New, disruptive technologies make customers’ lives easier. Keeping the customer at their core, these products either change the way people think about a problem, or improve the efficiency of their day-to-day tasks. This ethos is baked into the missions of some of the most thoughtful, effective companies on the planet, and it’s often what propels top brands into superstardom.
As these companies grow over time, there’s often a trade-off between doing what is best for the customer and doing what delivers the fastest business growth. It’s a trade-off I’ve seen throughout my career, and one that is often rationalized by the idea that faster business growth ultimately benefits those customers in the long term. The expression “a rising tide lifts all boats” comes to mind.
But what I’ve found at Upside is that the only way to achieve long-term growth for the business and the customer is to prioritize what’s best for the customer, even if it means making short-term sacrifices.
The Upside co-founders started our business with a powerful mission to advance the economic power of people and businesses in the real world. We do that by making brick-and-mortar transactions more economically efficient, measurably increasing incremental profit for merchants and purchasing power for consumers. And we’ve designed our platform so that this mission is ingrained in every facet of our business.
Unfortunately, there is a long line of products in the market that promises results for brick-and-mortar businesses, but end up:
We knew we had to do it differently. So, we decided to put these merchant pain points at the center of our business decisions and only make moves that advance our core mission.
It seems lofty to say you should lean on your mission and put the customer first. We have a number of tangible examples of difficult lessons learned, and what it means to prioritize our customers over our bottom-line growth:
We work to make our impact worth the effort. And if we are going to advance the merchants’ economic power, we can’t reasonably use revenue increases as an indicator of success. So, we measure the incremental profit earned on every transaction through our platform. It’s a higher threshold to clear, but it’s the only way to ensure that merchants can see the value.
With every transaction, we take the unprecedented responsibility to make sure we prove that we’ve changed the customer’s behavior and that we’ve done it profitably. If we don’t, we eat the cost of the consumer promotion and write checks to cover those gaps for merchants. In fact, in a given month, we usually refund up to 17% of our revenue back to merchants.
There are few, exceptional instances when a retailer doesn’t need us to capture all available demand for their product or service because they’re already doing it themselves. If that’s the case, then we can’t help them and we don’t partner with them. Otherwise, we would needlessly discount their product, which would go against our long-term merchant- and customer-first mission.
Sometimes, we make mistakes that are qualitative, not quantitative. For example, we’ve seen instances where Upside blasts past merchants’ profit and cost projections in such a way that it shakes up internal stakeholders. With our commitment to guaranteed profit, bigger bills are better — but we know businesses adhere to budgets, and those bigger bills are alarming for stakeholders that aren’t familiar with our model.
That disconnect is on us. We didn’t talk to the right internal stakeholders to ensure alignment and set everyone up for success. While we work to right that wrong, we either dial back the transactions we drive to those businesses (i.e., their incremental profit) or we continue to drive consumer transactions but pay for the promotion costs ourselves.
Objectively, this approach is not in our economic interest (or theirs, quantitatively!). We are forgoing profit share and/or taking on promotion costs. Even so, we know this is critical for our long-term relationships with our merchants and, ultimately, the value we provide customers who use Upside to earn cash back from those merchant locations.
Investing time and resources into upholding your mission pays dividends over the long term. Failing to make these difficult decisions sets you up for long-term pain. It’s your own organization that will bear the brunt of prioritizing growth over customers.
The account management team will fight uphill battles, and a failure to truly understand market feedback will push the product, engineering teams, and marketing teams in the wrong direction. Ultimately, customers will only feel more frustrated and churn. By going to these lengths, we’ve achieved a near 90% merchant retention rate at Upside, and we work to improve that number every day.
Leading with our mission and putting customers first, we can be successful while we focus on empowering each phase of a merchant’s business — and each of their customer’s wallets.