Gift Biz Unwrapped Guest, episode number 391 Recurring billing. So you've got the credit card tokenized and you're gonna hang it at a defined date in the future for another order without the customer having to do anything. Attention, Gifters, Bakers, crafters and Makers pursuing your dream can be fun. Whether you have an established business or looking to start one now you are in the right place. This is Gift Biz Unwrapped, helping you turn your skill into a flourishing business.
Join us for an episode packed full of invaluable guidance, resources, and the support you need to grow your gift biz. Here is your host Gift Biz gal Sue Moon Height. Well, hello and happy autumn from the Gift Biz Headquarters in northern Illinois. I'm in the best mood because this is such a glorious time of the year. It's brisk outside. The leaves are turning to shades of mustard, paprika, and sage. And the stage is being set for Halloween and Thanksgiving.
That's one thing I love about living here. Things are always changing with one season, winding down and the next, making it entrance in all its glory with the seasons. I know what to expect during these transitions. Not completely, but overall, I know what fall, winter, spring, and summer will bring.
Wouldn't it be nice if you could be more predictable with your business too, especially in terms of sales, Then your projections wouldn't be hopeful guesses, but more targeted thought through numbers based on a plan getting you to this point is what we're talking about today. Specifically how to set up your systems to build in repeat business. That way it's less left up to chance if a customer will ever buy from you again.
You're more in control and accordingly, your sales are more predictable and can multiply just like a snowball growing and growing as it rolls down the hill. All right, enough with the analogies, let's get into the details of how you can make this happen in your business Today. It's my pleasure to introduce you to Brandon Aroso. Brandon is the founder and CEO of Electric, a company that scales brands with profitable eCommerce models built from innovative proprietary methods.
Today we're gonna talk about subscription models. Brandon will share with us his experience with the difference between subscription and non-subscription brands, how to get people to join and what companies often get wrong with loyalty programs. Brandon's the perfect person to hear from for this topic because he focuses on strategies that increase customer lifetime value by creating best in class consumer experiences, which can be naturally built into the subscription model.
Brandon, welcome to the Gift Biz Unwrapped podcast. Thank you for having me. I'm so excited to talk everything subscription and subscription boxes, this is gonna be amazing. But before we dive in, I have a traditional question I'd like to ask you. If you were to describe yourself through a motivational candle, help us envision what that would look like by color and a quote or a mantra or saying something like that.
I think it would have to be a red candle, just because that's been historically my favorite color. And then I'd probably go with, I'd rather regret the things I've done than regret the things I haven't done. Love it. Yeah. So often we'll just put off taking action or doing something because we're afraid of what the result might be and then we either never, ever do it and continually talk about, Oh, someday. Someday. Yep. Or never even get into it at all ever, I guess I'd say.
Right? Yeah. That's how I feel about most things. I guess the regret or the what if around what if I had done this is worse I think, than going for whatever it was and then it potentially not panning out. Cause at least you went for it. Yeah. Because what if it does pan out? Yeah, well that's even better. You'll never know unless you take the chance, right? Yeah. So I think a lot of people who are listening can relate to that and I think it's human nature, like everyone goes through that.
Oh my gosh, well what if this doesn't work out? I'm gonna put myself out there. Am I gonna be embarrassed? Is my ego gonna take a hit? Anything like that. But I do kind of feel, I mean you're a little younger than me Brandon, but in this environment and this world now people are taking those chances and it's much more acceptable if you will now. So the culture's just kind of gravitated to a point where, Go for it. A lot of people are so why not you?
Yeah, I think that's been one of the interesting things we've seen over the last five years is more and more people just going for it, whatever it may be, a lot more entrepreneurs than ever before.
And I think part of that is to do with just the internet and the rise of just knowledge that is easily accessible to everyone and more and more sort of influential people, whether it's on social media, whatever it may be, are showing that there's a different way to like have a career and it's really picked up a lot of traction. Yeah, agree with you.
Well give us a little backstory over and above what I talked about in your intro of how you've gotten into the specialty that you have with electric. Yeah, so I started working for Direct to Consumer Wine Company my sophomore year of high school. It's like a social media intern. Got to wear a bunch of different hats, jump around. They were a startup. They were only about five or six people at the time that I started.
I actually took a gap year in between high school and college to work there full time. I was like a marketing associate before I ended up going to USC out in LA and about a year into USC I decided to leave that company and take everything that I've learned there and start to freelance primarily for businesses in and around the LA area that were artisan like craft makers.
Usually one to two person companies doing anywhere from a hundred thousand dollars a year in revenue to at the absolute highest end, like a million dollars in revenue. And I found all of them at Renegade Craft Fairs, which are, I think they're like a nationwide organization at this point, but they're like little popups that are two or three day events where 40, 50, even a hundred artisans and makers will come to showcase their product.
