Chase Alderton: Reggie, thank you for joining us.
Reggie Black: Thank you for having me Chase, pleasure's mine.
Chase Alderton: So I'm super excited to talk to you today. I know you have a really cool history in eCommerce. Your background is very unique. Give us a little bit of that info now on yourself and on Better Way Health as well.
Reggie Black: Yeah. I've always been a computer nerd. I've been into computer since I was a kid. So, naturally, when I graduated, went to college and got an IT degree. So I started off out of school and started my own IT business, was doing a lot of small business networking and stuff for plumbers and HPAC guys, and any kind of small business, and then picked up a customer called Better Way Health, which is where I'm at now. They called me in to come and help with some of their IT stuff. So I started off as the IT guy here at the very end of 2010. So I've been here at Better Way Health a little bit over 11 years, took about three years during that process until I came on board full-time.
Chase Alderton: Very cool. Then define Better Way Health for us, what do they do?
Reggie Black: So we are a 100% online supplement company. We sell dietary supplements. We're really focused on one particular product called beta glucan, which helps boost your immune system, and so we obviously, because we're on the Recharge podcast, do a lot of subscription. Focus on subscriptions. That's been a great part of the business, but yeah, we sell supplements D2C.
Chase Alderton: We're going to dig into some of that beta glucan, talk a little bit, I know you've had a ton of skews and you dialed it back into one in particular, but you conveniently left out a really interesting part of your journey from IT to where you are now. So, how did that process moved and work your way up the chain?
Reggie Black: Man, it's a crazy story. I think we could do a separate podcast on that, but I had a customer who had a company actually, and they referred me to the owners of Better Way Health at the time. So Better Way called me in a position where the person they had running the business had just left. The guy that started the company, his name is Dave Perkins. He started this business in 1999. So we've been selling online for 22 years now, online.
Reggie Black: When he passed away, left the business to his kids who were not really involved in the company at the time, but they had some people that were running it for them, and there was a whole squabble, they got up and left. When I walked into the business, I didn't know what I was walking into, but it was chaotic, the kids didn't know anything about the company. Didn't know how to process an order, to take an order. There was emails and customers, nobody had been in the office for a couple of weeks.
Reggie Black: So, I walked in and they're like, "Just help us figure everything out. How do we log into our shopping cart and how do we take orders and all that?" Just started solving one problem at a time with them and helping them get everything back up and running and stuck around.
Chase Alderton: And then what's your current role where are you at now?
Reggie Black: I am the CEO, I own half the company. So we've got a different partner now, everything has been a great transition, still have a great relationship with the kids, but we are able to build the business to a certain point where they wanted to get out of it, and was able to bring somebody else to buy them. That whole transaction happened at the beginning of 2020. It was great, smooth, everybody's happy, everybody feels like they won in that transaction, which was a unique thing. So, basically the way it set up was, 2010 when I came on up until 2013, they had made some other decisions, hired some people, didn't work out.
Reggie Black: So in 2013, the business was on the way down, heading in a bad direction. And they're like, "Hey, Reggie, you're the only one that hasn't screwed us over, how about you ... You want to take a risk and see if you can build this business back?" And I was like, "Sure." So, came on board full-time and had some incentives to grow and earn some ownership in the business sweat equity, and did that, and over the next three, four years was able to earn equity in the business up to 50%.
Chase Alderton: Super, super cool. We try to focus a lot on actionable stuff in this podcast, what the experience is and how to take that and translate it between different verticals, different businesses, whatever it may be, this one definitely not actionable. You can't really bank on, being an IT guy coming in and 10 years later being the CEO, but cool story nonetheless. I think it's worth of touching on.
Reggie Black: I think what you can do, work really hard with integrity and just treat people right, and always make sure when you show up you're working hard, and that's like opportunity comes when that preparation and hard work and all those things meet in the middle. So I was able to get those opportunities, I think because there was just a ton of trust that was earned over the years.
