah, so you know, I would say it changes daily and many times it changes hourly.
• 5:58
  SPEAKER_00: Um, but the way you can kind of think about my role is, you know, we have anywhere from like 10 to 12 divisions that I have the opportunity to work with under my mandate.
• 6:07
  SPEAKER_00: But but really some of it is a couple things.
• 6:10
  SPEAKER_00: So at a high, high level, I'm really there to care and be the voice of the customer across all of the customer journeys.
• 6:17
  SPEAKER_00: So, how do we look at that and have a single executive, a single department that is looking at the combination across the customer journey?
• 6:25
  SPEAKER_00: So looking at all the different divisions, whether they're in sports betting or they want to make a deposit or they want to make a withdrawal or they want to go and buy a lottery ticket, whatever the case may be, I'm looking at that and trying to be the glue across all of those journeys and identify opportunities.
• 6:41
  SPEAKER_00: So that's probably like at my big, big level at DraftKings as the chief customer officer, what I focus on.
• 6:46
  SPEAKER_00: But then I also have the pleasure to run about a third of the company in terms of full-time employees.
• 6:52
  SPEAKER_00: So we have anything there you can think about it.
• 6:54
  SPEAKER_00: If you have a live two-way conversation with the customer, that's generally my organization.
• 7:00
  SPEAKER_00: So that might be our fraud department.
• 7:02
  SPEAKER_00: So, how do we protect our players from bad actors out there that might be, you know, be trying to defraud or steal information, just like a bank does, we're there to protect them and to look out for them to customer service.
• 7:16
  SPEAKER_00: You know, we hope that you don't have an issue when you're interacting with our products, but you know, the reality is sometimes you do.
• 7:21
  SPEAKER_00: And sometimes you have questions.
• 7:23
  SPEAKER_00: And so just like other customer service departments, people will reach out when they need help.
• 7:27
  SPEAKER_00: And so we're there to resolve it effortlessly and quickly for them.
• 7:32
  SPEAKER_00: And then a whole bunch of other things across there.
• 7:34
  SPEAKER_00: But, you know, I would say um those are my high-level responsibilities, but it does change uh hourly, really based upon what the customer needs.
• 7:43
  SPEAKER_01: Perfect.
• 7:44
  SPEAKER_01: You talked a little bit about some of the uh things that you're looking at: fraud, uh, customer experience, voice of the customer.
• 7:50
  SPEAKER_01: The role of a chief customer officer or chief marketing officer is changing pretty rapidly with AI and all kinds of disparate technology that you need to amalgamate kind of disparate data sources to create that unique engagement.
• 8:03
  SPEAKER_01: Uh, you know, what are some of the challenges, or maybe even phrase it, what's some of the opportunities you see in your role?
• 8:09
  SPEAKER_00: You know, one of the things that I really think about, that I really want to force myself to do, to lead by example, but really in part upon all of my teams and all of my peer organizations, is really think about the customer experience, not only from the lens of gain.
• 8:27
  unknown: Right?
• 8:28
  SPEAKER_00: So as we think about customers' expectations for products, for experiences, they are shaped by everything in their life, right?
• 8:35
  SPEAKER_00: Whether they're interacting with Apple, with Netflix, with Instacart as they order groceries or Uber Eats, or the list goes on and on and on.
• 8:43
  SPEAKER_00: And so customers' expectations for their experiences and how they like to be treated, whether that's personalization or how easy or not it is to complete a task, is being shaped by all industries.
• 8:58
  SPEAKER_00: And so, really, it could be all too easy to just focus on your industry and look myopically at that and say, well, how are we doing against Fandle?
• 9:05
  SPEAKER_00: How are we doing against Cauchi or, you know, fill in the blank?
• 9:09
  SPEAKER_00: Obviously that's critically important, but that's not enough.
• 9:13
  SPEAKER_00: And so, really, really, we need to look at where is customer experience evolving to?
• 9:18
  SPEAKER_00: What are those other things that we can learn from other great providers, whether that's loyalty programs or customer experience, like USAA?
• 9:26
  SPEAKER_00: You know, as a military veteran myself, I've been a member of USAA for a long, long time, and I really admire how they treat their customers and how they tailor that experience to military veterans, and they really understand their customer better than anyone.
• 9:40
  SPEAKER_00: Well, we can learn from that and we can understand like what is it that our players are, what if they want, and how do we talk to them in a certain way that really resonates with them.
• 9:49
  SPEAKER_00: And so that's what we're really focusing on now is looking across the world, across industries to identify what is best in class because it's no longer sufficient or okay to only be best in class in your industry.