There's like airplanes, there's unique t-shirt shops, there's candles, the whole gamut. And they almost all were on Shopify and they made really cool products but they didn't really have a strong grasp on what to do when it came to anything e-commerce, which made sense because they were really good at making their product. They also weren't digital marketing experts. So I worked for them for free or super cheap to build out a bunch of reviews and case studies.
Fortunately got it to a point where I was able to hire one full-time employee just before graduating back in May of 2019 and then moved into dinky little office in Chinatown in LA with no natural light and no windows. So that was fun. Worked in that for about nine months before I moved down to San Diego, which is where we experienced a lot of our growth. Say we had our first really like big jump up as a company from about five to 12 people in 2020 I wanna say.
And I always forget if the pandemic started in 2020 or 2021. Like time is sort of a vacuum. Yeah, it was 2020. It was 2020. Yeah. Okay. Yeah, so we were at about nine or 10 team members when that happened and I had no idea what was going to happen. None of us did actually back Then it was definitely a little freaked out. But I actually moved down to San Diego about two months after like the pandemic started and started to focus in on hiring team members in and around that area.
Got the team to about like 25 just through referrals and through building out a network in San Diego. And then from there in 2021 we had to sort of pivot our strategy and focus entirely on retention marketing because when we first started I was like still learning and trying to do a whole lot of everything. But once we were able to hone in on this was like our true core competency that unlocked a lot of growth for us.
So we ended last year with about 40 team members and then we actually got acquired in April of this year by a software company. Very cool. This so falls in line with what I think a lot of people experience who are listening here because many, many makers start with something like Renegade Craft shows,
right? Yep. So it might be a local show that they have, might be a church bizarre, you know, just to get their feet wet with this whole idea of making a product and then selling it and going through all the processes, et cetera. And what I found as we got shut down at home, there were so many makers who didn't have an online presence, just like what you're talking about.
And up until this point, many were successful without it because they were doing shows every single weekend and the only way they were selling was face to face but never getting what you're talking about here. These repeat sales and continuity with these customers that they worked so hard to create and then it was kind of one and done.
Yeah. And I think there's a unique opportunity though in having that in-person presence and now going back into doing these shows, they'll be better off because they understand that they can nurture this relationship with this customer beyond just that one time purchase when they were there physically and they can put them into their email and SMS list and start to communicate with them for years down the road to help increase lifetime value versus just transaction at the event.
I hundred percent agree with you, but I think this is a timeframe when we're really at risk because it's so easy to go back to what you used to know, thinking like this was a hiccup in time, it'll never happen again and jump back into what's always been comfortable versus now taking the approach of let's use these things together to make the business even stronger. You know, you can still be at the show attracting new people, seeing past customers just for re deepening relationships.
But then also what about those people who can't come back to a show for whatever reason they've moved away, who knows what the number of reasons are, but why not continue to be able to get business from them, which is exactly what you are talking about and you're specializing in. And honestly most people don't look at it, they're always looking for the next new person. I mean look at how our behavior is on social media.
We're always wanting more followers and well what about the ones you have, you know, serving and working with the people that you already have? So I think this is gonna be super value in terms of conversation as we continue forward here. But I do have another question for you. So those 40 people that you were talking about that you were building with the team, what were they doing? What were those people doing that you were hiring in?
Yes, we had about 10, well I'd say about eight or nine developers. So like front end, primarily Shopify developers. We had, or we still have, cuz this is still operating, we have two designers. So IU X designers, we had about a team of 12 email and SMS specialists who also sort of doubled as retention marketing experts.
And then we had a team of about four client success managers, had some SEO and content people, had a few social media people and then myself a salesperson, sort of like an executive assistant and that was basically the full suite of our team. Okay. Did you or do you specialize in Shopify site and then the whole experience around that? Yeah, exactly. So basically, okay, getting that first purchase, once that purchase happens, everything from there really falls in our purview.
We do a little bit on like the onsite optimization to get that first purchase to happen and increasing aob, but we're not doing any like paid acquisition campaigns or Facebook ads or anything like that focusing entirely on customer experience and retention and Okay. Only for businesses that are on Shopify. Okay, perfect. Well Shopify is my platform of choice. Anyone who's listening knows that I say that all the time. So we're right in alignment there.
But let's move on to the topic at hand, which is subscription boxes. Obviously it falls right into play with my audience. I call my audience Gifters Bakers, crafters and Makers. And the thing that's so great about our products is many of them can be repurchase over and over again. Either they're candles that burn that need to be replaced or beauty products or jewelry because as a woman, let's face it, none of us can have enough jewelry.
