Chase Alderton: Welcome to Hit Subscribe, a podcast by Recharge, created to educate, inspire, and connect the subscription ecommerce space. We recently hosted ChargeX 2022, Recharge's annual user conference, focused on the future of ecommerce, where we were able to sit down with merchants, partners and industry veterans live on site, to hear their biggest learnings of 2022 and how they're strategizing for growth into the future. I'm your host, Chase Alderton, so let's get into it. Brandon, thank you for joining us.
Brandon Amoroso: Thank you for having me.
Chase Alderton: Tell us a little bit about yourself and ElectrIQ.
Brandon Amoroso: So I'm the Founder and CEO of ElectrIQ Marketing. We are a lifecycle marketing and retention agency, primarily focused on the Shopify ecosystem. We work with Klaviyo and Incentive primarily, to build out our email and SMS programs, and then we also have a large web design and development team. So those are really our two core focuses, and then we also have some complimentary services like SEO and content and organic social, but everything that we do is about creating best in class customer experiences because that, in turn, improves retention and increases LTV.
Chase Alderton: Spot on. So I know today that you're bringing kind of a unique idea that you want to talk through. So talk to me about it.
Brandon Amoroso: Yeah. So I mean, historically we've been seeing pretty low adoption rates for brands that we work with who utilize points based loyalty programs. And I think it's because, and there's a lot of reasons, I'm making assumptions on here, but there's so many Shopify stores that went and downloaded an app, and now they all have these points based programs. And most of them are half baked and they weren't thought through and they were just downloaded and the thought was somehow people are going to use it now, which doesn't check out. Second is what does 1,000 points actually mean? For one brand that could be very valuable, for another brand, 1,000 points could literally be worth a penny.
Chase Alderton: You could just 10X, or 100X and just make the points seem like they're really big.
Brandon Amoroso: Exactly. So there's a lot of customer confusion from the get go, like what am I actually even getting with this? And then third is friction, there's so much friction. You have to remember you have points, go into your account, redeem it, you get a voucher, then you have to make sure to apply it to your checkout. It's even worse if you're a subscription customer, because if I'm a subscription customer, just have it happen automatically. You're telling me I got 2,000 points now, so I get $20 off, why is it on me to go in, get the code, drop it into my recharge portal, just have it happen automatically.
Chase Alderton: Especially because you know there's a date and time, a very specific date and time when that charge is going to be run anyway. So having to remember to go in there, log into your portal, apply that and then hope that it still transfers through to that next order is exhausting.
Brandon Amoroso: Exactly. And for us, it's all about reducing friction for the customer, and then you also miss out on the surprise and delight aspect too with a points based program. So what we've been doing is building what I've been calling just manual loyalty programs. So in Klaviyo, in Recharge, we will basically set rules, so let's say we want to do it up to 12 orders or you could do the same for dollar amounts too, like customers over 250 are in this tier, customers over 500 are this, customers over 1,000 are this. But the triggers are you can just do it in Klaviyo. So as soon as order number two hits, include a free shirt. As soon as order number three hits, automatically take $5 off the order. As soon as order number six hits, you get a merch box. Order number 12, completely free.
Brandon Amoroso: So all of that can just be built in the back end, and then you can not only use that as promotional material for the customer on your subscription landing page or whatever it may be, but then you're constantly reinforcing it through every transactional email. So we have conditional blocks in our transactional emails where if it's order number two for you, it shows what you're getting in order number three. If it's order number three for you, it's reinforcing what you're going to get in order number four. And so the retention rates we've been seeing are just skyrocketing because customers don't have to do anything now, it's just, wow, of course I'm going to stay on for order number six, I have this coming automatically.
Chase Alderton: You just told me exactly what's going to be in the box and I definitely want it, so I'm absolutely staying retained.
Brandon Amoroso: Exactly.
Chase Alderton: Very interesting. And then all this stuff just plugs automatically into all the different features you use, so if you're including a free shirt, that just ports into your warehouse and you make sure that the next box you pack includes that shirt for it.
Brandon Amoroso: Exactly. Exactly. Yeah. And if there's any fringe cases, we can always utilize Shopify flow for order tagging or to bracket our customers, so that the 3PL knows what to do with that order. But I think for me, it's definitely been the way to go because there is so much friction, I find, with the points based programs and especially for, we have one company in particular who has a single hero product that you subscribe to it, and that's the main SKU. And so we have that program for that particular item, and so we can do things, like order number six, now as opposed to $40 every month, you're now at $35 a month forever, forever.
Chase Alderton: Just in perpetuity.