Chase Alderton: Love it. Yeah. There's a parable in there somewhere about, you always work hard, it doesn't matter if you're at the bottom or the top. So, we'll take that. Let's move on to your product. I know that you focus super heavily on the beta glucan, like you talked about. In the past, you had up to like 50 skews. Is that correct? How did you figure out how to get down to one, what was that process like?
Reggie Black: Yeah, we did. When I came on board, we had 50 different products. We were selling not only the beta glucan, but we were selling green superfoods, like canteens and water filters and all kinds of stuff, which were all great products. But when we're looking at that skew count, not only is there ... You have some inventory issues, cashflow issues, all those things, trying to keep all that stuff in stock. But really my main reason for scaling that down was looking at ... It was like that 80/20 principle where it's like, "Okay, 80% of our profits and our sales and everything are coming from this product." And just realizing that we can't be experts in everything, our customer service team, specifically beta glucan is a technical product, some of these other things are technical as well.
Reggie Black: So, really just like, "Hey, we've got this incredible product here. That's got all this research and everything behind it. I think we've got an opportunity to really just corner this market, and we can't do that well if we're trying to learn everything and sell everything." So we just made a decision to be like, "Hey, we want to be known as the beta glucan company, and so we took 50 down to four over the course of, I think it was about six months, and just focused on that. It's been one of the best decisions we've ever made in the business.
Chase Alderton: So just hyper specialization. I know you're back up to what is seven or eight now, something around there?
Reggie Black: Yeah. We're up to five now, and then we're coming out with the sixth product really soon, which is a beta glucan cream.
Chase Alderton: So still focusing around that same product kind of keeping your niche there and just specializing?
Reggie Black: Yeah. Yeah, absolutely. Just figuring out how we can put it now into different form factors and different lifestyle products because we have pills that people take, but we really want to meet people a lot of times where they're at to, and put another factors and looking at protein powders and coffees and cream and other things that people are using, where they can get the benefits of the beta glucan in different ways.
Chase Alderton: Just changing the vehicle, otherwise it's the same delivery method?
Reggie Black: Exactly.
Chase Alderton: Got you. Very cool. Is there a way that you can build a loyal fan base with that many skews or do you think that the real best way to do it, maybe supplements is just a specific vertical, but is there a way to build that community with a giant amount of skews and with specializing in a bunch of things or is that the appropriate way to do it, dial in and find your real specialty?
Reggie Black: I definitely think you can, because if I had said that you can't ... I think we could point to some examples of companies that do have a couple of 100 skews, it's really hard if you get more than that. But as long as they're focused, I think, in the same category or closely related, people have done that certainly. I think it's just easier if you're focused and hyper-focused on one thing to really own that and grow that.
Chase Alderton: Got you. Do you think that a lot of the customer service are coming for the same reason, so that value prop is just flowing throughout everything you're offering?
Reggie Black: Yeah. When you're creating content and posting and training all those things and then even like cashflow and inventory, just all that stuff gets easier when you only have a handful of skews and more predictable.
Chase Alderton: Got you. So, you brought a customer service really quickly. That's kind of what I want to dial into here. I know that you are really heavy on phone support. What's the philosophy about your customer service approach and how does that tie into the whole business?
Reggie Black: Yeah, that's a great question. I'm really passionate about customer service, always love finding companies that are doing customer service really well. I mean, if you look at like the Chick-fil-A models and the Ritz-Carlton models and those things, like I'm always looking for companies that are doing that really well to create great experiences for the customers. I think because of my background in tech, I'm also passionate about the tech and trying to figure out how do we merge these two together, how do we scale things that should be scaled, and then how do we intentionally scale the unscalable things and have those one-on-one conversations and everything.
Reggie Black: But with Better Way Health, some of it was by accident. When I came into the business, literally it was like they weren't doing anything besides as they were recommended. The product was recommended in a book that a famous author wrote, and he was like, "Hey, if I could only take one supplement, this is the product that I would buy. Here's these people, call them up and here's their phone number in the book." So there was like no marketing. It was just answering the phone all day long, tons of new customers calling from this book.