You might not know that Brandon, but you know, we can't or we can use 'em for gifts. Like there's so many different types of things where subscription boxes could really aid in at least a portion of our customers coming back over and over again. So let's start off I guess maybe with the difference between what you see with customers that run subscriptions of some sort and then those who don't. Got it. So the difference between the stores that have subscription programs versus those that don't.
Yeah. And when you say subscription programs, let's start there and define what that is for everyone so we know we're on the same level playing field here. Yeah, so I mean there's typically two types. There's websites where you go to it and you'll see the subscribe and save sort of widget on each product page. So similar to like Amazon or Chewy, if you have a pet you will get like five to 20% off if you sign up for auto delivery of whatever that order is that you're putting in your basket.
And then second is companies that are even more subscription focused where they have like a whole subscription flow either through like a quiz or you're building your own subscription box bundle or they have like special curated sort of kits that you can subscribe to or you think of like a book of the month club or something or a Coffee of the Month Club. Those are typically the two subscription programs that we're working with.
Okay. So and we also, I mean I've seen and talked with some customers here who will do things like you return your bottle to us and will refill it and send it out. So that kind of a creative thing too. So you could almost say subscriptions are anything that is encouraging and using an automated next purchase. Yeah, recurring billing. So you've got the credit card tokenized and you're gonna ping it at a defined date in the future for another order without the customer having to do anything.
Yeah that's understood between both of you and you can just take it and go from there with it, et cetera. And so is that what you describe as the difference, you know, the one time off sales versus the recurring billing or would you say there's more to that? Yeah, I mean the one time sales are better in particular use cases and I actually like to use like one time sales as a funnel into subscription programs.
I'm not a big proponent of, and you see it on some websites where they force you into subscription for that first order and they'll give you some crazy percentage off like 40% off your first order. But only if it's a subscription. To me as a consumer it's like how am I going to subscribe to something if I've never even tried it before?
Like I don't even know if I'm gonna like it and it's like a nice like marketing gimmick or tactic but we haven't necessarily seen it pan out in terms of retention and ltv. Cause the other thing to keep in mind is that as soon as somebody cancels a subscription, you're more likely to have lost that customer forever than somebody who makes a one-time purchase and then you reengage with them in like 90 days or 120 days.
There's this like consumer mindset where you cancel that subscription, you're almost like canceling your relationship with that brand. You know, I can't even believe how relevant this is because just this morning, this is no joke, just this morning there's something that I've been wanting to purchase and I decided, Sue, it can be a birthday present for you. And now my birthday's until December, mind you.
But I'm thinking early and it's a beauty product, it's a product that you buy and then there are refillable cartridges if you will that you have to buy to use the product, but they don't even allow you to just buy it one time to try it. It's only subscription And I'm like well first off I wanna try it second, I don't even know which one I want long term and maybe I wanna use different types of parts to it, not just one. So how can this even be a subscription? And you know what?
I did exactly what you said. I'm like all right, I don't even know that I like this and I bounced off where they would've already had my purchase but because they were forcing me into that subscription, I'm on hold. I'm not saying I'm not, but I'm on pause for the time being.
What do you think just in terms of based on what you've seen offering both because for my example that I just told you about, if they would've let me do a subscription, maybe I would have, but now they didn't even get my first purchase because they didn't give me the option. I know this with Chewy you can just buy one single or you can buy the subscription either way.
Yeah, I think you wanna provide that optionality because not everybody wants to be on a subscription and you also don't want to make it so extreme where you feel like you're getting ripped off if you're not on the subscription. So like for example, I think Chewy is only 5% off if you auto save. So it's like a nice to have but it's not moving the needle in the sense that people are gonna feel uncomfortable making a one time purchase because they're missing out on a 40% off discount on that order.
Right. And it's a great funnel into getting people to subscribe. I mean part of having a customer is building trust. And so if you're able to make that purchase experience positive and you're email and SMS communications thereafter and then your marketing materials, you can start to layer in the benefits of the subscription program in a way that's not as obtrusive and sort of like in your face. Well and I think it also depends on the product.
Like for me, I am a Chewy subscriber, we just got a new dog recently, so happy for that. Oh that's exciting. But once I know how much food will go through each month, I'm going to be on a subscription, not because of the price savings, but because then I don't have to go in and reorder it all the time, I just always know that it's gonna show up. So for me it's more convenience than even cost savings.
Yeah. I am also subscribed to Chewy and part of the reason why I don't cancel it is because it's so easy to manage it, which is another thing that we've been sort of combating over the last five years. Cuz historically like the subscription programs were inordinately complex to get out of because the thought was, oh, if you can't cancel then we're gonna make more money off of you.
