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Ben Parr, Cofounder & President at Octane AI

Personalizing commerce: Humanizing with custom experiences

This episode we're talking to Ben Parr, Cofounder and President of Octane AI. We focus on conversational commerce, or humanized commerce, and why brands should shift their thinking for a better approach to acquisition. We also chat about the structure most customer experiences should have from the landing page to personalized product suggestions all the way through the checkout.

Connect with Ben on LinkedIn or Twitter. Check out Octane AI. Get his book, Captivology.

Episode transcript

Chase: Ben, thank you for joining us.

Ben: Thank you for having me.

Chase: So today's going to be an awesome episode. I can't wait to talk about all things conversational commerce, why we're moving away from this transactional model and more towards conversational model, but first and foremost, Ben Parr, please introduce yourself. Tell us about Octane a little bit.

Ben: So, hey everyone. I'm Ben. I am the president and co-founder of Octane AI. We are the buyer profile platform for Shopify in the world of e-commerce. We power conversational quizzes that you can put on your site. So if you want to go and build a quiz, we power Facebook Messenger, we power SMS marketing and on-site popups for thousands of Shopify and Shopify Plus brands. And before that I was the co-editor and editor-at-large of Washable, and I wrote a best selling book called Volcanology on the science and psychology of attention.

Chase: We're going to get into all of those things, especially with an emphasis on attention, that's really exciting. So let's hop right in conversational commerce, define it for us.

Ben: So conversational commerce is, I actually want to almost use a different term, which is humanized commerce, which is most commerce online is like a one way kind of thing. So, I like to talk about it as you're either typically browsing for something, you're like, "I'm browsing the warehouse for anything." Or I'm searching for one particular thing. But in retail, there is a really core element, which is the human element. That's the concierge, that's the person at the store, that's the associate, they're asking you questions, they're giving you guidance, they give you confidence to purchase, they're talking with you. But that hasn't really existed as an equivalent in e-commerce I think until conversational commerce in this place recently, right? Rather than here's a one-way email blast, you can have a back and forth conversation over messaging or have a back and forth conversation on the site through a quiz. So it's really just that back and forth and a humanizing element. So it's almost like humanized commerce is what I to think about it as. We're making commerce online, and this is the trend, overall more human.

Chase: Love it. Humanized commerce, conversational commerce, they kind of both go hand in hand, but the definition definitely makes sense across the board. So why is this, I know you kind of touched on it already, there's that kind of human aspect of it, but why is this more valuable than say a transactional commerce? Traditional commerce you want to sell as many products as you can to as many people as you can, why is conversational commerce, humanized commerce, why is that a better model?

Ben: So it's super simple, no one wants to be sold to all the time. No one wants to be seen as a transaction. People are humans, they want to have relationships, they want to build relationships. But you can build a relationship, not just with your next door neighbor or your friend at work or your significant other, but you can build a relationship with a brand or a representation of a brand just as deeply in a lot of ways. There are people who are deeply, deeply loyal to a brand, and this is also why they then do subscription because they've come deeply loyal. They want to go and have more of those conversations. They become a real fan of the product. Then they become an advocate. Then they become a regular customer. But this only happens because they feel some sense of community or some sense of loyalty or some sense of love like that. So it's as simple as no one wants to be a transaction or feel like a transaction.

Chase: I love the words you're using too, the loyalty, the love, it's things that you don't really think about when you start a business or when you're selling products as a sales team but those are really the things that potentially keep your customers around way longer. What are some examples of some companies that are doing this well?

Ben: So, it's interesting. So there's a whole bunch of things that we've learned over the last couple of months with our new shop quiz and having these conversations with a lot of brands, and I've been on the phone with a lot more brands than I think I've ever been in my entire life. So, a couple examples, one is Doe Lashes, which does fun, kind of... they're doing eye lash and that kind of thing. But they are building a fun sense of community with their customers, they're learning more about them. The one thing they've recently learned through their quiz is that most of their customers are first-time buyers. And now they're like "Wait, we need to really invest in education." Educating them on what they could be looking for, why they may want to do it or not want to do it, which is something you need to do that if you don't know that kind of information.

There's another brand, Rooted.NYC, which sells amazing plants. And they're just building a community around just plant lovers, plant groups, all that sort of thing. It's also just, complete side note, just crazy when you go to plant Facebook groups, they are super detailed and obsessed, and really in love. There's like

Chase: They feel like family. When you buy a plant, it's something you have to take care of.