Reggie Black: So I think I just inherited some of that. When I came into the business, it was like, "Oh, this is different. It's eCommerce, but we do a lot of phone orders." So we've just kept that same thing throughout, we've certainly improved a ton on the technology side and the eCommerce side, but we've never lost that, that's baked into our culture, we'd love for customers to call, we'd love to talk to customers and we can have those one-on-one conversations with them, and we've created an extremely loyal fan base through that.
Chase Alderton: You were able to dig up a couple stats on your phone support. If you can actually get people on the phone and talk through people or talk through the product and actually get people talking rather than just having to place an order, your average order value and your lifetime value, both ... I don't want to use the word [inaudible 00:11:40] but they kind of skyrocket, like they go way up. How was that possible? Is that intentional? You've said you accidentally found the phone support.
Reggie Black: Yeah. The easy status, just say they're doubled, our average order value goes from like $150 online for a customer. But if we can get them on the phone and talk to them, that goes up to like 330, lifetime value is tripled with customers that we can get onto the phone. We do sell a technical product. So there is a good bit to learn about beta glucan, setting expectations and dosage and all those things. So if you get those right, the product is so good and it works that customers stay on it for life. I mean, we have just literally hundreds, if not thousands of customers that have been with us 10, 15 years, still taking the product.
Reggie Black: So the product itself is phenomenal. It inherently is very sticky, but there is some education on that to make sure that customers have all that information. We certainly have that information on our website, but most people don't like to read. They're like, "Oh, somebody told me to buy this or I've heard this one's good, and this one checks out." So they buy the product and they'll go online and they may not stay on us as long as somebody that we can get on the phone and really educate. Then they see that, "Hey, we're U.S. company and we are shipping, and here's the reason why we do this, and here's the stuff behind the product." We just build that relationship with them. So there's trust and people stay on it.
Chase Alderton: And you also have an added benefit, there's a lot of these new D2C companies that are popping up and they're maybe a year, maybe two years old, when you ran for 22 years, you have the opportunity to have a lot longer of a lifetime value because just purely your lifetime was longer. Added benefit there. So Reggie, I know you're the number one rated supplement company on Trustpilot, what are some of the things you do inside the company to contribute to that culture?
Reggie Black: Yeah, thanks. That's something that I'm really proud of, love to talk about. We've got thousands of five star reviews on Trustpilot. The crazy thing is that we actually didn't even start collecting reviews until like three years ago. So I've been in business 21 years. I didn't even start because there's a lot of issues in the supplement world, like FDA concerns and regulations. So even with customer reviews, if they start writing in about the product and what it did, we can't publish those on our website.
Reggie Black: So, it wasn't until we discovered Trustpilot that we figured that we were able to take down our best reviews, which is kind of crazy. Right? It's so opposite of being like, "Hey, this is actually an FDA violation, we're not allowed published this." And we were able to only publish those that were in good standing on the website. So Trustpilot gave us the ability to do that. So, I love that part of it, but I also think about all the time like, "Man, if we would have been collecting reviews for the last 21 years, we would have so many more than the 3000 that we have now." But it is a huge part of our company.
Reggie Black: I mean, we literally like up on the walls in the office, we have printed out reviews from the customers and in our customer service office, they have a review that specifically a customer wrote in and mentioned their names. Their name's big up there, and it was like, "I had an incredible experience with Michelle and she's the best." So they see that on the walls, but even like the in corner office really is like Trustpilot reviews that have come in, which we love, and [crosstalk 00:15:13]
Chase Alderton: There are those like daily or monthly, whatever it is. How do you get those reviews across to everyone?
Reggie Black: Yeah. So a couple of different ways, because those are ... For us, it's like oxygen, that's just pouring gas into the machine for all of us to stay motivated to do this, and it's like, "Oh, that's why we do it. That's why we do it." Customers call and they're like, "You guys are the best customer service I've ever experienced." So, daily, we have a standup meeting every morning at 10:45, and the very first thing we do is what we call wild stories. Like, "Hey, our goal is to make the customer go, wow." This is a great experience. So, every single day there'll be several wild stories from the day before that we'll all share with each other and be like, "Hey, I talked to this person or this person wrote in and said this, this person had this experience."