Brandon Amoroso: Right. And then as soon as you hit order number 12, it actually ships completely free. And we're able to do that because it's a single hero SKU that drives the majority of their business and revenue, and if you're a customer of theirs, you're a subscription customer for that product.
Chase Alderton: So you're not doing any sort of skipping or swapping or anything crazy on the back end with SKUs, you're literally just kind of discounting or adding or doing whatever it is, based on that one single SKU.
Brandon Amoroso: Yeah.
Chase Alderton: This will work across other SKUs though, if you're doing a subscription box, or if you're doing an item that changes month over month, it's still fairly easy to kind of move these things around.
Brandon Amoroso: Yeah. And there's different rewards that you can do as well, that work with companies that have a larger catalog, you just have to think about how can you make it work with your existing tech stack. You don't always have to just keep adding a bunch of different tools to try and make it work.
Chase Alderton: We're here at ChargeX, we're talking with a bunch of the agencies and partners who are here attending the event. On the main stage earlier, there were a lot of conversations about what to do with inventory, with all the issues going on. I see that this is probably a way that you could fold that in as well. If you have extra inventory, old boxes, new products, whatever it ends up being, this is a great way to fold something in like that as well, that feels surprise and delight to the customer, but to you, part of it is liquidating your inventory that you don't need anymore.
Brandon Amoroso: Right. And also just more product discovery, more brand adoption. It's never a bad thing for your customer to get additional product in other categories when they're not even paying for it. So you're just automatic. Especially if you're a company that has a bunch of different verticals, like we work with Soylent and they have very distinct product categories and a lot of their customers only shop one product category. So how do you get them trying other things? Because if they try other categories, AOVs going to go up, lifetime value is going to go up. So that product discovery is really important and crucial to embed within your loyalty program.
Chase Alderton: That data's really interesting that a lot of subscribers of Soylent only work on one product category. So you're saying they only do shakes or they only do powders or they only do bars or things that.
Brandon Amoroso: Exactly.
Chase Alderton: It's hard to get them going across. Which even though it's the same brand, seems like that's something that should be happening. So you put in a bar or you put in a trial of a protein pack or whatever it is.
Brandon Amoroso: Exactly.
Chase Alderton: And have them thinking, okay, this is something that I could end up doing, and then you broaden their horizons.
Brandon Amoroso: Yeah. And it's such a low cost too. I mean, you ordered the powder, okay, great, let's just throw one bar in there. Okay, worst case, you just don't like it and no harm, no foul. I mean, you're not paying for it. So I mean, for me, it seemed interesting, but then I started to think about how I consume from brands, and most of the time I'm not shopping the full collection, I go to a brand for a very specific thing. So it's an interesting use case.
Chase Alderton: Absolutely. Closing out here, give me a piece of advice to a brand who is trying to scale, and you're not allowed to use SMS in your description.
Brandon Amoroso: Not allowed to use SMS.
Chase Alderton: Not allowed to use SMS.
Brandon Amoroso: Oh goodness. It's going to sound a little fluffy, but just think about how you would want your experience to be of your brand, if you were a customer. I think people over complicate things, all of us, we're all consumers, so just think about the best brand experiences you've had and how you'd like to emulate that for your company. And a lot of the times it comes down to personalization and to personalize, you need to have data, so you need to have zero party data aggregation efforts in place. So just think about how personalization could better improve your customer journey, and then from there, go and figure out how to get the data.
Chase Alderton: Awesome. Brandon, thank you for joining us.
Brandon Amoroso: Thank you.
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Chase Alderton: Chelsea, thank you for joining us.
Chelsea Jones: Thanks for having me, Chase.
Chase Alderton: Tell us a little bit about yourself and Chelsea & Rachel.
Chelsea Jones: Yes. So I am grateful to be here, I'm a Co-Founder of Chelsea & Rachel Company, and we are a full service agency with strategy, leads into UX, UI design, leads into custom development work, a lot in subscription, for brands in the food, beverage, wellness and beauty space.
Chase Alderton: Amazing. And one of our top agency partners in the Recharge network, so we're very happy to have you.
Chelsea Jones: Thank you, it's great to be here.
Chase Alderton: So we are hanging out at ChargeX 2022, a lot of really interesting conversations happening, kind of blending the past and the future, everyone is kind of tired of the whole COVID conversation. So looking forward, trying to figure out how are merchants now and how are customers battling this idea of subscription fatigue? So I'll start there, what's your idea of battling subscription fatigue?