But in fact all the data that we see shows the more people are engaging with their subscription, even if it's skipping in order or changing the date or whatever it may be, it ends up that they get more shipments over the course of their lifetime and they have a higher lifetime value than those who do not interact and engage with the program. So the thought process that you should make it very difficult to cancel or manage is not supported by the data.
It kind of, I'm thinking to follow what you were just saying, it's kind of like if you have a subscription you make it hard to cancel. It's kind of like we're trying to trick you into having to keep going with us where really you want them to want it so much to your point that they're gonna add on. And here I'm gonna use myself as another, I didn't realize I had so many subscription things until we start talking but I also use Hello Fresh. Yeah and hello Fresh.
So we get our meals, you know, two or three times a week but they also have the add-ons now. And this has happened over time. So like now I'll sometimes order some extra things for breakfast or a dessert thing for my husband or and I'm building on even though I already have the subscription to your point Exactly Brandon, I'm going in there adjusting things and then adding things on. So my purchases are more then if it, they would've made it so hard to change anything.
So you've brought up some really good definitions and I'm filling in some examples from my own life. So wonderful. Okay. So the difference is really the one offs. I like the idea of offering one time first and then coming back with the repeat purchase. And I think it really depends on how a business is set up, certainly what the product is that they're offering cetera. But something for us to think about certainly.
And if you do just the one time for the first one, do you make reference to the fact that there'll be an option moving forward to have automated purchases or Typically in those cases it's just a product page where you can either do a one time purchase or toggle to subscribe and save and so the, it's not like we're not allowing them the option of subscribing if they don't want to. There's not really any mention of it until you get through the transactional communications.
And then on like on your order tracking page that we send you to, cuz we don't use the standard Shopify order tracking pages, we'll use custom order tracking pages so that we can include marketing messaging in there custom like branded content because usually like 15 to 20% of a brand's website traffic will be to those order tracking pages.
So if you're just sending them to your standard Shopify order tracking pages where all it's showing is where the order is, you're missing out on a ton of touchpoints with that customer. So we'll layer in all of the subscription messaging into those transactional tracking pages for the one shot customers. If you're a subscription customer, the transactional journey looks different because you're already a subscriber.
So our goal with you is referrals is other things then then getting you into subscription program. But sticking only in the Shopify platform, I'm assuming that there's some apps that you can upload if you wanted repetitive repeat purchasing subscriptions. Yeah, if you're looking to get started with a subscription program on Shopify, I mean Recharge is far and away the predominant player in the space but I think it's something like 80% of subscription programs are being run on their platform.
But you also have some interesting up and comers like ski o protection subscribe that are worth potentially taking a look at as well depending on your business' use cases. Okay. And we've talked a little bit I think about getting people to join, but what else would you say with that? The best subscription programs we've seen are ones that are more than just percentage off.
So there should be some other value associated with being a subscriber than just getting a little bit of money off on every order. Whether it's exclusive content, early access to things, there's a bunch of different ways that you can think about it and put that into effect and then make sure that you're communicating those value props all the way throughout the customer journey. Like free shipping for all subscription customers is a good one that we typically see as well.
If you were to forecast then your upcoming revenue, you can do that because a certain number are subscription customers already. Yes you are gonna have some fall off but you put that into your numbers as well, you're able to have a much better projection of future revenue than if you were just one off all the time. Yeah, exactly. We talk a lot here about the value of email marketing and talking about some of the things that you're already saying.
Like what I'll say to people is no one wants to join another newsletter. Everyone knows what's gonna happen when you join a newsletter. You're gonna get emails and the emails are most likely gonna be selling you something and you know you need something bigger than that.
Just to your point about subscriptions, you need something bigger and some of the things I'll say with emails is they join an exclusive group so they get first looks or they get promotions that are only for that group or similar things to what you are talking about about joining a subscription list or a group. Do you then communicate with your subscribers differently than the rest of a list that you have, which are maybe other types of customers? Is that your recommendation?
So typically we're using SMS as the channel for exclusive like access and content. Cuz SMS has much higher engagement rates, the click rates are through the roof compared to email. But you can't treat it the same as email though because it's much more personal form of communication and people will unsubscribe very quickly if you start abusing it.
In terms of like segments of customers though typically have like your active subscription customers and then you have like your regular customers, we like to split 'em out by like recency frequency and monetary value.
So recency being like when's the last time that they purchased frequency being like how often are they purchasing specifically both for subscription customers and one time customers because subscription typically gonna be on a cadence like oh they're getting product every month, every three months or every six months, whatever it is, one shot, customers are a little bit more all over the place, maybe they're ordering every 30 days and then all of a sudden it's 120 days.