Reggie Black: There's never a day that goes by that we don't have just these incredible, amazing experiences that get everybody fired up and relate to it. We actually took that wild story moment from the Ritz-Carlton. I think when you think of great customer experience, one of the first companies that pops in is like Ritz-Carlton, who'd trained Mercedes, trained Chick-fil-A, trained all these really good brands. So a couple of years ago actually took our team to a leadership conference by the Ritz-Carlton. So we were trained by their team on how they do stuff and got to see some of the inside, so we implemented a lot of those things into the business. And one of those is just sharing those customer stories every single day.
Reggie Black: They also push into slack. So as soon as the review comes in, everybody's seeing it inside of slack, and then we do rewards and stuff based off of if their names get mentioned or different things that we turn into a fun and encouraging game for all of our team.
Chase Alderton: I love the recognition piece. You may end up running out of time on those stand-ups at some point, because you got too many of those story moments.
Reggie Black: [crosstalk 00:17:08]
Chase Alderton: I wanted to get into this idea of scalability non scalability. You mentioned that right at the top when you were talking about customer service, what in your customer service approach and in your company's approach is scalable? How does that translate to things? Because I know that you could just hire a bunch of phone support people and have them sit on phones all day. That is kind of scalable, but what's the model for scalability first and we'll do non scalability after this.
Reggie Black: Sure. So, some of the things that we've built for scalability, our training program, when we hire a new customers support person, they go through an automated system that we're using, a combination of like Confluence and Trello and everything to onboard them and train them on the product. Since we really focus on beta glucan quicker. That piece is scalable. We use a lot of automations and triggers and flows with Zendesk. We run Zendesk through the phone, as well as all our customer support tickets.
Reggie Black: So we use a lot of that stuff, we trigger things like after 30 days, if somebody signed up for a subscription, we call every single person that signs up for a subscription after a certain amount of time, customer support just gets automated flow and they get a ticket, "Hey, call this person." When stuff drops off, our customer support team can call them, like, if somebody hasn't ordered in a certain amount of time and has multiple orders. There's a lot of workflows and things that we've built in here using those systems that is scalable, we're using recharge SMS as well for our subscription program, which is great because people can literally just text automatically one to bump it back to cancel or move it or something like that, which is awesome.
Reggie Black: We use ARPU for our emails that we automatically send out to people a couple of days before they renew, so they can add stuff to their cart, or they can bump back their subscription a few days if they have extra product and things like that. There's a lot of tech that we've put in the middle that can scale to infinite amounts.
Chase Alderton: Now let's go to the arguably the fun one. These are the ones that I like to talk about, the unscalability piece of this, because I think this is where companies tend to fall off the map a little bit. Everybody's trying to scale, everyone's trying to automate in less costs, more value, all that kind of stuff. How do you keep track of the unscalable things and how do you continue to scale the unscalable things while also not putting so much time and spending so many resources on whatever's unscalable?
Reggie Black: Yeah. There's definitely some unscalable things that we do, and usually those are a lot harder to measure, in my opinion. The direct value of like, I could just log in and see how many people have bumped back their subscription using our SMS, but we do things like, if we call a customer or if somebody's sick or if someone's dog passed away, I mean, our customer service team will write them a card and send it to their house. That's unscalable. Right? But we do things like that because we legitimately care about that. Like customer, we take notes on everybody's order, and when they're calling in and they're telling us things about their family, their daughter, or their cat, their dog, whatever, that's all documented inside of Zendesk.
Reggie Black: So, the next customer service rep on the call has that context. Those are things. I mentioned earlier, everybody that signs up for subscription, we call them and make sure that they're on the right dosage. They understand the product, they know who we are. A lot of times people will come and be like, "Oh my doctor." That happens all the time. "My doctor just told me to get this." The doctor may have told them to get three or four things, and they just forget what they even bought. That's somebody that's prime to probably cancel the product in the subscription in a couple of months.