Ben: Yeah. There's a mutual customer of ours that I think we both talk about a lot, azoxy. Like the relationship with their Facebook group around jeopardy snacks, and there's that tribe that you're building. So I think that all of these best brands are building some kind of community, some kind of tribe, the real humanized relationship with their customers, learn more about the customers then you can personalize that experience. Because if I am 18 and I have oily skin, I don't want to be shown a bunch of products for people who are in their 30s and have dry skin. My needs are very different, I would love to have the brand, have a conversation with me so they can recommend the right things.

Chase: So I think that's an awesome transition into our next step. So let's dive into these quizzes. So I know that that Octane just released a brand new shoppable quiz. It's out live on the Shopify app store, you can go grab that. Why is it that a quiz is so valuable beyond what you may kind of seem as the obvious? So traditional commerce again, is kind of saying that the less clicks to check out the better. The less friction, the less time someone can spend browsing is less chance to have to actually drop off or fail. So why is it that adding in more clicks all of a sudden is a better way to do commerce? That doesn't actually mathematically make sense.

Ben: But it does mathematically make sense when you look at the numbers, the conversion rate is so much higher, the more questions you ask, the deeper the quiz goes. Because you're building a relationship, because by the end of a quiz, you can take one of these quizzes, by the end of it, you will actually get the thing that you are looking for, right? You don't know what plants you want. I'm going to ask a bunch of questions about my location, about what kind of feeling I want, and then I'm going to actually get the thing I was actually looking for, that I may not have even known. And so a couple more clicks actually gets you to the product that you're actually looking for and wanting to know.

Again, it's about the humanizing of that relationship. It is the quiz is the equivalent of the concierge in the store asking questions, giving you confidence, learning more, and then personalizing things afterwards. Now you could send a targeted, like a follow-up Facebook message based on which buyer profile you're in, to have something more personalized, right?

Again, 18 and oily, I know that, so I have resources for you because you probably have acne versus you're 30 and dry skin, you might have a different condition. Or removing things from my suggestions, because I know you have a specific allergy. These are feel small and simple things, but it actually shows a deep level of relationship building and personalization. That's I think the strongest part of bringing on a quiz, you have customers, they don't exactly know what they want, or they're just looking for a little bit of guidance. They, most of them have probably been shopping in stores until this year when the e-commerce audience has doubled. And you have to remember the vast majority of people, this is the first time they've ever done e-commerce really. And so they're looking for that equivalent experience. You need to deliver that for them, that humanized, suggestion, that concierge.

Chase: Plates is a really interesting suggestion and a really interesting point because I'm personally a terrible plant parent. You walk around, you think Oh, I love this style of plant, I love what it looks like.

Ben: We have all those plants behind you.

Chase: I don't want to... Yeah. I know. I... we've replaced these multiple times. Is that the secret, if you look at the videos of over and over these podcasts, you'll see they change because we accidentally keep killing them. But I think that's a great point for the quizzes. Maybe asking, "Where are you putting this plant?" Because some plants do really well in low sunlight or high sunlight or how much water you're doing. Things like that will really sway what you're going to do. Last time I went into a store, I was thought I was looking for something. The woman's sold, told us that this is a low water, low light, low touch plant, which is exactly what we wanted. And we kind of shifted our buyer behavior. So instead of saying, I know this is the one I want, she guided us in that right direction. She was the personal part of that, that online quiz and led us to exactly what we want. That's actually sitting right over there and it's doing fantastic. So it's an interesting balance.

Ben: It's just like again, it depends like, you and the industry and your relationship with customers for beauty brands. It's a no brainer. They've all been adopted quizzes forever, but it'd been really hard to go and build these things. The shopable quiz makes it easy to do that. You know what questions you need to ask? It's understanding the skin types, skin tones, allergies. For other kinds of brands. There's one mass and labs. They have a quiz where they're asking about your tastes in terms of photography, it's a photography store. And so they're asking about what kind of lighting and things, but they're just actually showing you a bunch of pictures like, "Which one do you gravitate towards the most?" And they can actually suggest a filter packages, suggest other things to you based on tastes. This is something that you really couldn't have done before, it again, really personalize the experience because I don't know what filter pack I want, but you do because you're the experts at this, please guide me.

Chase: Where is the balance between too many questions or too much personalization versus just letting everyone browse the site. So I think we've established, there's definitely value in guiding people in the right direction. Is there a point where you want to recommend one finite, infinite, or I'm sorry, one finite product that, this is the only one you want, or is it more to just kind of guide people and say maybe take a look at these handful of products.