Chelsea Jones: Well, first off, I love looking forward, I'm chief visionary at the agency, but it really is so important when you look at subscription fatigue, is how would you deal with it as a user? I buy lots of subscriptions and I'm over so many of them. But what makes them over it is usually there's no more surprise and delight, there's no more interest of something different and new, it's just the same thing all the time, and it feels monotonous. So you really have to combat that by adding in new details, whether it's a different insert or it's a surprise little gift of some sort, or it's like, hey, did you know this? You want to make sure you're engaging with them just like a relationship.
Chelsea Jones: So I always like to even say that in terms of subscription ability needs to be like relationships, in the sense of this is your relationship with your customer, how are you actually engaging that within a product? Are you saying, how are you doing today, in a weird way that makes sense for you as a brand, but those little things go a long way and the details really matter.
Chase Alderton: Absolutely. I likened a subscription to a relationship yesterday, on an episode here. So I think the metaphors landing a little bit.
Chelsea Jones: Perfect.
Chase Alderton: That's very cool. I've always said that I think education is a big piece that people miss in subscriptions and in boxes. I think that's a really great piece for it. If you keep sending the same thing over and over again, there's an element that you can add in there of here's how to use this, or here's a creative way to make this different or here's something that's kind of unique and interesting. And your same metaphor, if you're taking your date out to the same restaurant every week, it's going to get boring, it's going to get old, you got to freshen things up a little bit.
Chelsea Jones: You do. And I think there's a balance, because you also have people that love routine and love the same concept. I had a grandfather that would go to the same little cafe and have his coffee and eggs every morning or something, you have nostalgia, which is important to kind of have on consistency, but then you have to have interest of what still engages you, what is going to be ... And we're in a post pandemic-ish age, where everybody is on screens all the time or has been, and just inundated with it. There's a stat that your phone won't be more than three feet away from you for the rest of your life. That's kind of crazy. Yeah, it's a lot.
Chelsea Jones: So if the only way to combat that is to play both sides of that, how do you have nostalgia of this is consistent, this is my product, it's good all the time, and add in the fun of the creativity, like a relationship, like hey, did you know about this? And I think it's really important as brands look ahead of this, that we also think larger of the impact of education. So you brought up education, that's so critical, but think in terms of giving a gift or think in terms of how can you pass this on or be generous, there's this component of just being good humans to good humans, in a brand set up that's really important.
Chase Alderton: I think you're spot on. So then let's kind of take that next step as prophets as we are, we'll try to predict the future here, so how do you kind of fold this stuff in as we move forward into the rest of 2022, the second half, is this a customer portal thing, is this just as simple as adding something into your box and then your products, what are some solutions?
Chelsea Jones: I think it's both, I think the best brands are the ones that look at their customer journey often and are always trying to figure out ways to improve it. White gloves service is important, there's a reason people will pay more for fancy cars versus not, or fancy hotels versus not. You have to think of it in the same way though as your brand. How are you really engaging and caring within your space, and what does that look like, and then delivering on that. So it really has to be twofold, you're sending a package to somebody on subscription, can you add a little surprise and delight thing, that makes it where, oh, I really do want to stay on this long term because this is something I look forward to, rather than, oh, this is just another thing that's hitting in my credit card.
Chase Alderton: So you said customer journey, customer experience, how often do those actually change? Is a brand, should they be looking at this thing every couple weeks, every couple months, every year or so? How quickly do you talk about the customers supposed to do XYZ, when they get to their next box, when they do the next thing, where are the lines there of how quickly you develop into the next thing?
Chelsea Jones: Yeah, it's such a great question. So honestly it's changed over time, the pandemic made it change much faster because everyone is on their screens all the time and figuring out stuff, and you had to up level your customer journey. I would say right now though, it's kind of leveled out, you do need to re-look at things. If you haven't looked at them often, then start in that three week cadence, if you have and you know kind of consistently, I would do a bimonthly changeover and re-look at things, especially as you're getting into different seasons. We have to remember as humans, we're dealing with seasons in nature, there's seasons in ecommerce as well. So if we don't adapt our user flow to that, then we'll be missing out.
Chase Alderton: So then seasons is another really interesting one, do you have to play a game of shipping based around seasons, or can you continue to work with your products and just kind of hope that they ... I feel like it's kind of a product question. Does product kind of blend seasons or do you need to blend seasons, or is there something that you're trying to ride out and make sure that everything works out smoothly?
Chelsea Jones: I think it's a case by case basis a little bit with each brand, because some are more seasonal than others, but I do think it's something that you have to be aware of. Shipping is always going to be a challenge within that, and we have to look at the components of what does that look like in terms of the seasons. So in food and beverage, if you have a product line let's say that has chocolate, it's harder in the summer on your shipping. So maybe you have to look at giving more lost cause to shipping at that point to keep your customer base, where in the winter it's not in the same scenario.