Reggie Black: But if we can reach out and talk to them and have that personal touch and explain to them what this is for dah, dah, dah, dah, then we can really extend the customer lifetime value and make that turn right better. Those are things that are unscalable, but we personally love doing them and it's making a huge difference in our frequency.
Chase Alderton: So the word that you're describing, the philosophy that you're describing, we haven't really touched on is, just retention, which is such a key for subscription brands and really any juicy brand. But retention is obviously so much huge, somewhat bigger for subscription because you can acquire customers one or two or three or four a month over month, as long as you want, but the lifetime value is what you're really looking at. Being able to extend them an extra month, I think your example of having a doctor prescribe it, and then just buying one is absolutely spot on for this field and this vertical, like how many times do you get a doctor's note and you can barely understand what they're even writing?
Chase Alderton: So they go buy one of them and then you take the pills for a month and you're done. That's prime for like, "Let's make sure you understand this, let's make sure you're on this for the health benefits and not just for buying this and trying to extend our AOV for one month."
Reggie Black: Exactly.
Chase Alderton: Yeah. Super cool. Love to hear that. Other thing I wanted to touch on here is headless. I know you just launched a new headless site on Recharge. Can you talk through the logistics? Why did you decide that? What are some of the benefits you're looking to get out of that?
Reggie Black: Yeah, so we're really, really excited. I think we're t-minus one week away from launching, it's been about a five month project going headless on Shopify. We had talked about it last year, going headless, it's expensive. Usually a lot of agencies we looked at were wanting to charge absurd amounts of money to build something. It's one of those things that's a buzzword, that a lot of people are throwing around and it's still kind of new. So people are doing it different ways and there's not standardization for it yet, but we looked at it. We decided like, "Okay, not yet, but this year Google made some really big changes to their algorithm. They're looking mobile-first now and indexing the sites. Mobile-first, and then PageSpeed is just becoming more and more and more of a factor.
Reggie Black: So, rumor on the street is that, by this time next year, Google is going to be mobile only, not even looking at desktop sites, their factor. So, mobile experience is a huge deal. And speed really plays into that as a huge deal. So those were two of the main reasons that we decided to go. And we're like, "All right, we're going to do it this year, and we're going to go ahead looking at analytics when we started to see our organic traffic drop in the last five or six months, and we lost like 75% of our organic traffic, which is just crazy.
Chase Alderton: Wow.
Reggie Black: And you look in our search console and you look in analytics and it's very clear. It's like, "Hey, the mobile experience and the PageSpeed. And so, building stuff on top of Shopify, I love Shopify, is so good at so many things, but they're editor in building pages on this, it's terrible. Looking for another platform where we can really decouple front end and backend and have complete control over the front end experience and not manage that in Shopify, using Shopify for the backend and the 3PL and all the things that it does exceptionally well. We just like, "This is the way to go, and we really need to focus on that speed."
Chase Alderton: I should get a buzzer every time I have a conversation with someone, that any time someone says decoupled, I can just hit it and have some confetti come through or whatever [crosstalk 00:24:43]
Reggie Black: That's the buzz word.
Chase Alderton: Yeah. The buzzword among headless is decoupled. That's always meditating on see who says that.
Reggie Black: I think I picked that up, I'm sure from talking to 10 developers about it.
Chase Alderton: That sounds about right. Chat on your website. I know isn't the thing. Is that something that plays into your headless decision or is that just something you've always had, you just want to double down on?
Reggie Black: That's something that we've had for a long time. That's also a part of our Zendesk integration. Yeah, I mean, people love to chat in, it's kind of the in-between, you've got your people that are the online shoppers that want to just do everything themselves. Don't want to talk to anybody. Then you have people that ... typically the older demographic that loves to call in and talk with our team and talk to somebody to answer everything. Then you kind of ... that in-between this, like, "I don't ever want to call and talk to somebody on the phone, but I'll chat with them, because it's just like, while I'm at work or while I'm doing something else, I can just text and ask my question."