Ben: It, again, it really depends. I hate saying that, but it does depend on the brand, products, things, right? For a lot of our brands they actually do turn it into a bundle and be like, get this bundle because this is what you need for an Am and PM skincare routine. Add it to the bundle, go get your monthly subscription for it, so that you can consistently have it. Great, awesome, super amazing.

Others, you have to ask a lot of questions to really understand the preferences of photography or plants or certain things. More questions do make sense. For others maybe it's as something as simple as I just needed to know flavor, I need to know type of drink and I need to know costs. Great, fine, awesome. It really depends. You just got to play around with it, right? You could AB test this kind of thing, see how people engage better and you just have to kind of know your customer and you learn more from your customer so much more by having these quizzes, by just literally ask him the questions that you've been wanting to ask for forever. What are you interested in, who are you shopping for? They want to tell you so.

Chase: So dig a little bit deeper into that kind of buyer profile you're referencing here. So why is it so important to continue to monitor what people are asking for over time throughout the course of this whole buyer journey? What value does that serve other than the obvious Hey, I want this color, this size, whatever.

Ben: So the buyer profile is the... some of the information that you have on the individual customer. Which is a little bit different than the buyer persona, which is kind of the overall art painting of that customer group. So this buyer profile is filled with key information, right? It's their past purchase information, understanding their habits from the past, but more important than that is understanding their future behavior. What are they looking for currently? Which is where our quiz can be super helpful. And there's other data points that you can go and bring in to build this profile. But the reason you build this profile, is to build a more humanized, more personalized experience for the customer, rather than blasting them with 10 emails for 10 different sales. You, they, you know that they're only interested in maybe one out of those 10 things.

So don't send them the other nine things. That's not going to help you at all. That's only going to turn them off from buying the one thing they would actually buy. That's what the personalization does, right? It personalizes that communication that you have with them. And that makes for a better shopping experience, because, I think we all strive to build a better shopping experience for the end consumer. But definitely some of the products and some of the things don't enable that, or do the opposite of that because we're in pursuit of sales. I think something especially the quiz, is perfectly aligned, both with a better experience for the end customer and something that really drives a lot of sales and a lot of new opt-ins for the store. It's that perfect mix that not a lot of products and not a lot of things actually have.

Chase: Awesome, awesome, very well said. So let us put this all together. We're talking about a couple of theories. We're talking about a few different pieces of this buyer journey, talking about a quiz, talking about a buyer persona, landing pages, checkout flows, things that. So give us an example of kind of, what a customer may do from the time they maybe hit a landing page until the time they check out. Why, where are these customer data points and how do they kind of flow throughout the whole process?

Ben: So there's many let's just I guess scenario, right? There's a... You have a customer come to the site. Maybe they come organically or maybe they come through a Facebook messenger ad or whatever kind of ad you're running. They, you have a set of products, they don't know wish to buy your homepage has take our style quiz or our beauty quiz or whatever it is. Now you're asking a set of questions, helping them determine what they actually need, right? Skin makeup, how they are, whatever's really important to actually determining a real recommendation in the same way you would do in the store. Then you have the recommendation. Maybe you recommend a set of products that go together. Well, they add those things probably worth more than what they would have done without the quiz. This is what we've seen all the time.

And then make that purchase because now they have that tailored recommended set. But the journey doesn't really end there because, now you can send really personalized followups because you've taken the time to actually collect this data, right? And so those follow ups may be something as simple as a Facebook message, with the shipping and the receipt orders or an SMS message with the same. But it may also be educational follow-up. Being we have a lot of our customers who are in your, have tight skin or have oily skin find a lot of value because of X of this product or X and Y or pairing this kind of thing. We can offer an additional discount if you're interested in it. That's super targeted. That's super personalized. That's for a better experience.

And then over time too, they have you have your next sale instead of one email blast. It's a segmented into, to 10 different segments based on these buyer profiles that you've built, which again, not just higher conversions, but just frankly, a better experience for the end customer. You're actually talking to what their needs are and what they're looking for. And then maybe the circle eventually comes, they come back, there's a new quiz or they are looking for something else. Now they're looking for their mom or they have different skin conditions. And then the cycle happens again because people change over time.

