Transcript: Episode 225: Chocolate-Covered Laundry
LISTEN TO THE EPISODE:
APPLE PODCASTS | SPOTIFY | TOPFLOOR.COM
[00:00:00] Susan Barry: This is Top Floor episode 225. You can find the show notes at topfloorpodcast.com/episode/225.
[00:00:14] Narrator: Welcome to Top Floor with Susan Barry. This weekly podcast ride up to the top floor features tangible tips and excellent stories from the experts and characters who elevate hospitality. And now your host and elevator operator, Susan Barry.
[00:00:32] Susan Barry: Welcome to the show. Kipp Lassetter began his career as an emergency physician, then built and sold multiple healthcare technology companies. Along the way, he owned the Historic Peery Hotel in Salt Lake City, and because why not, turned a North Scottsdale gas station into the thumb, a destination barbecue spot featured twice on Diners, Drive-Ins, and Dives. Now, Kipp is the founder of RBN, a luxury real estate referral platform that turns home purchases and sales into what he calls guilt-free points, redeemable across a broad travel and lifestyle ecosystem. Today we are going to talk about real estate and loyalty, but before we jump in, we need to answer the call button.
Call button rings…
The emergency call button is our hotline for hospitality professionals and basically anyone with burning questions. If you would like to submit a question, you can call or text me at (850) 404-9630. Today's question was submitted by Caroline. Obviously, this is a perfect question for you, Kipp. What are the downsides to being featured on shows like Diners, Drive-Ins and Dives? Are there any downsides? What do you think?
[00:02:00] Kipp Lassetter: Are there downsides? Well, I think it changes your personal branding of some of your peers that worked with you as a healthcare IT exec and they're thinking that Kipp must have hit hard times. He's now doing barbecue at a gas station.
[00:02:17] Susan Barry: Got it, got it, got it. So maybe a little status challenge for you. Do you think that happens to everyone, though?
[00:02:24] Kipp Lassetter: The downgrade, it actually was a lot of fun and definitely to be a nationally televised chef from an emergency room physician to a healthcare IT exec, what's quite a transition?
[00:02:42] Susan Barry: What's your specialty? What's your best barbecue that you make?
[00:02:46] Kipp Lassetter: Well, I think most barbecue aficionados will tell you that brisket is the toughest to master and I think we do an exceptional job.
[00:02:58] Susan Barry: Interesting. Most aficionados from Texas and West, those of us from different areas of the country might feel a little differently. For example, pulled pork, very delicious and very important.
[00:03:13] Kipp Lassetter: Have wonderful pulled pork, and to be honest with you, early in my life, my parents grew up in Memphis and a big pulled pork capital, and had a big influence on what I think barbecue is.
[00:03:31] Susan Barry: Agree.
[00:03:32] Kipp Lassetter: We started pulled pork and we master brisket to the satisfaction of most of the Texans that come visit us.
[00:03:43] Susan Barry: Excellent. Well, you have been a physician, a tech CEO, a hotelier and a restaurant owner. What connects all of those chapters?
[00:03:56] Kipp Lassetter: Well, my wife wonders what connects on. Honestly, I think it's just the desire. I'm obsessed with creativity and challenges, and you combine the two together, then you can get some strange endeavors that happen. And one of them was, obviously, we're talking about the barbecue place, but I originally bought that for my son-in-law and it was a gas station with roller dogs and cheese nachos and you know the regular convenience store. And none of the big gas station operators bought it 'cause it was in a bad area. Not bad, it's a great area, a bad location for a gas station. So we decided after we bought it that we had to turn it into a destination. I said, “Well, that's a fun challenge.” And I think that thread of challenge to build something and whether it's building a home, which I enjoy doing, or building a business, or building a restaurant. Those are things I tend to respond to.
[00:05:09] Susan Barry: So, as someone who has sold multiple companies, how do you decide what to hold versus what to sell when a business starts to throw off real cash? Is it something where you wanna make it profitable and then get out? Or do you wanna ride the wave? Or is it a little of both?