• 10:04
  SPEAKER_01: That makes, yeah, and many brands are doing that.
• 10:06
  SPEAKER_01: That's one of the things that we try to provide and facilitate from a membership perspective.
• 10:10
  SPEAKER_01: We get brands together once a week, sometimes twice a week.
• 10:12
  SPEAKER_01: Brands lead sessions, but talking about what's working, what's not working, what challenges they have, uh, you know, and looking across industries, because I think you're it's a very salient point that being able to look across industries and understanding what others are doing well, and being able to beg, borrow, and steal a little bit from that can be quite advantageous, right?
• 10:29
  SPEAKER_01: It can help you expedite the you know, the rollout of new products and services that can be advantageous to the customer.
• 10:37
  SPEAKER_00: Yeah, it's it's so critical because things are changing so quick, where like new features or new capabilities can be commoditized very fast.
• 10:45
  SPEAKER_00: And so you have to always be looking out there and leaning ahead.
• 10:49
  SPEAKER_00: And I think that's another thing that sets DraftKings apart is not only are we very customer-centric and we listen and we're looking across industries, but we also try a lot of things.
• 10:59
  SPEAKER_00: You know, so we believe you're never gonna hit a home run unless you take a swing.
• 11:02
  SPEAKER_00: Um, and so we're always trying new things, but we also know that we're not gonna hit a home run every time, right?
• 11:07
  SPEAKER_00: Like so you use the sports analogy is you know, we might get up there, we might try a lot of things, they might not work, but that's the whole point is we're out there trying, we're innovating, and most of all, we're listening to our customers, and we never presume or think that we know exactly what they want.
• 11:24
  SPEAKER_00: And so that's why we really pull them into the process.
• 11:27
  SPEAKER_00: We integrate them into our thinking, we talk to them a ton so we can develop the best products for them because that's what we exist for to do.
• 11:35
  SPEAKER_01: So you've mentioned uh voice of the customer, listening to customers a couple times.
• 11:39
  SPEAKER_01: Uh that can be something that's uh also very arduous for brands to do, right?
• 11:43
  SPEAKER_01: It's kind of an audience task to make sure everyone uh you have all the data.
• 11:50
  SPEAKER_01: How are you listening to them?
• 11:51
  SPEAKER_01: Is it call center?
• 11:52
  SPEAKER_01: Is it uh returns?
• 11:54
  SPEAKER_01: You know, you know, there are a number of different data points out there that are you know very important in voice to the customer.
• 11:59
  SPEAKER_01: How are you doing that so effectively to not only listen to, understand, and process that, but use that to develop new products, services, offerings that resonate and drive engagement with your customer?
• 12:10
  SPEAKER_00: You know, one of the things I'll tell you a little bit of a story that when I joined DraftKings over five years ago, when we came in, we had a lot of, I would say, disparate, kind of broken experiences.
• 12:21
  SPEAKER_00: We had ramped, we had grown so fast, and we were always launching new capabilities that we didn't always carve out enough time to go back and improve the experiences that were maybe 80% right, right?
• 12:34
  SPEAKER_00: Because we were on to the next thing and then to the next thing and to the next thing.
• 12:37
  SPEAKER_00: And so what we had done is we had built up a good amount of experience debt, as I like to call it.
• 12:42
  SPEAKER_00: So kind of very analogous to tech debt, right?
• 12:45
  SPEAKER_00: Like where you build systems on top of systems on top of systems, but you don't necessarily go back to modernize or to clean it up.
• 12:52
  SPEAKER_00: We very much had a lot of experience debt.
• 12:55
  SPEAKER_00: And so we went in there and we, you know, took a very methodical approach.
• 12:58
  SPEAKER_00: One, we started thinking about how do I think through the customer's lens.
• 13:03
  SPEAKER_00: So even thinking about customer journeys like I make a deposit, I make a withdrawal, right?
• 13:09
  SPEAKER_00: Subtle word saying I, I, I, but really it got us to start to think differently and put ourselves in the shoes of our customers.
• 13:17
  SPEAKER_00: So that was one, mentally reframing and thinking like a customer.
• 13:21
  SPEAKER_00: And then two, to your point, it was collecting what could be insurmountable in some cases, like the infinite amount of data that's out there.
• 13:29
  SPEAKER_00: And so we really needed to modernize our systems, put lots of listening posts out there where we could collect those data points and then analyze them.
• 13:38
  SPEAKER_00: And so those data points today come in a lot of different forms.