Chase: There is so much info there. We could talk for an hour and a half about this stuff. So I think one of the other benefits that's often not talked about here is the future of your product. So if you take something a skincare line, per se, let's say you go through all these quizzes, you seal the buyer profiles, let's say you run your analytics. And you can tell that 80% of people buying from our site are buying the oily skin product to make your skin less oily. You don't need to really design products that are going to do all types of other skin. Maybe that's your specialty now. You really lean into that type of thing. And it's something you wouldn't have known without this quizzing, without an understanding where people are going or what they're looking for. And all those kinds of things.

Ben: The insights are actually probably more important even than the conversions, in some ways. Beauty bias and other example of a brand that we work with came up with a case study. They actually found that there was a specific vertical, people who were really concerned about fine lines and wrinkles were spending a lot more money and had a lot more concerns than they ever knew. And now they know that they can develop new products around that or new campaigns around that because it's an audience that's really that they didn't really know about before. Or I said before, in the case of Joe Lasha, they didn't really know that most of their audience was newbies. And so now they can adjust their marketing and adjust their education to benefit the customer. Because why say advanced, give advanced tactics if 90, 50 or 70% of your audience is beginners, right? Even if you could just segment it between beginners and experts of your product or of that journey, you're going to have not just a better experience and a higher conversion rate. It's a win.

Chase: Let's add a subscriptions' lens into this. So a lot of what you were talking about is targeting and making sure you're hitting the right people. But the big one that stands out is education for me. And you mentioned it at the front and kind of throughout this whole scenario as well. So when you talk about subscriptions, obviously lifetime value is the big one that everyone's trying to focus on. It's kind of a combination of a lot of different factors. Depends how people define it. But when you talk about education, it's something that may not drive direct dollars towards your bottom line. But if you have a person buying a single product and then you can deliver education piece after education piece and tell them how to use it, what to buy next, if you like this, here's your next step? How does that continue to play into this growth of LTV without actually adding dollars?

Ben: So well depending on the quiz, some people ready to do subscription, you offer that in the quiz, on the side, that sort of thing. But a lot of people they need to build that relationship with the brand. Again, it's relationship building, it's humanizing. And so education is non salesy, but it's providing real value to the customer and building a relationship. I'm learning from you. You're teaching me things that maybe, I didn't know before, maybe you're sending me videos for some things I can do with my hair or with my fashion or something that I care about. And so over time then, learning things. But now also, because you've learned more about the customer, more about their preferences, the things you might suggest eventually for subscription will be much more targeted because you, instead of just blankets.

So it's suggesting, you should have these, this entire set of things for your beauty routine. You can suggest I know that you have these conditions, so these are the two that you should definitely be doing every single month. And here's why, and here's what the results look, and I can offer that discounts this is the subscription that's for you. You can personalize those things. And you don't because you did the quiz, you can give it's almost a delayed result that you can give a couple of days, weeks, months later, but you wouldn't have been able to do it, if you didn't ask the questions in the first place.

Chase: It goes back to the whole value of subscriptions in the first place is you're not trying to shove products down people's throats. You're trying to deliver convenience. They're trying to make sure that people are getting what they want on their timeframe and you don't know that stuff. If you can't quiz them and you can't ask them and you can't build this relationship with them, you're spot on. So, let me ask one final question for you. Something we ask all of our guests, what are you subscribed to?

Ben: I mentioned buxus before I am subscribed to get my buxus

Chase: Danny, we love him. Everyone subscribes to is great.

Ben: I mean, I made crazy, crazy, all the crazy journey things. I've started adding more things. I have a couple of a beauty items that I started, I creams a couple of things. So I'm getting older, I'm thinking a little bit about my skin. there's some, there's some hair things, a subscription. There's not as much hair up here as there used to be. what's interesting, as I think about it is there's a lot of things that you're subscribed to that you're not even thinking Oh, it's subscription, right? Cause maybe it's your medication or something that subscription. You may not be thinking about that, but that is subscription. And so there's actually more and more things. I will say I've been on the move the entire year. It gets harder to do subscription going in the same place and yet I still have a bunch of triptans going to my central mailbox and things that I'm picking up. And then there's a bunch more, I'm going to be turning back on. I will give a stupid specific one Fiji water. They make a deal and then just send it.

Thanks, just keep sending me my water please. And then can be more of a boxes so I can have some more snacks to in combination.

Chase: Snacks and water. It's something everyone needs the basic necessities. Cool. Thank you so much, Ben, for joining us really appreciate it.

Ben: Thank you for having me.

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