Reggie Black: "Hey, is this the right product for dah, dah, dah? Or where's my order or something like that?" So we do a lot, our same customer service team obviously manages all of those chats and we do a lot, a lot through there. It's great for answering just like really quick questions that people have.
Chase Alderton: Do you find that the chat is more of middle to bottom of the funnel? I think you explained it really well. The people who just want to come in and buy stuff. They're not going to chat. The certain demographic wants to just take the phone calls, but the ones who chat are usually pretty bought in, they just have some clarity question or dosage or whatever it is. They're like that middle bottom of funnel.
Reggie Black: I think you nailed it with that. Yeah. Yeah. They just have one or two reservations or sittings that they just want to make sure of before they pull the trigger.
Chase Alderton: The final push over the hump is all they need to get going.
Reggie Black: Yeah. And chat's a great way to just meet people where they're at and what they're comfortable with and get them that quick question answered so that they can make that decision.
Chase Alderton: And then how about social media? I know that social media goes hand in hand with support and with this customer service idea, what's your approach there?
Reggie Black: Yeah, so we do heavy, heavy on Facebook, would not only just ads, but with a ton of customer support their Facebook. That nicely integrates into Zendesk. So everything's coming in through there, but we get a lot of people on Facebook that are responding to our ad or responding to a post that we put out. They'll just ask questions or they'll make a comment on something. And so, our team stays on those and it's real active on Facebook to make sure we get questions that people have answered through there or that anything that's maybe posted by somebody else that's inaccurate, that we can make sure that we go in there and correct that.
Reggie Black: I can't tell you how many companies I see on Facebook that people are commenting and talking about stuff or asking questions. It just never gets responded to because even if it's in like comments of something that the company never jumps in and responds to, and I'm like, "Man, not only that one person that you could have converted into a sale, but then hundreds of other people co-pack through there and see those comments. Right?" And they're like, "Oh, this company is active. They're responding, and they care."
Chase Alderton: Now we start to come full circle talking through community again, that's another great way to build your community. It takes a lot off of you. A lot of your support team is monitoring social channels now and monitoring Facebook instead of just living on Zendesk. But some of those comments that come through, like you said, hundreds if not thousands of people are seeing your answers to those comments and questions, and everyone's going to have the same questions at some point.
Reggie Black: Yes. Yeah.
Chase Alderton: All right, Reggie, moving to rapid fire questions. You're ready for the finale?
Reggie Black: Yes. I'm ready. Let's do it.
Chase Alderton: All right. What is a piece of advice you'd offer to a brand who's just starting out and trying to get off the ground and start their growth?
Reggie Black: Oh man. If you're just starting out with your brand, especially if you're going to go subscription, I would say you definitely need to treat your subscribers like they're VIP, no matter what they're subscribing to, but in the beginning, man, get as much information as you can and feedback from your customers, whether that's jumping on the phone with them or surveys. Here in the beginning, you may not have as many customers. You can jump on the phone with a lot of those customers, right, or email them, or hit them up on social media and get information flowing back and forth.
Reggie Black: So you can learn from those beginning customers as you develop your product, but treat them like absolute VIP, give them first access to everything, because a lot of times those are going to be your champions. Those are people that are looking for the product that you have, and you're going to learn a ton about your offer from them. If you treat them that way, naturally they're probably going to go out and tell other people as well, but you're really going to learn and tweak through stuff.
Reggie Black: One of the exercises that I love to do is, in any brand that's just starting off, I think should put a lot of consideration into this. If you had to 10X your price of your product tomorrow, so if you sold a $40 product and you were like, it's going to be 400 tomorrow, what would you do differently to sell people and persuade them on why it's worth $400?
Chase Alderton: [crosstalk 00:29:59]
Reggie Black: And if you can do that and you can think through that and be like, "What would make this worth $400? What other things do we need to add in there? Is it something that we need to add in addition?" Think through the packaging, what's that experience like when they opened that up, like that entire process of what would make this thing worth 10 times the value, and you can add a lot of those things to your normal price, and you've got something really special.