• 13:41
  SPEAKER_00: One, it could be your clicks in the app, how you're moving around the app, you know, those infinite number of combinations that you're doing.
• 13:50
  SPEAKER_00: And so we're looking at that and we're saying, all right, well, how are customers navigating through this?
• 13:54
  SPEAKER_00: What are their behaviors, etc.?
• 13:56
  SPEAKER_00: So that's one example where we're improving our data infrastructure and always getting more and more granularity there.
• 14:03
  SPEAKER_00: And then the next is truly listening to our customers.
• 14:06
  SPEAKER_00: So whether that's our VIP hosting program and talking to our customers live on conversations, our customer service chats, our customer service tickets, all of that data where we receive millions and millions and millions of interactions, we're now able to consume it at a level and a rate that we never could before due to AI.
• 14:29
  SPEAKER_00: So this has been a real game changer for us.
• 14:32
  SPEAKER_00: Where, as you can imagine, when I first started five years ago, we would review CX tickets or customer service tickets manually.
• 14:40
  SPEAKER_00: You would have humans reading through them, maybe you do some word clouds, you know, but nothing too sophisticated.
• 14:46
  SPEAKER_00: And then we would have to try to synthesize it, come up with a category.
• 14:51
  SPEAKER_00: So it was a very laborious process.
• 14:53
  SPEAKER_00: And the reality is we were probably only looking at low single digit percents of the tickets.
• 15:01
  SPEAKER_00: There's just too many of them.
• 15:02
  SPEAKER_00: And we just, you know, it was it was insurmountable.
• 15:05
  SPEAKER_00: Well, now with AI and a lot of the tools that we have out there, we have systems that are literally monitoring and aggregating and providing insights, alerts, everything across all of our millions of tickets, all of our conversations, our text messaging, our emails, um, app reviews, social media, X, Twitter, all of those things.
• 15:28
  SPEAKER_00: We are refreshing that every two minutes.
• 15:30
  SPEAKER_00: Literally, every two minutes, we're getting a new pulse on what is happening.
• 15:35
  SPEAKER_00: So now we are truly looking at every ticket, every item, and we're able to compile that and generate some synthesis, which makes our actions that much faster to market than they have ever been before.
• 15:50
  SPEAKER_00: So it's been a huge unlock.
• 15:52
  SPEAKER_00: You know, as I talked, um, you know, I think it was last year in an investor day meeting that we had, our ticket rate has gone down over 50% over the last three years.
• 16:03
  SPEAKER_00: So we have cut out so much friction and suboptimal experiences so that our ticket rate is more than 50% lower than it was three years ago.
• 16:13
  SPEAKER_00: And it's just been amazing.
• 16:14
  SPEAKER_00: Yes, of course, it means less people that you need to handle those tickets, but more importantly, it's a great experience for our customers.
• 16:22
  SPEAKER_00: I view the best experience is the one where they never have an issue and they never have to reach out for help.
• 16:27
  SPEAKER_00: So still a lot of work to do there, but that's been a huge unlock for us on the AI front for sure.
• 16:32
  SPEAKER_01: Well, and it's interesting too, uh, oftentimes kind of tuning in AI can take a while as well, right?
• 16:37
  SPEAKER_01: To make sure the semantic and uh uh the the kind of the language is understood and kind of that process.
• 16:43
  SPEAKER_01: But also uh truly trusting AI to be that uh kind of the judge, right?
• 16:50
  SPEAKER_01: The arbiter of what things are and what they mean is uh many brands struggle with that, right?
• 16:55
  SPEAKER_01: Because they're concerned about uh is it actually doing what we say it's going to do, is it going rogue?
• 17:00
  SPEAKER_01: Is it you know how did you build a culture that enabled some of that uh not only trusting AI, but also enabling the fast pace of adoption, but also customization, I would assume, of the offerings to you know uh to your tailored needs?
• 17:17
  SPEAKER_00: Well, I I think it's uh through trial and error.
• 17:20
  SPEAKER_00: A lot of it is is you know, we believe big time in DraftKings at putting points on the board will build trust and credibility, etc.
• 17:28
  SPEAKER_00: So a lot of it with this new tool that I talked about that's AI enabled, to your point, people are like, does it really know?
• 17:35
  SPEAKER_00: Like, happen, I don't know, this feels kind of weird.
• 17:38
  SPEAKER_00: Is it summarizing?
• 17:39
  SPEAKER_00: There's no way it can be this accurate, you know, just common um misperceptions about AI, or in some cases reality.