[00:05:30] Kipp Lassetter: Good question. And I think I look at it is how much of my time is the business gonna take in more of a maintenance slow growth mode? Because when you're building it, it's rapidly growing, it's exciting. A lot of things are going on. Decisions are really important. But then, once it becomes an established business, then it's how much effort does it take to maintain it? And am I the right person to stay and maintain it? And I think all of that comes into personal decisions, whether I wanna stay involved or not. And in terms of whether you wanna sell the business or not, I think our focus and all the companies that I've been involved with was building a lot of value. If you build value, the ability to exit or sell it or keep it and have cash flow, they're all there. If you get yourself in a situation where you outspent your income and you need to raise money and there's no money to raise, then you can get pushed in a corner and have a forced sale, which we try to avoid at all.
[00:06:43] Susan Barry: Yes. Well, for listeners who are new to RBN, give us the plain English version. How do points of crew on a home purchase or sale? I'll let you explain it, but why are they tied to the agent's referral fee?
[00:07:03] Kipp Lassetter: Well, good question. I think of all the things I've done with the exception of just cooking barbecue, this may be one of the simplest, and if you are looking to buy or sell a home. If you come to RBN, we will refer you and give you a choice of top performing agents in that market that you're looking to either sell your home or buy a home, or in many cases both sell and buy a home. And it starts with a referral to a really good agent. These agents are carefully selected and sign participation agreements with RBN, where they commit to a certain level of standard of professionalism in dealing with our customers. In return for that referral to them of a very qualified and motivated buyer or seller, they give us a referral fee of closing. And that is customary in all of real estate across the country and in most markets internationally. And we use the majority of that referral fee to fund the reward points that go back to the customer. So, in effect, it's a big discount on commissions and so big that depending on how you use your reward points. It may be greater than the entire amount of commission for the total home.
[00:08:37] Susan Barry: So on redemption, you have built an ecosystem that includes a travel portal, a boutique advisory for big experiential trips, I think like safari, stuff like that, and a one-to-one points transfer to virgin's loyalty program. What redemptions of that stuff excite people the most? Like, what do people get the most jazzed about?
[00:09:04] Kipp Lassetter: Well, I think experiential travel is the most exciting where they take this. For most people, this is the largest sum of points that they will ever receive from a single transaction. And in many cases, it's enough points to fund a safari trip to Africa. A bucket list item to the Japan and we see all of that. Australia, these big experiential trips that get planned. And a lot of times, they're just using it for more, I hate to say, mundane travel by going to Kansas City to see relatives, or whatnot. But the ones that seem to be the most fine are the ones that really want a special experience. And we call this a guilt-free currency. This is usually experiences they never spend hard cash on, but they're very excited to use reward points.
[00:10:11] Susan Barry: So there is another program called Rewarded Rate, where people can use those points to get a mortgage rate reduction. I think it's like worth about 9 cents per point. What does the math look like? How does that play out and when do people choose that versus the bucket list trip to Japan?
[00:10:33] Kipp Lassetter: Well, for people that really aren't able to take a break from work for whatever reason and money, and they may have stretched really hard to purchase a home they're in. The mortgage rate is really an important part of the puzzle and they can use their points to effectively lower their rate through partnerships that we've established and that can be substantial and up to what you talked about in 9 cents a point. And that's probably the maybe the highest return on points that you can have in terms of value. May not be the funnest, but I guess it's fun every time you make a mortgage payment that's less than you would've without it.
[00:11:24] Susan Barry: That makes a lot of sense. Well, we like to make sure that our listeners come away from every episode of Top Floor with a couple of very practical, tangible tips to try in their businesses or in their day-to-day lives. What is a lesson from RBN about keeping status and benefits meaningful versus the sort of points inflation and crowded lounges that we see?
[00:11:52] Kipp Lassetter: Well, we're a little bit outside the industry because in terms of loyalty, our transactions are episodic and not like a hotel stay that you may stay in hotels on a monthly basis and earn reward points, but we give such a large amount of reward points. And provide ways when they use the portal that they're able to earn more reward points or purchase reward points if they fall short of a major experience they'd like to have. And so essentially we look at purely a large incentive on top of using a really carefully selected real estate agent. And for us, we can't lose fact that it's the most important thing we do is give you a really good real estate agent referral because really no amount of points is gonna make up for really bad real estate experience, agent experience. And so we know that we stay focused on that and we make sure that the service that we provide is premium and then there's icing on the cake at the end. I think in terms of experiences, I think the whole industry is looking at putting together experiences that match the desires and the taste of their customers and better ways to spend their points than just trading 'em for hotel nights. But now we see that trend as well, and we think we're participating in that aspect of the trend.