Chelsea Jones: But there's a lot of nuances in that, I think what's just really important for brands to think of, just as we as humans need to reset or have sleep or have different things, brands need to have some of that cadence too. Yes, you have an online D2C that can sell 24/7 and all of those pieces, but if you look at your sales, there's going to be spikes at different times of the day, just like there's going to be spikes in different seasons, and it's important to understand that and then put your foot on the gas when that time comes.
Chase Alderton: Putting your foot on the gas is such a good metaphor, that's what I was going to say, is there a time where you're supposed to kind of pull back, take a week or so and try to figure out what's our plan for the next three months, what's our plan for the next six months? Black Friday's coming up, obviously not immediately, but you need to start planning for those kind of things in April, May, June, to make sure you're ready for that. Are there moments where you're allowed to kind of pull your foot off the gas and then know that, okay, now it's time to go, let's put the foot back on the gas?
Chelsea Jones: Yeah. I always say you need to be looking ahead [inaudible 00:15:13], and the brands that have done this best with us have done that in that cadence. So if they know this might be a slower cadence or maybe they're waiting on some supply chain things or it's just a lower time in business sales in general, then you have to restructure and look ahead at that, so that you can make these pushes count. The beautiful thing with ecommerce is you can have sales skyrocket in a short amount of time if done properly, but you got to do the planning beforehand. And people think the planning sometimes is what they can skate by on, and really that's so important. Planning and strategy ahead of this is what makes the brands that really succeed successful, apparent to the ones that are just trying things and testing it out.
Chase Alderton: It's such a good point, I want to double down on it really quickly. We live in the social media world where you post something on social media, whatever it is, and everyone thinks, oh, you're an overnight success, but you don't see that six to 12 months prior that you were planning the strategy, figuring things out and AB testing. So when the time comes, it looks like it was an overnight success and it really has been strategy and planning all along, and I think that's where you're thriving at Chelsea & Rachel.
Chelsea Jones: Absolutely. And that's the key thing that we started from the beginning, we've been in business over seven years and when Rachel and I started it, and now we've grown to 30 staff members, it's based on that piece, strategy needs to be, and the planning needs to be what impacts UX, UI design and custom development. If you don't do that, then you're literally just jumping over something and you're going to cause more problems in the future. And I know every brand that's listening to this, if they have components, everyone has a story of some web or dev issue or problem and tech that's broken, but usually that has come from a poor pre-planning purpose. There's always going to be things that happen, but if you can plan ahead and have a strategy for the different scenarios, it makes it a lot easier.
Chase Alderton: Final question. We're talking a lot about second half of 2022, how do you see everything changing? Do you think supply chain is getting better, getting worse? What do you think some of the problems or some of the solutions are going to be in the second half of this year?
Chelsea Jones: Great question. I think there are some things that are getting worse, just based on needs, costs, inflation, all of that, is a lot in the economy and that impacts everything. But I also think there's a lot of opportunity, in every historical downturn, there has been so much opportunity, this is when people shine. I think it's also more opportunity for humans to shine on a leadership level, and an ability to actually take their brand to the next level and not let the pressures crush them. It's easy for anybody in a bull market or in all these things, to just sell. We saw this huge spike in subscription, you could put something online, sell it for during the pandemic.
Chase Alderton: It's just going to sell.
Chelsea Jones: It's just going to sell. But that's not the case now. That's a great run, we need to have the learnings for them. But the consistency factor is what's really important, and the subscriptions that are consistent in talking to their customers often and re-engaging with them, they are the ones that are winning and they're winning by significant numbers to back it.
Chase Alderton: Absolutely. I think it's a fantastic way to close, very optimistic. So thanks for joining us.
Chelsea Jones: Thank you, Chase.
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Chase Alderton: Marcus, thank you for joining.
Marcus Ohanesian: Yeah, thanks for having me. Happy to be here.
Chase Alderton: Tell us a little bit about yourself and about Trellis.
Marcus Ohanesian: My name is Marcus Ohanesian, I work at Trellis as an account strategist. We are a full service digital agency, based out of Boston. Myself, I come from a design and project management background, also a drummer part-time or have been my whole life basically, and sandwich enthusiast, I love talking, making, eating sandwiches.
Chase Alderton: Sandwich enthusiast is a new one I haven't heard. That's good.
Marcus Ohanesian: Yeah. I feel like a lot of people here can connect with that, and I'd rather talk about sandwiches with a little ecommerce thrown in.