• 17:46
  SPEAKER_00: And so for us, it was really around getting some wins, right?
• 17:50
  SPEAKER_00: So identifying certain categories, so not necessarily trying to eat the entire apple at once, all categories, all tickets, all customer issues, is we identified a couple that were much more granular, that everybody could agree on was an issue and had an opportunity, and we're able to show how our AI and tooling and process can drive meaningful results.
• 18:13
  SPEAKER_00: And so once we were able to get buy-in and people were like, wow, this is super impactful, and it saves me a ton of time.
• 18:22
  SPEAKER_00: And even if it's wrong or it's maybe slightly off, I'm learning that in a matter of hours.
• 18:30
  SPEAKER_00: Whereas before, under the old previous manner of humans reading it and bias and everything, we might not learn that for weeks, if not months at a time.
• 18:39
  SPEAKER_00: So it also helps our development cycle to learn.
• 18:42
  SPEAKER_00: Like we, you know, we want to fail fast so that we can learn and adapt.
• 18:47
  SPEAKER_00: And this is one of the things that that we've just kind of built in to say it's not going to be perfect.
• 18:52
  SPEAKER_00: You do have to double check it, but your flash-debaying process is so much shorter than it was before that it's still beneficial and you can get to an answer so much faster than you could before.
• 19:05
  SPEAKER_01: Absolutely.
• 19:06
  SPEAKER_01: When when you look at uh customer loyalty, what does customer loyalty mean to you and the team of DraftKings?
• 19:13
  SPEAKER_00: Yeah, you know, it's it's a great question.
• 19:15
  SPEAKER_00: Um, you know, as I think about it, you know, we we really feel that customers will continue to gravitate towards the best offerings at DraftKings.
• 19:23
  SPEAKER_00: And our top-rated apps and winning with our customers is so, so important.
• 19:27
  SPEAKER_00: You know, we really define that loyal customer as someone who engages with our brand for the long term, you know, really uses DraftKings as their go-to platform for whether that's daily fantasy, sports baiting, prediction markets, iGaming.
• 19:40
  SPEAKER_00: You know, the list goes on and on.
• 19:42
  SPEAKER_00: And, you know, we're gonna continue to add new products to continue to drive loyalty, very much akin to like an Amazon model, right?
• 19:50
  SPEAKER_00: Where they may have started with books on online and they really listen to their customers and have created this amazing ecosystem where it becomes a one-stop shop for that category.
• 20:00
  SPEAKER_00: And we want that same thing, right?
• 20:02
  SPEAKER_00: We really want to reward our customers for when they come and putting their business with us and making sure that if they have gaming needs or prediction needs or whatever the case may be, that they want to go nowhere else other than DraftKings.
• 20:14
  SPEAKER_01: That makes perfect sense.
• 20:15
  SPEAKER_01: I know you launched your first uh customer multi-program, Dynasty Rewards, uh, five or six years ago.
• 20:20
  SPEAKER_01: Uh you recently relaunched uh DraftKings Rewards to replace the old program.
• 20:26
  SPEAKER_01: You know, you know, what was some of the strategy you've talked about, voice of the customer, listening to, adapting?
• 20:31
  SPEAKER_01: Uh, you know, what is what are some things that you did differently in the program?
• 20:35
  SPEAKER_01: But you know, also how did you go about changing the program based on all that treasure trove of data you have uh within your organization?
• 20:41
  SPEAKER_00: Yeah, it's a great question.
• 20:43
  SPEAKER_00: You know, not one that we took lightly.
• 20:45
  SPEAKER_00: We had built a brand around Dynasty.
• 20:47
  SPEAKER_00: It was our baby, if you will, right?
• 20:49
  SPEAKER_00: We had started it, we were one of the first to have an online rewards program.
• 20:53
  SPEAKER_00: But we started over time to look at it and said, you know, the strategy really behind the relaunch was about putting our strongest brand at the center of the program.
• 21:02
  SPEAKER_00: And that brand is DraftKings.
• 21:04
  SPEAKER_00: And so we, you know, we spend a lot of time, effort, and money at building our brand nationwide.
• 21:10
  SPEAKER_00: And we kind of took a step back to say, well, why don't we just leverage that?
• 21:15
  SPEAKER_00: Why try to create a separate sub-brand when it's not necessary?
• 21:19
  SPEAKER_00: And two, we have all this amazing brand equity.
• 21:22
  SPEAKER_00: And then also candidly, when you would talk to customers, they would refer to it as DraftKings rewards, right?
• 21:29
  SPEAKER_00: They would just call it what it is.