And then from a monetary standpoint really looking at like their lifetime value and trying to bucket people into hey this is like a VIP customer they've ordered 10 times and spent a thousand dollars on our brand. Maybe we should be communicating with them differently than somebody who's only purchased one time.
But you'd be shocked at how much time is spent on trying to convert people who don't care about the brand and have just been sitting on your list forever versus how much time and attention is paid to your top five or top 10% customers who clearly are fanatics of the brand and there's not a communication strategy in place to make them feel special or to get them to start referring their friends or to get them to spend more because that's where,
I mean it's basically free additional revenue sitting out there for you and They're the ones who are proving that they're gonna buy from you over and over and over. Yeah. So why not go back to Them? And that's one of the first places I like to start with brands. It's like look at, look you have a thousand customers who've ordered from you 10 times or more and you haven't done anything differently for them than the rest of the group.
Imagine if you were treating them with any sort of level of differentiation, how much better these results would look like and how much more loyal they'd be to your brand. And that's usually very low hanging fruit. I guess it's not as sexy or exciting to keep your existing customers spending more versus acquiring new customers.
But I think that narrative is changing more and more as brands and investors start to look with increasing specificity around ltv, returning customer rate and and some of these other things versus just looking at customer acquisition cost and those first orders coming in. Can you share with us one or two really creative ways that you're using this more specialty communication and extra things for the top tier customers? You'll hear Brandon's answer to this question right after a short
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For more information go to the ribbon print company.com. Yeah, so there's apps that you can use that can help enable some of this stuff. But typically I like to start with just using clavio to bucket out into different segments and then having associated like rewards for these groups. So if you think of like Uber Eats, they have a great sort of tiered system. I don't remember what the names are exactly, but I think it's like gold platinum diamond or something.
And it's very straightforward, it's just based off of how much you've spent and then automatically you unlock rewards based off of your spend threshold for that given year. Those are the most powerful in my opinion because you're not putting anything additional on the customer.
Like a lot of points based loyalty programs that you'll see on Shopify stores, it requires the customer to then go like take their points, figure out what they're worth, go to a page where they need to redeem 'em, then they need to log into their subscription portal so that they'll or take that new code and drop it in. Like there's so much friction that they're not actually using it. Like we typically see two to 3% adoption rate of those points based loyalty programs.
So I much prefer, hey, if you've spent 250 to $500, you're gonna get 10% off automatically on every order. If you've spent $500 to a thousand dollars, you're gonna get 15% off automatically on every order. You don't even need to do anything.
And then you can start to sprinkle in really fun surprise and delight stuff like on the fifth order maybe you include a free gift in the customer's order without telling them and then they just get it in their package and that's a really like strong customer moment to take place Or it shows up on the checkout page. Yeah, choose one of these three gifts on us because you've reached this level or things like that.
Exactly. And when you have that, make sure you are communicating from the get go what happens when they reach these different levels. Because let's say you make your first purchase in those transactional communications that you're gonna be getting the order confirmed, order shipped, order out in transit order delivered, all of those should make reference to like, Hey John, you've spent $120 this far, look what happens when you make order number two.
Or look what happens when you pass this certain spend threshold. Look at like all these exciting things that you have to look forward to. Okay, I like that. All right, so again to make sure everyone's on the same page with us, Clavio is an email marketing platform. Many of you I know are on MailChimp, Clavio would be a step up and it allows you to do more of the things that Brandon's talking about.
So you might have heard that, I'll put it in the show notes, but I just wanted you to be able to be with us as we keep going here. And so I'm thinking Brandon, to be able to do those types of things where it tracks by customer how many points they've acquired, how close they are to the next tier, et cetera. That also would be another app or is that something that's InView? So you can do it in Clavio automatically and okay, the way you can do that is by just creating segments in Clavio.
So let's say you wanted to just say we have two tiers, we have 200 to $500 spent and then we have 500 to a thousand. You can just create a segment in clavio of customers that have spent more than $200 but less than 500. And then as soon as they enter into that segment, you can automatically trigger an email that goes to them letting them know hey this is your new status and this is what you can expect. You can also even assign Shopify tags to those customers leveraging Shopify flow.
So Shopify flow is, Shopify is like automated, it's basically like an automation platform in Shopify. So we can tell that system, hey any customer that's spent 200 to $500 give them this customer tag, I don't know VIP one. And then for the next group we can say VIP two and then have these discounts or rewards or whatever may be automatically take place based off of that customer tag you can use. There are apps as well.
