Bonus: How Klaviyo’s CPO Thinks DTC Brands Should Build Customer Relationships in 2025 - DTC Podcast

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[00:00]
Andrew Bielecki
What I actually fell in love with about Klaviyo is we're a data company. And I don't think I fully even appreciated that until I joined E.D. and A.B. started the company as a data company with sort of like this marketing capability is like a first step. And so it really fits well this idea of B2C CRM. When you think about us being the nucleus for data and decision making, what's the difference between providing service to a customer before they transact and marketing, they sort of converge right? At the end of the day, loyalty is one of the more underappreciated and maybe underd things in the commerce space today. There's a tremendous opportunity in loyalty. And I think if you actually look at we are relatively customer obsessed at Klaviyo, we think a lot about driving impact for our customer community. So one of the headline metrics that we look at internally is.
[00:54]
Adil
Adil. Welcome to the very first in person DTC podcast.
[00:59]
Andrew Bielecki
I'm super excited. I'm honored to both, like, be doing the podcast and also to be like, the first to do it, you know, face to face.
[01:06]
Adil
We're here in the saloon, the Klaviyo Saloon, here at Shop Talk, which is my first shop talk. Have you been to a Shop Talk before?
[01:12]
Andrew Bielecki
You know, I have, but like years ago because I sort of had this like, you know, early part of my journey in commerce. And so there was coming to Shop Talk not long, you know, after it started as a conference and then it's. I've taken a, like a hiatus. So this is my first time back. I'm pretty excited. I'm actually, like, kind of surprised. It's like, still going and it's the, you know, it's like, it's still like the, from what I can tell, preeminent sort of conference. So it's great.
[01:34]
Adil
It's amazing. Love Vegas. Love being here in Vegas. But I wanted to start a little bit with your journey. You mentioned your, you know, starting in E commerce. I also saw that you were a pro gamer at some point, so I want to ask about that. But talk to me about your journey in E commerce and kind of what led you to being the CPO at Klaviyo.
[01:50]
Andrew Bielecki
Oh, man. Okay. So my journey in E commerce starts a long time ago. Me and a couple very close friends back in graduate school. So this is graduate school at Carnegie Mellon and this was 2005. We were, you know, I was sort of like an entrepreneurial kid, right? Very technical as a youth. And so I had never had any Interest in like getting a real job. I didn't even know how to necessarily get a real job or like what that meant. So I sort of went to both college and graduate school with the intent of like, hey, I'm going to start a company. And there was another person like me in grad school at Carnegie Mellon and we were sort of thinking about what we were going to do. We were plotting and scheming very technically, like, okay, how are we going to like go, you know, start some really interesting business. His then girlfriend, you know, now wife, was like, while we were doing all this brainstorming, was quietly shipping product out of her dorm room. Okay. At this little company called Modcloth.
[02:45]
Adil
Oh.
[02:46]
Andrew Bielecki
And she was working on, you know, sort of like she was going thrifting to these like, you know, thrift and estate sales and buying like one of a kind pieces and selling them online. And meanwhile, Eric and I are sort of. This is Susan, our other co founder. And meanwhile, Eric and I are thinking about how to take over the world. And so at some point we realized like, hey, ModCloth is the real business we should be focused on. And so we decided to take a run at that. This was back in 2005 and we sort of went for it. I was co founder and cto and I had a husband and wife team as my two founders, which is like a very interesting experience. We're still like family today. But anyway, that was sort of like how I got into, you know, commerce to start with. And Modcloth was a. It was a pretty fast ramp. I mean, we raised a million dollars in 2006. I left the company at end of 2011, beginning of 2012, and we're doing more than 100 million at top line. And it was, it was. And that was like a long time ago in commerce years, you know, so.
[03:36]
Adil
Like really long time. When I hear early days, I think like 2015, 2016. This is like a decade before then.
[03:41]
Andrew Bielecki
Yeah. So that was my first sort of foray into the space and it stuck with me. I ended up doing a couple other e commerce businesses that were venture backed. When I left, the third one, which was like modestly sized was called Fox Commerce, which was sort of like an upmarket. This is like before Shopify plus.
[03:54]
Adil
Okay.
[03:55]
Andrew Bielecki
Had Shopify not come up market, it probably would have been a much different outcome, that business. But you know, they did and we said, okay, this is not going to be like, you know, as big of a business as we thought it's going to be. And so we ended up having sort of a smaller acquisition there. So I actually. Both businesses sold in 2017.
[04:09]
Adil
Nice.
[04:09]
Andrew Bielecki
Yeah, so that was sort of like the beginning for me.
[04:11]
Adil
And then what led you to Klaviyo as an opportunity?