• 21:30
  SPEAKER_00: And so we're very much a big believer in listening to the customer and keeping it simple.
• 21:35
  SPEAKER_00: And so that was one of the biggest areas that we rebranded.
• 21:39
  SPEAKER_00: Um, second was we wanted to reduce complexity in our program.
• 21:43
  SPEAKER_00: You know, our old program had a lot of different currencies.
• 21:46
  SPEAKER_00: It could be free bets, free spins, DK dollars, crowns, etc.
• 21:50
  SPEAKER_00: etc.
• 21:51
  SPEAKER_00: It was a lot of currencies, which at the time when we started, you know, everyone had a purpose and it was like, okay, this makes sense, a customer wants this.
• 22:00
  SPEAKER_00: They want that.
• 22:01
  SPEAKER_00: But over time, it was a perfect example of maybe some of that experience debt where we had gotten a little too complicated that it was leading to some confusion for our customers.
• 22:09
  SPEAKER_00: And so, in a similar way, that as I'm sure you're all too aware, you know, credit cards love a cash back program.
• 22:17
  SPEAKER_00: One, it's simple, it's straightforward, and everybody loves cash, right?
• 22:24
  SPEAKER_00: They don't have to try to figure out, well, how much is a point worth at Amex or at Capital One or fill in the blank?
• 22:31
  SPEAKER_00: You know, and so we thought about the same thing to say we had similar challenges where people were like, well, I don't understand what a crown is worth or a bet or whatever.
• 22:41
  SPEAKER_00: And so as a result, they were just get confused.
• 22:44
  SPEAKER_00: And so we weren't getting a lot of credit in some ways for all the value that we were providing to our customers.
• 22:51
  SPEAKER_00: And so this was really the crux behind this is we wanted to make it simpler.
• 22:56
  SPEAKER_00: We wanted to get brand equity out of it, and we wanted to make it straightforward for our customers.
• 23:02
  SPEAKER_00: And we've seen cashback programs do really well across different industries.
• 23:06
  SPEAKER_00: And the feedback from customers has been tremendous.
• 23:09
  SPEAKER_00: They love the simplicity of it, it's so straightforward.
• 23:12
  SPEAKER_00: And then we want to continue to build new and new capabilities of how they can use that currency to drive their experience.
• 23:19
  SPEAKER_01: So Crown Cash obviously is the currency that you're talking about, one simplified currency.
• 23:24
  SPEAKER_01: You know, what are you seeing so far from a measurement perspective?
• 23:26
  SPEAKER_01: Customers understanding, do they like it?
• 23:28
  SPEAKER_01: Is it, did it create the simplicity that you were looking for?
• 23:31
  SPEAKER_00: Very much so.
• 23:32
  SPEAKER_00: Yeah, it's it's straightforward.
• 23:34
  SPEAKER_00: That was kind of been the biggest thing for us, especially from our high value players, right?
• 23:39
  SPEAKER_00: You know, just like all loyalty programs, those who get more benefits and rewards are those that are more engaged, more involved with the program.
• 23:46
  SPEAKER_00: And that was their immediate feedback is they're like, I love this, I get it.
• 23:50
  SPEAKER_00: It's so simple, it's so straightforward.
• 23:53
  SPEAKER_00: And not only that, we didn't just change the currency, we also revamped the entire experience.
• 23:59
  SPEAKER_00: So all of our tabs are consistent now inside our app.
• 24:02
  SPEAKER_00: It's really easy to use your crown cash in when you're placing a bet or you want to do a spin or whatever the case may be, simple toggle of a button.
• 24:11
  SPEAKER_00: Whereas before it was confusing, customers wouldn't quite know how to use it.
• 24:16
  SPEAKER_00: And so, again, not only have we simplified the currency, we've made it more apparent, and we've made it so much more easy to use.
• 24:25
  SPEAKER_00: And right now, you know, while it's still early days, we just revamped this.
• 24:28
  SPEAKER_00: Um, we just finished our rollout about a week ago.
• 24:31
  SPEAKER_00: Um, but you know, feedback has been great.
• 24:34
  SPEAKER_00: And you know, one of the ways that we kind of measure and look at KPIs, you know, without going into specifics there, is simply are they using it?
• 24:42
  SPEAKER_00: Right?
• 24:43
  SPEAKER_00: Are they using the new features?
• 24:44
  SPEAKER_00: Are they trying the new currency?
• 24:46
  SPEAKER_00: Are they applying the new capabilities, whether it's boosts or not?
• 24:50
  SPEAKER_00: And they absolutely are.