There's probably four to five strong like loyalty programs that are point based. I'm just not a huge proponent of the point system because of how diluted it is. Like you go on half the Shopify stores I go on, they have a point based rewards program and they're all sort of just kind of thrown up there and there's not a real like strategy behind how they're going to make the customer experience better or how they're gonna get customers to use it.
And a hundred points on one website might be worth a dollar on another website it might be worth a hundred dollars. So it's very hard for customers to equate what sort of value they're even getting from these rewards programs. Yeah. What equals one point, It's all over the board. Exactly. For Different programs. Yeah. Yeah. And in clavia, I mean you can have automatic discount codes get generated that are unique for each customer.
So there's like very simple ways that you could start to create these personalized experiences for your customers. Yeah And listen, as you guys are hearing us talking, I don't want you to get overwhelmed by like all these options and all these apps and different things that you could do and then say this is too confusing, it wouldn't be for me. I want you to understand the theory and the strategy behind it first and see if it applies to your business.
And then you start layering in the tech because it's so easy for us Brandon to say Ah, this is so overwhelming, this is too much for me. When really the opportunity and the value could be so great for a business they have someone help like you come in and help them get it all set up or they figure it out with their IT person or whichever way I want you to be understanding the strategy and the intention behind these things. Not necessarily worrying about how does it all get done.
I want you to be thinking about what this could do for your business. All right. So let's move into, unless you, did you have anything else you wanted to say about initiating people? I was just gonna like start slow and make sure that you can actually follow through on whatever program you want to roll out. Like it'd be better to start slow than go download 40 different apps and not really have a plan around how you're going to leverage any of them.
Because there's, I've seen plenty of stores where they try to and get all the bells and whistles or try to get a loyalty program, referral program, all these other different types of apps and then all of them are being done half baked at best and you'd be better off like focusing on a few key things to roll out, making sure that you have the resources to support it. So walk before run. Excellent point for sure.
Cause when we do something like that then we say none of it works when really we are the ones who didn't do it right. Yes. You know they work, we just haven't incorporated it properly into our businesses. Exactly. And Speaking of doing it right, share with me some mistakes. The things we need to make sure to avoid. This was the first one, right? Go slow, start off slow, make sure you're integrating it in properly. What else from there?
I mean I think when it comes to anything check and like double check it again, especially when you're doing anything in LAO for email marketing or SMS marketing. Ensure that your flows are set up properly and excluding the people that need to be excluded and including the ones that should be there.
I can't tell you how many accounts I logged into where there are flows and people are getting communications that they should not be getting either because the exclusion criteria set up incorrectly for the flow or because the actual segment itself was not built correctly. So make sure that you're double checking those because you don't want subscription customers getting one time customer messaging or vice versa.
Or you don't want subscription customers to be getting messaging to go sign up for a subscription when they're already a subscription customer. Like one example of that is we were an auditing account and they had a win back flow. So like after 90 days you would get an email with the 20% off discount code to come back and purchase. But they weren't excluding active subscription customers from that flow.
And so customers who were on a subscription but their subscription cadence was once every four months or once every six months we're getting these emails and it was a substantial amount of them. And aside from the fact that you're giving out free money, it's also just extremely confusing messaging cuz you're sending an email saying like Hey we want you back but you as a customer, like what do you mean I'm plate literally an active subscription customer of yours.
Right? So it's very important that you make sure that you're buttoned up when it comes to that. Yeah, for sure. I mean we try and do that on our end with, I'm gonna talk about the gift biz side cuz that's less product than my other businesses.
But when we ever change any funnels or any flows or something has to connect differently or whatever, whatever, we'll watch individual purchases coming in and actually physically watch them go down the right funnels just to make sure that everyone's going in the right way. But to your point, don't just think because it looks like it's working cuz you're seeing numbers that it's working correctly.
Yeah. Another thing is in Clavio and a lot of these email tools, if you email your subscription customers and they open it, which most of them will or they click the email but they don't actually purchase but they have a subscription order that's coming up in the next three days, five days and that falls within your attribution window in the
platform. Then like let's say I have a subscription to a brand, I get an email from them, I open it but I don't actually do anything and their attribution window is five day view and my subscription order goes out three days later. That email campaign is going to get the subscription revenue attributed to it even though that subscription order was already going to go out the door.
So the analytics can get messy with any of these platforms really like that's just one specific example when it comes to cement marketing. But if you added up the ROI of all of your Shopify apps, your store would be doing three or four times more revenue than it actually is doing because every app loves to take credit for the sale. Of course they do. So just make sure you have one analytics tool that's the source of truth for everything.