[00:13:37] Susan Barry: Speaking of trading points for hotel nights, if a brand, a hotel brand, wanted to try out this big ticket points concept, maybe with vehicles or luxury retail, home purchases, all that stuff. Are there pitfalls that you think they could avoid based on what you've learned?
[00:14:02] Kipp Lassetter: Well, I don't see that there are real pitfalls in trading. A lot of it is just the resources to develop the relationships to allow those transactions to happen that meet the financial objectives of the entity. And so negotiating member discounts and better ways and better value on the point trades just takes up bandwidth from executives. And that may be the downside of creating more creative ways to use reward points. I know there's a trend in the industry. There's moving away from reward points, but I think the only thing worse than having our loyalty program is not having one. And I think it's driven so much business historically, and then I think it will continue to do so in the future.
[00:15:10] Susan Barry: Kipp, we have reached the fortune telling portion of our show, so you have to predict the future and then we will come back later and see if you got it right. What is a prediction that you have about the future of loyalty or reward programs?
[00:15:26] Kipp Lassetter: Well, I wish it was hard to predict, but I think it's pretty easy and I think the impact of AI on reward programs is going to be substantial and it's already becoming substantial. But the ability for an entity to hyper-personalize offerings to their membership is going to be expanded geometrically, and that's going to be through AI. I think the ability to land and experience to know that you're a Bruce Springsteen fan, which seems to be popular lately. And then to also know that your bucket list is to go to Tokyo and then to put together, we have a concert of Bruce and Tokyo just for you, but you have to trade all your points for it and that type of hyper-personalization. I think we're gonna see more and more. That was hard to predict, but I think it's pretty easy.
[00:16:32] Susan Barry: Do you think the role of AI in that chain of events that you described is the research part, the knowledge of an individual member part? Neither something else?
[00:16:47] Kipp Lassetter: I'm gonna be once again boring and say all of the above. I think people that hold the points, you're gonna use AI to best leverage the points and really in what we call the gamification of points. I have these points, I wanna do this, but what's the best way to do it? And I think AI is gonna be a very powerful tool because that's always a very dynamic environment that changes day to day and keeping track of that.
[00:17:17] Susan Barry: Well, it's deliberately confusing, right?
[00:17:20] Kipp Lassetter: Well, it is. But that's the gamification, right? It's always the same. It wouldn't be fun to play.
[00:17:27] Susan Barry: If you could wave a magic wand and change one thing about how rewards programs are designed or valued today, what would it be?
[00:17:38] Kipp Lassetter: Well, honestly, I think the challenge is how do you bring new members in and make them feel welcomed without making them feel that it's a mountain too tall to climb to get to a point where you're gonna be recognized by that business.
[00:18:00] Susan Barry: It's such a good point. I think about all of the loyalty programs that I'm the basic tier in. Just based on where I live and where I typically travel. And you're like, why am I even worrying about giving them my number for this? It's not gonna do me any good.
[00:18:16] Kipp Lassetter: Yeah. It's like when I go to Ace Hardware, they wanna know my number. I said, don't worry about it. I'm just buying a pack of pencils.
[00:18:22] Susan Barry: Right. You're getting a dollar of my consumer impact. Chill out.
[00:18:28] Kipp Lassetter: I think there is a loyalty program fatigue that happens. But I think also, I remember when I was a road warrior, and I remember at the end of the year sitting next to people that are literally just flying to get their status or keep their status.
[00:18:49] Susan Barry: I've done that before, just like a mile run for sure.
[00:18:53] Kipp Lassetter: Yeah. I think the status side for travelers is a really, really big deal, and I think that will always remain that way to be recognized. The question is, how do you bring on new people and give them that same recognition in hopes that they become a loyal customer?
[00:19:18] Susan Barry: I think that there's a dilemma in rewards. We'll just say rewards 'cause I think it's a little bit of a misnomer. But in rewards programs now, for example, you can get more status on an airline by using their co-branded credit card than you can by actually flying the airline. And so on the one hand, it's like, “Okay, what are we rewarding here?” But on the other hand, it makes sense, like your most free, people who invest the most with you deserve to get the best rewards. I feel like that's a dilemma that's really tricky and difficult to untie. Do you have any thoughts on that?