Chase Alderton: That's a really good one. I've never heard this 10X price theory. That's really, really good.
Reggie Black: It's something that'll really mess with your head sometimes too. You're like, "Ah." Especially once you get used to selling on a certain price, you're like, "Nobody would ever pay that much." And then you're like, "But if it was, how would we still sell people? Like how could I convince somebody to buy my product for 500, 600, $700 rather than 50 or 60 bucks?"
Chase Alderton: Totally. One of the other interesting things you mentioned was treating your customers like the VIPs, treating your subscribers like the VIPs. I think a lot of times what people assume is that, customers will either come in and take one of two roads, they'll either be one-time buyers forever, or they'll jump right into a subscription and stick on a subscription forever. There's a large amount of people, me included, a lot of times for subscribers, you'll buy the product once or twice or three or four times before you finally pivot over and do a subscription.
Chase Alderton: So, having that extra touch at that extra level, and like you said, getting on a phone people, just maybe not very scalable for every brand, but that's something that could actually increase average order value and move you over to the subscription side, and all of a sudden lifetime value goes way up.
Reggie Black: Yeah. That's a great point. I think sometimes it's hard for entrepreneurs and business owners to split, to decouple our business owner self from our consumer self and realize like, "Oh, well, it's my brand. Either people are going to go do this, this in your own business, but you realize like, the way that I consume things is, I'll probably try it a few times before I subscribe to this thing." There's tremendous opportunity with your first-time buyers to go convert them back to subscription.
Chase Alderton: Yep. Quick side story at a previous company, I would always have my parents or friends or family who are less technical than I am, run through checkouts or run through UI/UX builds or whatever it ends up being, because you always think when you sit down, "Okay, they're either going to do this. They're going to do this, but there's 10 different ways that they could get from point A to B." It's always interesting to see what real customers will do on a site rather than just what you think.
Reggie Black: Yeah. Yeah. It's so true and there's a lot of great websites you can go and you do user testing and watch people and pay, pay for people to go through your stuff and watch. It is wild to be like, "No, no, no. Why are you clicking there? What are you doing?" Then after you see like four people go over there and click on it, you're like, "Okay, what did I do wrong?" I had a user testing class actually in school and we used to sit in a room like a police interrogation with a window and then have people in the other room going through our stuff and you're watching them.
Reggie Black: Then there's a camera filming them, and it was always the case where you're like, "Why would anybody use this thing like that?" And then you realize a bunch of people are using it or this is like what people do. So it's funny to release your stuff to the wild and figure out that not everybody thinks like you.
Chase Alderton: It's design error in the first place, it's not user error. We're doing a terrible job at this rapid fire thing, which is okay, because I think there's some really good content here, but let's flip the script. So let's say a brand is already established, they're growing, they're hitting a point where they're plateauing a little bit, what's a couple piece of advice you could give to maybe get over those plateaus, get up to more subscribers, higher LTV, higher average order value?
Reggie Black: Yeah, that's a good point. So I think at that point where you really start to scale or want to scale your plateaus, you need to be thinking about some integrations. Few years in Recharge, there are some ... Obviously, it integrates with Klaviyo, you need to be thinking about segmenting those people out, figuring out where those people are dropping off or why they're dropping off, looking at SMS.
Reggie Black: I think just making it super simple with some of that technology, for people to push back their subscription, or pause it or skip one or change it to another date, add something, take away something, that really, really helps with that LTV for customers. Because I think about a lot of the times, like if you have a 1000 subscribers, it's a lot cheaper usually to get to double the frequency or the retention than it is to go get another 1000 subscribers.
Reggie Black: So if you can extend somebody from three months to six months, that's usually easier and cheaper than going out and adding an additional 1000 subs. Then when you do go out and add those additional 1000 subs, you've doubled your money when you do. So thinking about it in those two perspectives, if you scaled and you've hit a plateau, that's advertising or a traffic, inbound plateau, then you may want to sit down and focus really on extending out the LTV or the frequency, then also looking at AOV recommending upsells, an increase in the AOV, those are all three ways that you can really scale your recurring revenue without even looking at more traffic.