• 24:52
  SPEAKER_00: That, and then we talk to those, those, um, especially the vocal customers that are real partners of ours who will tell us the good, the bad, and the ugly.
• 25:01
  SPEAKER_00: Yep, and they love it.
• 25:02
  SPEAKER_00: So so far, so good, but you know, you know, time will tell.
• 25:06
  SPEAKER_00: Obviously, we're gonna keep listening, and the the model that we have right now will not be the final model, we'll always be iterating whatever our customers need.
• 25:15
  SPEAKER_01: One of the things that you've you've kind of talked on is that the loyalty program or kind of the belief in customer loyalty, customer experience, you look across industries, you're very focused on listening to and understanding your customers.
• 25:26
  SPEAKER_01: It's almost like a fulcrum, right?
• 25:28
  SPEAKER_01: And brands that use customer loyalty, customer experience is the fulcrum to drive most or all product uh you know experiences are the ones that do very well.
• 25:39
  SPEAKER_01: You know, but organization alignment is very important for brands, right?
• 25:42
  SPEAKER_01: So, how how important is customer experience, customer loyalty within your organization?
• 25:47
  SPEAKER_01: It sounds like it's it's a fulcrum that can be that driver, but many brands struggle with it, right?
• 25:52
  SPEAKER_01: They view it as a discount.
• 25:53
  SPEAKER_01: Ah, we don't give that away, right?
• 25:54
  SPEAKER_01: One of the things you said is that you know, we'll see if they use it, right?
• 25:58
  SPEAKER_01: If they're using uh the customer experience, the products, you know, if they're using the different currencies, that means it's usually a very successful program.
• 26:06
  SPEAKER_01: And there's organization, there is an organization behind it that's driving that.
• 26:11
  SPEAKER_00: Yeah, you know, the big thing is is uh, you know, I would say uh a couple of things.
• 26:15
  SPEAKER_00: So customer experience at DraftKings is central to our core.
• 26:20
  SPEAKER_00: Uh, you know, I I can't speak for all of the other gaming operators, but I believe I may be one of the only, if not the only, chief customer officer among our peer organizations.
• 26:31
  SPEAKER_00: Now, it's not to say that they don't take it serious or or not.
• 26:35
  SPEAKER_00: Of course they do, and they're they're great competitors, but we view it as so important that we created this position uh a little over three years ago.
• 26:44
  SPEAKER_00: I was the first um one to hold it, uh, started at DraftKings a couple years before and moved into the chief customer officer about three years ago.
• 26:53
  SPEAKER_00: And it is so critical.
• 26:54
  SPEAKER_00: And I think the thing that makes it different here compared to other industries or other places is it's not only an advisor type job that's working through my peers and trying to influence is I also own PL.
• 27:09
  SPEAKER_00: I drive a majority of a lot of our profits and responsibilities there, a lot of the experience.
• 27:16
  SPEAKER_00: And so it's a combination of both advisor and strategic, but then also having for you know, kind of use one of our modto like skin in the game, where I also own large operations.
• 27:27
  SPEAKER_00: And so I don't get to just talk about it, I have to actually role model it and do it as well.
• 27:35
  SPEAKER_00: And I think that's a big differentiator that can really help because it's hey, I'm not just saying we all need to do this.
• 27:42
  SPEAKER_00: I'm gonna show you.
• 27:42
  SPEAKER_00: I'm gonna lead from the front, I'm gonna lead by example, and I have the same challenges and goals that my other peers do.
• 27:49
  SPEAKER_00: And so that's been a big differentiator at DraftKings and what I believe the success of this position at driving a consistent, customer-centric culture across the company.
• 28:02
  SPEAKER_01: You talked about it earlier, uh, the online sports betting uh arena only has a few kind of larger players, been some consolidation there as well.
• 28:10
  SPEAKER_01: Uh, but now you have some adjacent competitors in kind of the prediction markets.
• 28:15
  SPEAKER_01: You know, how do you stand out about your, you know, among the competitors and is is competition a good thing?
• 28:21
  SPEAKER_00: Yeah, so uh at the end of the day, I love competition, right?
• 28:25
  SPEAKER_00: I think it makes you better if you don't have competition, then it's just all too easy to get complacent.
• 28:31
  SPEAKER_00: I think that's true of whether you see it in sports or business or just in life in general, right?
• 28:36
  SPEAKER_00: Like you want to be pushed, you want to be challenged.
• 28:38
  SPEAKER_00: So I love competition.