Even if it's a little bit off, it doesn't matter just because that's consistently what you're using to gauge performance and And get your benchmarks. Yeah. Because gosh, if you're running your next moves off of your analytics and your analytics is wrong, that can get you down way bad pathway cuz you're not working with real life real things, real numbers. Yeah. So yeah for sure. What else should we be watching out for In terms of
mistakes? Some of these aren't mistakes, it's more just like missed opportunities. Especially for smaller businesses that are growing, like take the time to make that first order experience really strong. That is the most important because every order, it's like order number one to order number two, there's gonna be some drop off order number two to order number three, there's gonna be some drop off. This is just natural.
So the higher the percentage of customers that go from order number one to order number two, the higher the rest of the graph looks because let's say you're losing 5% on every order. If you're starting at a 75% reorder rate from order number one to order number two, it just makes everything look that much better. So with that first order you can include like a handwritten note or something to that customer.
It takes five seconds and if you're not shipping a hundred thousand orders out a month, it's completely doable. Right? So little things like that and if you are a larger company and you work with a three pl, then you can do things where you put different inserts in the packaging based off of the customer. So if it's a one shot customer first order, include an insert that is specific to them.
If it's a subscription customer and it's their first subscription order, include an insert that reinforces the value of the subscription program that they just signed up for. As well as reminding them here's all the ways that you can manage it and like you are in control as a customer. So there's a bunch of opportunity with making that first purchase a really exceptional experience.
I think what you just said, this very last one is a really strong point that most people don't do is reinforcing that they made a really good decision on doing a subscription. You know just you know, kind of like pat on the back. Yeah. Buyer's remorse is a real thing. Yeah. Even if it's something little because we might not want to continue or we think we're not gonna wanna renew.
Which does bring up another question as a subscription gets to its end, let's say it's a six month subscription or annual subscription, I'm assuming then you should be ramping up the value of the subscription and doing something for them to resubscribe If they cancel. Well if let's say it's just a six month, you know, if it's not just into, what's the word? Perpetuity Into perpetuity. Yeah. You know if it is. Cuz a lot of things are, you know, renew every six months, renew every year.
And I'm thinking that's a strategy also. You're not doing this forever, you're not gonna forget about it. You're gonna go six months or know whatever it is. Then you start ramping up communications and talking about the value of the subscription as you're getting close to that time when they would need to re-do or resubscribe I guess I should say. Got it. Yeah that makes sense. A lot of times I see that in like prepaid gift
subscriptions. Yes You like maybe I'm gifted a subscription from somebody and I have six months of it, but then there's an opportunity for the brand now to convert me into the purchaser versus just a consumer and knowing when that date is coming, like hey, in a month your prepaid gift is gonna run out. Do you want to go in and become a subscriber and add your own credit card information?
That's one pretty specific use case where it makes a lot of sense to hammer on all the values and all the benefits and make sure that that customer or that recipient rather turns into a paying customer. Yeah, that's a great one cuz they're already having the experience right now. They just need to continue the experience from their pocketbook, not someone else's. Yeah, exactly. Yeah, I love this.
I mean I think just the idea of not fighting so hard and spending so much money for a first time customer over and over and over and over again, but getting people to do repeat sales and second sales is one thing, but where they lock in a subscription is even better for a business to try and implement in terms of thinking of how to do it, what would make sense for your company and then getting it in play because then you can focus your efforts elsewhere while
these sales are coming in and you're filling these sales with the rest of the people on your team. Right? So it just makes all the sense in the world to me. So if someone, just real quickly, I wasn't planning on putting this in here, but I think it'll be really valuable for our listeners three first steps if they're thinking about doing something like this very generic because we have so many different types of products here.
Yeah. But what would be the first things to consider if what we've been talking about is resonating and but they're still like, Yeah, but what do I Do for a subscription program? Yeah, So I mean first you're going to want to find the app that you wanna leverage. I mean without the subscription app you won't be able to do subscriptions.
So put together some of your requirements for what you want the subscription program to be able to do and then schedule a call with the top three or four service providers that you find on the Shopify app store. So that's really step one. Okay. Once you have the app in place.
And the reason why I put the app first is because they can help you with best practices and they can help you with strategy and how you should be thinking about rolling it out to your customer base because you're gonna need some sort of strategy for how are you converting some of your existing customers into subscription customers and then how is it being represented on the website now to like net new site visitors. And Brandon, just a question here really quickly.
You could start using this at any point in your business. So if someone is just starting out, that's kind of easy cuz it's right off the bat. But if someone's been in business for a long time, there are ways of transitioning customers and data that they have. Well I mean some of your customers will continue to be one shot customers, but you can send out an email to people letting them know, hey, like now we have a subscription program, we notice you've ordered from us 10 times in the past.