[00:20:00] Kipp Lassetter: Well, I think they're certain groups, if you look at a certain airline, they separate points that are earned from actual flying miles versus the other points that you learn through the various other activities of a credit card, etc. And I don't know what formula they combine to get loyalty and status and all of those things. I would know if I was still traveling.
[00:20:29] Susan Barry: You would know it intimately.
[00:20:31] Kipp Lassetter: Yeah, no. I've traveled enough that I've got a multimillion-dollar status on one airline. I'm not sure I'm really proud of, but I think it is ever challenging and it's always changing. They're always changing the rules and they're trying to not lose their heavy, frequent flyers. But also keep the program open up enough that when you want to use points for ticket, you can actually use them and they're not blacked out or unavailable or ridiculous.
[00:21:07] Susan Barry: It's tricky. I agree with you that AI has the potential to be transformative. I'm not sure that rewards programs can continue to scale without completely devaluing themselves, like without completely becoming worthless. That's why I like the way that you guys have your experiential travel setup, so that someone can just cash it all in, go on safari, and then feel incredibly rewarded for having bought their house.
[00:21:41] Kipp Lassetter: Yeah, and I think that's the fun part of buying a house. But we try to put a little bit of fun. A little cherry on the top of this Sunday at the end of the process.
[00:21:55] Susan Barry: Okay, folks, before we tell Kipp goodbye, we are going to head down to the loading dock where all of the best stories get told.
Elevator voice announces, “Going down.”
[00:22:08] Susan Barry: Kipp, what is a story you would only tell on the loading dock?
[00:22:12] Kipp Lassetter: Well, hey, I've got it. One story for the loading dock and maybe one story for the laundry room.
[00:22:20] Susan Barry: Okay, fantastic.
[00:22:21] Kipp Lassetter: Below the loading dock, right? Most laundries of the day. So the first one is I'm a longtime pilot and when I first got my pilot's license, I was really excited and picking, making up places to fly. So we flew up to see my wife's family and we landed in an airport near their home, but it was a tiny airport with a tiny runway, and it looked like a sidewalk compared to the ones I was used to landing at. And so for a new pilot, this was pretty challenging, but it worked out all right. When I landed, I noticed there were really no buildings. There was a little bit of a shack with little vending machines in it. And then there was this line of lawn chairs. I was filled with these old guys that were old aviators that had their planes out there, and they would just watch people.
[00:23:15] Susan Barry: They were just hanging out.
[00:23:18] Kipp Lassetter: Shoot the bull and watch people land and take off. And then my mother-in-law was there and she was dying to go flying. And so I was really excited to take her flying. We flew around a little bit, coming in for a landing, and because the runway is so tiny, that for pilots, they'll understand what I'm saying. It appears further away from you than it really is. And so your flare to land can be thrown off for an experienced pilot and certainly for a new pilot. It threw me off and basically, I did not flare. And so what happens is your nose will hit first and rather abrupt, violent bounce, and then the plane oscillates and bounces. And the bounces get bigger before they start to settle down and I am bouncing.
[00:24:13] Susan Barry: Wait, are you bouncing up and down on the runway?
[00:24:16] Kipp Lassetter: I am, we're literally bouncing up and down the runway.
[00:24:20] Susan Barry: The whole plane or the nose of the plane?
[00:24:23] Kipp Lassetter: No, the whole plane.
[00:24:25] Susan Barry: Oh, wow.
[00:24:26] Kipp Lassetter: Hitting the ground. Leaving the ground. Hitting the ground. Leaving the ground.
[00:24:29] Susan Barry: But you did not get a divorce as a result of this is what you're saying?
[00:24:34] Kipp Lassetter: Oh, it goes on. So we bounce and we finally settle down and just as we're running off the end of the runway into the grass. But fortunately, grass around the runway. And so now I'm thinking I have to turn this plane around and I have to go back and park and I have to walk by these old guys. And so we parked the plane. We're getting out. We're now doing the walk of shame right down these old guys. And I looked over and then I said, “Guys, this is the last time I'm letting her land the plane.” He goes, I know what you mean. She damn near killed you. She was on the other side. They go, what did they say? He goes, “Son, they said it wasn't such a great landing.”
[00:25:22] Susan Barry: Oh no, that's terrible. Poor thing.
[00:25:27] Kipp Lassetter: So that was that story. Now for the laundry room story, if you have time.
[00:25:33] Susan Barry: Of course.