• 28:40
  SPEAKER_00: It was one of the main reasons why I came to DraftKings.
• 28:43
  SPEAKER_00: You know, when I was looking at my career and I came from um financial services and insurance, is I wanted to be part of an industry and a company that truly wanted to be number one, right?
• 28:55
  SPEAKER_00: And had a real shot at it.
• 28:57
  SPEAKER_00: And, you know, so DraftKings is generally speaking number one or two in most of the geographies that we're in.
• 29:04
  SPEAKER_00: And so we very much have a competitive spirit here.
• 29:07
  SPEAKER_00: We don't just want to win, we want to dominate.
• 29:10
  SPEAKER_00: We want to crush our competition.
• 29:12
  SPEAKER_00: We respect all of our competitors immensely.
• 29:15
  SPEAKER_00: We take none of them lightly, but we love competition.
• 29:18
  SPEAKER_00: And so the space has really evolved.
• 29:20
  SPEAKER_00: I would say, you know, we're watching it play out over the US over the last year or so with prediction markets.
• 29:27
  SPEAKER_00: And you know, we but you know, we'll see where the future goes with that and and where the states and the federal government land on it.
• 29:33
  SPEAKER_00: But in the meantime, we are investing heavily in that.
• 29:37
  SPEAKER_00: We are leaning into it, and we believe we have a right to win here.
• 29:41
  SPEAKER_00: Because for sport event contracts, it's sports at the end of the day, and nobody knows the sports customer better than we do, right?
• 29:50
  SPEAKER_00: We've shown that across our sports betting and iGaming products, that we really understand our customers.
• 29:56
  SPEAKER_00: And we believe that while CalShi may have a lead on us right now in those other states, we are catching up rapidly.
• 30:03
  SPEAKER_00: And we believe that this is our market to win because we know the sports customer, and we're gonna lean into that.
• 30:10
  SPEAKER_00: We have the best sports offering as indicated by lots of external agencies of our apps and experiences.
• 30:16
  SPEAKER_00: And so we believe that um we don't take Calci lightly, but we are leaning in heavily here and believe that we will win.
• 30:23
  SPEAKER_01: Lawmakers in Washington have raised concerns about customer loyalty programs in your industry, potentially leading some people to develop gambling addictions.
• 30:32
  SPEAKER_01: Uh, you know and I know that your industry is highly regulated and you are acutely focused on responsible gaming.
• 30:38
  SPEAKER_01: But when you step back, uh, to what extent is the current legal and regulatory environment impacting your customer loyalty efforts?
• 30:46
  SPEAKER_00: Yeah, you know, our success really depends on sustained relationships with customers who bet within their means, as we talked about.
• 30:53
  SPEAKER_00: You know, we want it to be for fun and really view betting as entertainment.
• 30:57
  SPEAKER_00: You know, I believe there's a misconception around our industry's loyalty programs.
• 31:01
  SPEAKER_00: You know, DraftKings has designed our rewards program to be responsible, to be customer-centric, which is very much in line with numerous consumer-focused industries, you know, across the world.
• 31:12
  SPEAKER_00: Our focus is really about recognizing and rewarding loyal customers in ways that enhance their enjoyment.
• 31:18
  SPEAKER_00: You know, the program is structured to reward our customers for their loyalty, not whether they win or lose.
• 31:24
  SPEAKER_00: You know, we strive to create a fun and responsible experience by fully committing to responsible engagement practices.
• 31:30
  SPEAKER_00: And all of our employees, all of them, every single one, our management, our frontline employees, our customer service employees, you name it, they undergo responsible engagement training and are trained to flag concerns to our player protection team.
• 31:45
  SPEAKER_01: Perfect.
• 31:46
  SPEAKER_01: Um, yeah, it's a very interesting arena right now.
• 31:49
  SPEAKER_01: We actually have a group of attorneys who give talks to our audience space every two months around different facets of gaming, privacy.
• 31:57
  SPEAKER_01: So it's it's it's something that's uh it's pretty enthralling just to hear what's going on and get a perspective.
• 32:02
  SPEAKER_01: But keeping up with it and keeping ahead of it, obviously, in a highly regulated industry like yours is very important.
• 32:07
  SPEAKER_01: And sounds like you guys are doing a great job in that regard.
• 32:09
  SPEAKER_00: Yeah, 100%.
• 32:10
  SPEAKER_00: Mark.
• 32:10
  SPEAKER_00: And I would say the only thing I would add there is it's also important.
• 32:12
  SPEAKER_00: I'd be remiss if I didn't mention is that partnership with our regulators.
