Raise launched in 2013 to change the way the gift card marketplace worked, with a goal to help others give themselves a raise. Raise CEO Jay Klauminzer stepped into the company in October 2018 to lead the change, increase partnerships with retailers, and help customers give themselves a raise. Ladders spoke with Klauminzer to find out his view on the future of retail, using frontline employees to affect real product change, and how his experience at Groupon set him up for success at his current company.
How does Raise stand out against industry competition?
“Raise is the easiest way for consumers to buy discounted gift cards and get cash back for their everyday purchases while helping retailers drive traffic in-store. It’s easy to use — just download the app and sign up to get all of your gift cards stored directly on your phone, and it even notifies you when you’re near a store you have a gift card for.
At Raise, we have partnerships with more than 500 retailers (CVS, Hotels.com, Chipotle, Subway, Macy’s, Domino’s, Airbnb, 1-800-Flowers and Fanatics) and have gift cards from over 4,000 brands on the marketplace side — which means more savings for shoppers at the stores they care about. We have 2.5 million members and they have saved $150 million to date.”
Do you have a vision for how mobile payments will play into the future of Raise?
“Gift cards aren’t simply for gifting anymore. Gift cards have traditionally been pieces of plastic you give to a loved one when you don’t know what to get them. Raise has transformed that experience so that shoppers can also purchase gift cards for their own use, saving money or earning cash back along the way. It’s similar to being able to load multiple offers directly on your credit card. But with Raise, you have access to savings from hundreds of retailers, accessed directly from your mobile phone.
Additionally, much as we’ve seen in the online food ordering space, only a handful of brands will be able to get customers to download their own branded mobile wallets. Consumers are looking for convenience and a single place to shop. So a unified wallet that allows one-tap access to many brands will be where consumers migrate.”
What would you say is the biggest industry trend to watch right now?
“The retail apocalypse is heating up and major legacy retailers are on death watch. In recent months, we’ve read about Dress Barn, Diesel, Charlotte Russe and Gymboree all filing for bankruptcy, struggling to stay afloat. In an age where Amazon is increasing its market foothold for everyday purchases, retailers need to find ways to integrate with innovative technology to attract and retain new customers, so they don’t become the next victim of retail shutdowns.
The changing face of loyalty is a big trend in retail, too, particularly as it relates to mobile payments. Raise’s in-house technology offers our partner brands unprecedented insights into shopping behavior, both online and offline — which helps support them prevent being another victim of the retail apocalypse. By helping retailers build brand loyalty through rewards, we’re enabling them to easily track performance across channels. Similar to what Starbucks is doing with its mobile payments and loyalty reward program through its app, Raise is helping brands drive foot traffic by integrating technology that’s already in place. We’re really inspired to see the recent growth in popularity of mobile payments, like the fact that Alipay has more than a billion global users, and we think that trend will continue.
Furthermore, retailer loyalty is currently mostly limited to branded credit card rewards. Since consumers don’t carry an infinite number of credit cards, the market is limited. However, Raise allows shoppers to shop wherever they want to, without having to worry about carrying around a million cards.
It also serves as a complementary tool for retailers with ‘frequent shopper’ offerings, as customers can ‘deal stack’ by using their gift cards while also applying frequent shopper loyalty points for maximum savings. For example, consumers who are participating in Chipotle’s new loyalty program can maximize their savings by buying through Raise’s instant cash-back rewards program. Now, consumers have a single, convenient place to spend and are rewarded without installing a myriad of apps. Gone are the days when people had to scour the internet for savings or clip coupons at home for their favorite brands.”
Is there an onboarding process for CEOs? What’s it like?
“I’d love to say there’s something formal in place, but the reality is that a CEO is put into place and expected to lead from day one. In the beginning, I over-indexed on spending time with every employee and some of our top merchants and customers to formalize my own onboarding plan.
At Raise, we have a very supportive board that gave me tons of guidance and areas to focus on to start. We are also lucky to have our founder still playing an active role, so he showed me the ropes and made sure I was laser-focused on the biggest opportunity areas. Beyond that, I made a point to meet with all of my direct reports in the first couple of days. Then, I had lunches in groups to meet every employee and just listen to their thoughts — both optimistic as well as areas we should really focus on. I have always thought that the frontline employees — those talking with our customers and our merchants — have the best ideas. So those lunches combined with help from our board of directors and our founder laid out my first 90-day plan. Once we got into it, reviewed all the data, talked with our merchants, and listened to our employees, we built out our top five company objectives and then cascaded the key results to every person in the company. That really became my onboarding plan and the living breathing plan that we execute against.”
Since joining the company, has Raise tried a project that failed? What did you learn from that experience?