[00:25:35] Kipp Lassetter: So I was working as an IT tech that we talked about. It just had a brutal week. It was my 50th birthday. I know you can't believe I was actually 50 at one time. But we decide we're gonna fly up. Have a little getaway. Go to Napa wine country. We had a beautiful place to stay. Little villas and a wonderful restaurant and breakfast, and whatnot. So we fly up there. Go to dinner that night and I was just exhausted. By the time we hit the hotel room, it was like a string of clothing, like that one commercial where it was off at the sidewalk, but it was a string of clothing that ended up at the bed and I fell asleep and I have passed out. And in the morning, I get up, I go into the restroom and I'm washing my face or whatever, and then I hear my wife goes, “What the hell happened?” And I'm like, so I run back in and she is with the lights on, looking at the bed. And on my side of the bed is a massive brown spot.
[00:26:48] Susan Barry: Absolutely not.
[00:26:50] Kipp Lassetter: Oh no, it's really true. And my wife's looking it, so he turned 50 and now he's incontinent.
[00:26:57] Susan Barry: Please tell me that's not true.
[00:27:00] Kipp Lassetter: All I said, that's why we're in the laundry room. More than metaphorically speaking. So, we look at this and I said this, no. And then, after careful inspection, we realized they put chocolates on the pillow. I was out at this chocolate melted underneath my body and it was from my buttocks to my shoulder, like a perfect imprint and I'm looking at this and going, “Oh my gosh, you gotta be kidding me.” And you can't imagine how much of a mess one little bar of chocolate is.
[00:27:41] Susan Barry: That is insane.
[00:27:43] Kipp Lassetter: Yeah. Well, so I said, now what are we gonna do? We're gonna have these maids come in and this is really, really bad. So I called the front desk, and I said, “Can you send housekeeping here?” Because I wanted to be there when they showed up.
[00:27:57] Susan Barry: You're gonna explain yourself.
[00:27:59] Kipp Lassetter: What do you say? So as luck would have it, well, housekeeping showed up in a few minutes, and as luck would have it, the lady did not speak a word of English. She walked in and I'm pointing at the bed. She's looking at the bed. Completely horrified. And I'm trying to explain to her that it's really just melted chocolate. And I'm saying it's okay. Every facial expression she gave me was very clear to let me know it was not okay. Scampered away. And then so oh no, I gotta go up to the receptionist and talk to someone. So we're going to breakfast, we clean up, we go over there and we stop by and I go, listen. Let me tell you what happened. So it's not what it looks like. It's a piece of chocolate with facts. Can you please tell your housekeeper not to worry? And they go, “Oh, okay, we'll take care of it.”
[00:28:58] Susan Barry: Like taking bloodborne pathogen training in the back room.
[00:29:01] Kipp Lassetter: So we go have breakfast, and then when we go back, our hotel room looks like a scene out of ET with hazmat. Like the entire housekeeping staff and engineering, and everyone there. And it was really, really horrible. And finally, we shoo them away. We finish up and we go to their first winery. And we walk in there and they're talking about what happened out at the hotel. What is going on here? And they go, well, all the wineries in this area, we all have breakfast there. And that's all they were talking about. I was ready to get on the plane and fly back home.
[00:29:43] Susan Barry: I bet you never went back there.
[00:29:46] Kipp Lassetter: Well, it's been a little while. I don't wanna give up my age, but I think we're safe to go back. Since that time, I'm telling everyone to check for the dangerous chocolate chip.
[00:30:06] Susan Barry: Kipp Lassetter, thank you so much for being here and for having not one, but two excellent stories. I know our listeners learned a lot and I really appreciate you riding up to the top floor.
[00:30:19] Kipp Lassetter: Thank you. Enjoyed it.
[00:30:22] Susan Barry: Thank you for listening. You can find the show notes at topfloorpodcast.com/episode/225. Jonathan Albano is our editor, producer, and all-around genius. He even wrote and performed our theme song with vocals by Cameron Albano. You can subscribe to Top Floor on Apple Podcasts, Spotify, or wherever you like to listen, and your rating or review will go a long way in helping us give you more of what you like.
[00:30:58] Narrator: Thanks for listening to the Top Floor podcast at www.topfloorpodcast.com. Have a hospitality marketing question? Reach us at 850-404-9630 to be featured in a future episode.