• 32:16
  SPEAKER_01: Yep.
• 32:16
  SPEAKER_00: And is we really want to partner with them.
• 32:19
  SPEAKER_00: Our interests are aligned.
• 32:21
  SPEAKER_00: We want our players, they want their constituents to have an amazing, sustainable experience.
• 32:26
  SPEAKER_00: So that's also another critical part is is really partnering with them and working together so that we can all be successful and have our industry thrive.
• 32:35
  SPEAKER_01: Excellent.
• 32:36
  SPEAKER_01: Doing a great job, customer experience, customer loyalty.
• 32:38
  SPEAKER_01: What's next for DraftKings?
• 32:39
  SPEAKER_01: What are you guys up to?
• 32:40
  SPEAKER_01: What can we uh kind of expect to see from you guys coming out soon?
• 32:44
  SPEAKER_00: Yeah, you know, the big thing for us is you may have heard us talk about the Super App.
• 32:48
  SPEAKER_00: And, you know, we are now live in all 50 states.
• 32:50
  SPEAKER_00: And so we want that experience to be seamless and amazing for all of our customers, no matter where you're at.
• 32:57
  SPEAKER_00: So if you're in, say, Indiana and you're placing a bet on a sports game, and then all of a sudden you hop on a plane and you fly to California, we want you to be able to open that exact same app and be able to meet whatever needs that you have, right?
• 33:11
  SPEAKER_00: So we want it to be seamless for our customers.
• 33:13
  SPEAKER_00: We want them to acknowledge it, to jump into it, and just make that play for everything they want, no matter where they're at.
• 33:21
  SPEAKER_00: And so that's really where we're investing right now.
• 33:23
  SPEAKER_00: And that's why our loyalty program and the relaunch is so critical.
• 33:26
  SPEAKER_00: You know, we have it across most of our verticals right now with DiraftKings Rewards.
• 33:30
  SPEAKER_00: And stay tuned, we do have a loyalty program that will be expanded to our predictions markets here, hopefully, by the end of the year.
• 33:37
  SPEAKER_01: Perfect.
• 33:38
  SPEAKER_01: Uh, and last question, a little bit self-serving.
• 33:40
  SPEAKER_01: You know, what can Loyalty 360 do to help you and your team and your customer experience, customer loyalty efforts?
• 33:46
  SPEAKER_00: Yeah, Mark, it's it's having conversations like this.
• 33:48
  SPEAKER_00: You know, we really, really appreciate you having me on and letting us talk about DraftKings and where we're going.
• 33:55
  SPEAKER_00: It's such an exciting time in our industry.
• 33:58
  SPEAKER_00: But more importantly, I really believe that customer loyalty is such a critical topic, no matter what industry you're in, because we all know consumers, especially US-based consumers, have tons of choices.
• 34:11
  SPEAKER_00: Everybody is fighting for that consumer.
• 34:13
  SPEAKER_00: And one of the best ways you can do it is to have an amazing loyalty program where you understand, you listen to your customers.
• 34:20
  SPEAKER_00: So learning from your other, you know, research and podcasts.
• 34:24
  SPEAKER_00: You know, I myself am a student of a lot of your content.
• 34:27
  SPEAKER_00: Um, and then just having us on like this is great.
• 34:30
  SPEAKER_01: Sean, thank you very much for taking the time to join us today.
• 34:32
  SPEAKER_01: It was great getting to know you, uh, a little bit about your role, what you're seeing in regard to customer experience, customer loyalty, how you're keeping the Draft Kings Rewards program front and center.
• 34:43
  SPEAKER_01: And uh and it's great to hear your passion for the program, passion and focus.
• 34:48
  SPEAKER_01: Uh, it was it was a very solid interview.
• 34:50
  SPEAKER_01: So thank you very much for taking the time to join us today.
• 34:52
  SPEAKER_00: Great.
• 34:52
  SPEAKER_01: Thanks so much, Mark.
• 34:53
  SPEAKER_01: I wish you all the best.
• 34:54
  SPEAKER_01: And also wanted to thank everyone else for taking the time to tune in and be sure to check back every Thursday for a new episode of the Leaders in Customer Loyalty, the Brand Stories podcast.
• 35:03
  SPEAKER_01: Don't forget to subscribe and follow us on YouTube and across our social media channels listed in the comments section below.
• 35:09
  SPEAKER_01: Until then, have a wonderful day.
• 35:11
  SPEAKER_01: Uh we'll see you next Thursday.
• 35:13
  SPEAKER_01: Thank you very much.