This should be a great way for you to now be a subscription customer cuz you're gonna get X, Y, and Z benefits. Like do you wanna sign up? If so, click this link. Okay, so potential for everybody if you're interested in doing this program potential for, Okay, so what's the third one Then? So step three would be integrating it with the rest of your tech stack. So let's say you use Recharge for example.
You're gonna want to integrate it with your play video account for your email and SMS marketing. You're going to want to integrate it with like your customer service environment, whatever that may be. Make sure that you set up like all the integrations and understand what they unlock for you in terms of features and functionality. Cuz that's really one of the bigger differentiators amongst all the apps now is like how well they play with the rest of your tech stack.
Because in order to create these customer experiences, if you have disjointed systems that don't talk to one another, it's extremely difficult. Yeah, and I don't know this at all, but is it true then that the hardest part is just getting it all put together and then of course there's maintenance. It's not like you said it and forget it, you wanna use it and enhance it and all of that.
But some of this sounds a little bit more complicated, but I think as you said, start simple, but once you get it in play, you're gonna see the value of it working for you and then you can add more and there are people out there to help you do this, right? Yeah, there's no shortage of Shopify partners. There's companies like ourselves that are much larger at this point in Shopify Plus certified.
And really, if you're a smaller business and you wanted to work with like a company like ours, I would look at it more as a one time like strategic engagement project where we would just give you a brain dump and sort of a roadmap of this is what you should go and do or you'd go the other route just because like working with us on a monthly basis would be cost prohibited and it wouldn't make sense at that stage for the business.
The other route would be finding someone like me from four years ago or or five years ago, like a more scrappy freelancer. Not like, you obviously have to be careful because there's just like a lot of freelancers in the marketplace, some who are really strong and some who aren't. I mean the same could be said for agencies as well. And then have them help support you as well. So there's thousands of Shopify partners though.
I mean it's the largest eCommerce ecosystem, both in terms of the apps, but also in terms of the service partners and providers for it. Where do you find Shopify service partners and providers? There's a directory on Shopify's website. Okay. And then really, I mean the way that I learned any of this stuff for the most part was just like YouTube and then trying to do it myself. So there's always the YouTube avenue as well, which can get you quite a bit of the way there. Yeah. All right.
So I like something that you just said here. So I just wanna clarify. You were saying that electric offers the opportunity, if you wanna do like a one time strategy call, maybe that's what you'd call it, Would you just provide direction? Did I hear this correctly? Yeah, Either a strategy call or like a one time, like we'll put together a deck of recommendations. I mean either then you could pay us to implement them or you could implement it yourself.
But I think the biggest, most value you could get out of a company like ours, if you are a smaller business, is just unlocking all the knowledge and information we have from working with a hundred plus Shopify brands over the last four years on enabling all these things. And so we know these are the apps that you should be using, these are the things that you should look out for if you're in this industry, maybe think about this, Here are some other examples that we've done in the past.
So there's just a lot of assumed industry knowledge there that would be good to get just like a dump of. But you can ascertain a lot of that from like the resources and content that we're publishing anyways, or all the YouTube videos, stuff like that. So really just depends on how much of a white glove approach you want versus rolling up your sleeves and figuring out some of this stuff yourself. Right? Yeah. Both approaches. Yeah. Can't be an expert in everything though. You can't.
I mean, No. No, you can't. We're not experts at making candles. Right. But we can tell people how to sell them, right? How about that? Yep, that's true. So, alright, so where would we go and find out more information about electric and the resources and all of that that you have to offer? Yeah, so you could either go to electric marketing.com, it's just electric with the queue at the end, marketing.com. And then it's also my website, brandon amarosa.com.
I do a weekly newsletter with a lot of this information and resource guides and PDFs and examples, videos, stuff like that. So either one works LinkedIn as well. We're pretty active on there too. Okay, wonderful. Well, I'm gonna put both of those websites in the show notes as well as social media platform site, the links that you gave me for that too.
So anyone who is out and about and isn't able to catch that now, just access the show notes and you'll be able to see everything sitting there ready for you to click and then go investigate. Brandon, thank you so much. I really appreciate your time today. Some really interesting points that give us some cause for thought, you know, and hopefully implementation to make our businesses stronger. Appreciate all of your experience and your advice that you've given today. Thank you.
Thank you for having me on. Remember Brandon's candle quote about not having any regrets, considering things that you haven't done. I can assure you that you won't regret thinking about and incorporating a subscription element into your selling plan. The level of sophistication can be your call, but the concept of setting up and offering a regular automated purchasing program will serve you well. That's a guarantee.
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