Reggie Black: I think putting some of those integrations to work and helping people where they're at ... Another huge thing for our businesses referrals, if you have a product that you're selling, that people aren't getting in, telling other people about, I think you have to sit down and really have a hard conversation yourself about like, "Does my product suck, because why are people not telling other people?" So there are some great ways and integrations with Recharge where you can immediately integrate, refer a friend and they get discounts and you get discounts, lots of things that you can do there to encourage those referrals, which are great.
Reggie Black: But those are typically the best and the cheapest customers you're ever going to get. So really focusing on that referral thing, and again, if customers aren't referring, then there's probably something broken in that customer experience or the product.
Chase Alderton: You said my favorite thing in there, which is, essentially retention is more important than acquisition. To be clear, neither doubling your customers average lifetime span, or going out and doubling your subscriber base, neither of those are easy to do, but I'm such a huge advocate that your subscribers are your subscribers for a reason, and doubling down on them, if you didn't acquire a single customer, maybe this is another good one. Maybe your 10X price rule is another good one. If you never acquired another customer in your company's lifespan, how could you continue to make revenue? It's doubling down on your existing subscribers, how do you make sure they stick around and keep buying month after month?
Reggie Black: That's a great one. I think also about like, if you could only sell to one more customer, what would you give that customer experience? Like in the history you're like, "Okay, the rest of my business has to be grown off of this one customer and I can only do that." What would you do for them? What would the experience be like in the back? How would you reach out to them to be like, "My entire future, my business banks on this person going out and referring people, how would you treat them?
Chase Alderton: I love that. I love that. We're going to do a second podcast of all of these theoretical questions to be asking everyone on how to build your business [crosstalk 00:37:42]
Reggie Black: They're great to talk about in a podcast. And then you get back to the office and it's like, emails and fires and all this stuff. And then you're like, "I dream about one day really being able to put the time into thinking through all these things." But I do think about them at night sometimes, or in the shower or something, you start thinking through all these theoretical things that you're like, "This is the true way to grow your business."
Chase Alderton: Love it. Last question for you. What do you subscribe to?
Reggie Black: Physical products.
Chase Alderton: Sure. Other than the Netflix and the Hulus and all that, everyone's got all those. What are physical products you're subscribed to?
Reggie Black: Yeah. Look at my software subscriptions for 400 different things. Personally, man, it's tough for me to answer this question because there's a lot of stuff I subscribed to, just to hack their funnels and see how they're treating their subscribers. I pick up stuff all the time. I'm like, "Oh, that's a really cool experience. That's a really cool one." And I'm always looking at their tech stack and like, "Are they on Recharge [inaudible 00:38:42] So a lot of times I'm looking for ways that they're doing so we can improve on our side to borrow, ethically borrow those ideas from them. But I subscribed to ... That I use toilet paper, the who gives a crap brand.
Chase Alderton: [inaudible 00:39:01]
Reggie Black: The Bamboo toilet paper. That's a good one, Native deodorant. They were one of the first brands that I was like, "Man, their whole checkout experience and their subscription experience and all that stuff." And I knew they were using Recharge [inaudible 00:39:17] it was really well done. Then I tried the product and just have been on it for years. Great product.
Reggie Black: Then I subscribed to a brand called MyGreenFills, which is a non-toxic laundry detergent. And so they send you actually a powder every month and you pour that into a jug and put water and mix it up. So you save the world because you only use one jug and you also just have like really good for you much better without all the toxic chemical laundry detergent delivered to your door. Those are some of them.
Chase Alderton: Awesome. Reggie, thank you so much for joining us. Love the episode. Pleasure to have you.
Reggie Black: Awesome. Thank you so much for having me.
Chase Alderton: We'd like to thank Reggie once again for joining us. If you're interested in Better Way Health, you can head over to betterwayhealth.com. If you're looking for more of our episodes, check us out at rechargepayments.com/hitsubscribe, and to get the latest episodes, remember to hit subscribe on whatever platform you're listening from.