Chase Alderton: All right, we'll see what we can do. Well, I know today we want to talk personalization from a high level.
Marcus Ohanesian: Yeah.
Chase Alderton: So I'll give you the floor and maybe work in a sandwich reference or two, because now I'm hungry.
Marcus Ohanesian: I'm up for that challenge. All right. So yeah, there's been a lot of conversation here, specifically at this Recharge conference, about personalization and that user journey, and really the importance and the value of that versus a generalized approach. So tools like Rebuy or Octane. So Octane is a product quiz platform which helps kind of have more of a curated user experience. So implementation points could be a popup model on the homepage or could be an embed on an actual page, really asking a small set of questions, four or five questions, recommending a product at the end, offering a small discount code, capturing their email there, that ties directly into Klaviyo and then using Klaviyo segments to further segment and personalize that experience. So you're not sending out those general buckets of here's a product that we're offering, I'm generalizing intentionally because it applies across all brands. And then Rebuy on the front end, as far as PDP, Cart, Shopify plus checkout, really having that intelligent engine that's running in the background.
Chase Alderton: So we could dive into this and we could do so much content here, but I want to back up a little bit and just kind of take piece by piece a little bit.
Marcus Ohanesian: Yeah.
Chase Alderton: So there's a lot of ways to sell subscriptions obviously, you can sell any product at any time, seasonality comes into play, all that kind of stuff. But if you're talking about building a brand, which at ChargeX 2022, a lot of the conversations have been around building a brand, being personalized, you're really, really nailing everything here. So let's just go a little slower, Octane putting the quiz up on the front, what's the purpose here, trying to figure out if you're selling shirts, you usually wear long sleeve, you wear shorts sleeve, are there buttons, are there [inaudible 00:20:22]? Instead of just saying, here's all our shirt catalog, purchase something.
Marcus Ohanesian: Right. Think of it as a way, just like collections, you're grouping, you're categorizing, you're filtering pre done basically, in a way. So the objective of a quiz obviously, skincare brand's a great example, what's your skin type, are you dry, are you oily? That's a pretty topical one. And then on top of that, sports brands, so if I'm from Boston, do you like Boston Red Sox? Okay, so I'm not going to show you any Yankees things, right?
Chase Alderton: [inaudible 00:20:50] for me please.
Marcus Ohanesian: Right, exactly. So another example there. So really it's almost like you're talking to the user on the front end and asking them those set of questions, to really narrow down and dive into the specific product set.
Chase Alderton: Cool. So then once you have this product recommendation, ideally it's personalized, it's tailored to exactly what the customer wants, now you start talking about Klaviyo, [inaudible 00:21:13] things in the flow. So dig a little bit more into that.
Marcus Ohanesian: Yeah. So in Klaviyo and I'm definitely no Klaviyo expert, but at the basic high level you're pulling in these email addresses because you're giving them that 10% discount code or whatever may be. So thanking them for answering those five questions, because no one wants to sit there on the website, but it'll alleviate a few clicks. So they're in Klaviyo now, you have them segmented or tagged, however you want to kind of categorize it, and now you can target market specific content to them. So in those specific campaigns, I know that this person has chose Boston Celtics, so I'm not going to put Los Angeles Lakers or any other content that may not be applicable or products that may not be applicable to you in your-
Chase Alderton: You sell all those things, sell teams or whatever it is.
Marcus Ohanesian: Right. But now you can have smaller segmented and targeted campaigns, which will result in a higher conversion rate, because of that.
Chase Alderton: That's amazing. Okay, so now we've covered most of the front end. So you get onto the site, you do this quiz, found your perfect subscription, we're pulling into Klaviyo, so we're doing some of that kind of stuff. Now you mentioned Rebuy, so we're getting cross sells, upsells, things like that.
Marcus Ohanesian: Yeah. So I feel like that's definitely a huge missed opportunity with a lot of merchants that we've seen, and that's where we can provide value to our clients. And even if you're just on your own as a merchant, is having a more powerful engine like Rebuy in the background, gathering all this data, gathering the profiles and sort of building the profiles of your users here. A lot of merchants are like, we'll just use product tags and Shopify, and great, cool, but when you start to scale, it doesn't scale well.
Marcus Ohanesian: So we've had merchants start like that and it's worked very well. And then they're like, now we have 500,000 product SKUs, we can't manually adjust every product tag and stuff. And there's a lot of robust features in Rebuy, to do dynamic rules and all that sort of really nerdy stuff, if you really want to do a deep dive into it, but even at the most basi