“I’ve learned that the highest performing companies are ones that aren’t afraid to be bold and make mistakes. This holds true for both multinational companies I’ve worked for, as well as startups working on scaling. I joke often that I used to think 80/20 (the idea that you should make a decision after gathering 80% of the information about it) was the golden rule for making decisions quickly. In a startup that’s trying to change the industry, we have to be comfortable with 60% or 70% of an answer with 10% of the work. That way, you move quickly and get the most decisions right. For the mistakes you do make, you can quickly pivot if the data doesn’t prove out. Even if you make a few more mistakes, you end up getting so much more done at a much quicker pace.
From past experience, I’ve found that it’s super important to A/B test everything, even if it’s just for a few days. We’re constantly testing and iterating to optimize the experience for both our consumers and retailers.”
How would you describe your management style at Raise? Does it change when dealing with employees from different generations?
“I’m a firm believer in bottom-up leadership. The right answer most often sits with the people who interact with customers and merchants on a daily basis. I usually try to give guidance and get out of the way. It’s good to have a perspective but it’s also important that I give others a voice before injecting my opinion too early.
I strive to create a culture where employees can share their insights without holding back. Early in my career, I definitely tended to micromanage more than I should have. However, I’ve learned along the way that giving people space not only develops employees faster but they often come up with better answers after being given the flexibility to think deeper with that given autonomy.
Lastly, it’s crucial to be very clear on company level objectives (OKRs) and make sure that they cascade down to every employee. Employees should know how their daily jobs impact the greater objectives of the company.
As for different generations, I think there’s a lot to be said here. However, I believe the actual execution of styles across generations is overstated and sometimes misunderstood. There are very basic needs for any human, such as wanting to feel secure in your job, seeing a path towards always getting better (I strive for improving by 1% every day), and feeling connected to something bigger (in our case, it’s changing the shape of mobile payments and loyalty). Different generations may need different language and respond to different methods of development but I find that if you anchor on those core needs and personalize your management style to the individual (versus the generation), you can manage any employee, whether they are millennials or Gen X or Baby Boomers.”
What’s special about the work culture at Raise?
“We’re building a culture where every employee, from the C-Suite down to entry-level employees, has a seat at the table. I learned in my consulting days that people really do have an obligation to dissent. If something doesn’t look, feel or smell right, employees have an obligation to stand up and yell. Some of our most influential product features have come from frontline member service agents standing up and fighting for their customers. If you create a culture where everyone can feel safe and act like an owner, you’ll get the best ideas much faster than you would from living in the ‘ivory tower’ of a top executive.”
What’s the biggest career risk you’ve ever taken? Did it pay off?
“I had spent nearly my entire professional career (10 years at the time) in consulting. It was great to work and I loved solving new problems with new clients every few months but I had a longing to actually implement and execute the work, instead of just consulting on it. I got a call from the then-COO at Groupon, which I had only just recently heard of when they launched in my hometown. I saw it as a chance to join a well-funded startup and actually learn how to run a business. I told her, ‘Give me the toughest problem you have; I want to learn how to run a business,’ and she said, ‘Great, here’s California — you own the P&L.’ The next 6+ years gave me a chance to travel the world, meet a ton of amazing people, and really refine what ownership and P&L management meant. My consulting friends questioned me making the jump, and I questioned myself whether I should really leave a great career path and good money to take a bet on a startup and myself, but it really paid off. I would not be CEO at Raise without my Groupon experience.”
Have you made any changes to Raise since becoming CEO in October 2018?
“We have a new feature on Raise called Exact Pay, where users can enter the exact amount they’d like to spend on a gift card and earn cash back. For example, when you’re waiting in the checkout line or about to make a purchase online, you can buy a gift card for the exact amount you need on your phone right on the spot, instantly earning cash back for your next purchase. Our goal is to continue to obsess over the checkout and payment process to make it easier for our users to transact while saving money.”
What piece of interview advice would you give to a young professional?
“First, realize that you’re also interviewing the company. When thinking of changing jobs, it’s an inherently big risk and you should make sure the culture matches your style — for example, Raise’s “obligation to dissent” culture isn’t for everyone. Second, really focus on being crisp with your communications. When interviewees start to ramble, the interviewer can lose focus and sometimes really good messages can get lost. Set up your responses with a simple structure, such as, “One time I did that was x — I learned y and did that by testing 1, 2, and 3.” Then use that structure as you give more details. It’s definitely okay to ask for and spend a few seconds structuring what you want to stay. Third, always prepare a list of questions and tailor them for each interviewer. When an interviewer asks, “Do you have any questions for me?” that is not just a formality, it’s another evaluative discussion. I’ve done countless interviews with candidates that were otherwise good but ended on a down note with, “No, I don’t have any questions.” This is your chance to show you’ve thought critically about the company’s business model, their culture, and how you will contribute from your very first day. This part of the interview is often my favorite because the dialogue that comes out of it really demonstrates if the candidate has a growth mindset.”