[04:15]
Andrew Bielecki
Okay, so here's the interesting. Like there's this in between time. So I had been a founder to that point. So up until 2017 I had never not been a founder. Like this only thing I'd ever done. And so 2019 rolls around and Meta reaches out and they say, hey, do you want to come? It's sort of this interesting thing. I don't think I knew I was being interviewed until my fifth meeting with some executive at Meta. And then it became clear when they sort of went to offer, they said, hey, we want you to sort of look at leading some of the parts of the commerce business. And I thought that was interesting. But really where I landed was I said, you know, the commerce part of the business is interesting, but there's also this like payments piece that I think is really integral to commerce. Can I actually work on both things? And they say, yeah. So I actually. So I came into Meta and ended up having so my first job. It's the first time I've not like personally guaranteed the line of credit, you know, for the place I work. It turns out I think founders can often be successful in that kind of environment because like so much of what you're doing in product is really sort of like a founder like role. It overlaps so heavily with what you do as a founder. So anyway, so I ended up being at Meta for six years. I ran the fintech organization there. So this was all of like payments risk fraud and the checkout experiences across the family of apps and then like standing up commerce inside of WhatsApp. So it's pretty awesome run. And when I got, I got connected through a friend to A.B. and I was sort of. So A.B. is our CEO Andrew Bielecki. And I remember thinking about, hey, at ModCloth, we were working with Klaviyo back in like 2012, right. So when we got reconnected, I was like, what, you know, what has sort of happened to Klaviyo? And like the, you know, the intervening 10 plus years, let's like sort of see where they are. And I couldn't believe how much the company had sort of grown and how successful it was. And also like AB just continued to be in it, like you know, like 150%, you know, 200% sort of in the business. Super high energy, you know, as humble as ever. And I Thought, okay, this is pretty special because I really had, you know, had a great run at Met. I would have stayed in another six years, honestly, had I not got reconnected with ab. But I sort of looked at where the business was and thought, I think this is something really special in terms of where we are. And it really does feel like, you know, sort of like the company's 1% done or in the first inning of, like, a broader journey. And so I said, okay, I think I'm going to take the plunge.
[06:39]
Adil
Exciting time now in terms of product at klaviyo with your B2C CRM. It pains me to say B2C as a DTC founder, but B2C, you can't say BTC because then it's Bitcoin.
[06:51]
Andrew Bielecki
Yes.
[06:51]
Adil
It's got to be B2C.
[06:52]
Andrew Bielecki
Yes. You have to be careful.
[06:53]
Adil
Talk to me about what this means, why, what it solves, and why it's so important now that Klaviyo be making this. This development.
[07:01]
Andrew Bielecki
I think there's a lot around B2C CRM, and I actually, it resonates as a message for me personally as somebody who was sort of like, in this space for a long time. I think back to even my days at ModCloth, like, this is the sort of thing that I think we really would have wanted, right? Stepping back, it's like, you know, ultimately, and lots, you know, things have evolved and changed since the ModCloth days. But even then, like, customer acquisition can be expensive. You know, you sort of have, like, a tough environment there with, like, increasing costs per acquisition. And ultimately, like, in the end, you have this, like, set of increasing expectations, right, of customers. And so some of that is the really big players in the E commerce space, right? So, like, you know, the Amazons of the world, some of it is, you know, just peers and competitors. Like, everybody's always sort of like, shifting the bar up, right? So the bar is getting higher and higher. And so you sort of have like, okay, it's like, as a brand, how do you keep up? And then I think you have a set of technologies and tools that are largely fragmented, right? And I lived this sort of pain in my modcloth life of, like, okay. And this was again a while ago, but even then, we were starting to see the beginning of, like, okay, I'm plugging into all these tools. I have these different point solutions. I end up building sort of like my own, like, middleware or, like, fragmented sort of like, stack to make my life work. And so, like, I think if you step back for us, when we see those problems of like hey, the bar is getting higher. Hey, you have all these disjointed disconnected solutions. It sort of fit naturally to say, hey, like there's an opportunity here to think about like the platform, right. For customer data, for all of the things you do on top of that customer data, right. All of the sort of decision making where and when you can drive automation, like sort of putting it all into one place. And I think for us that felt like, you know, I think the sort of like the light bulb for B2C CRM was like hey, you know, actually like B2B CRMs, this is a sort of like a big space. It's been around a long time but is designed for like a very specific thing, solves like a very specific type of problem, but largely doesn't. You know, when I think about the term B2C to me that is often a proxy for like scale, right? Because in B2B you can often have like one to one, you know, sales reps calling customers. Right. But if you think about B2C it's often like really you have a brand that has a one to many relationship with, with thousands, tens of thousands, Hundreds of hundreds of thousands.
[09:23]
Adil
Yeah. Segments sometimes, but not always that individual connection.
[09:25]
Andrew Bielecki
That's right. And you can, you, you, you, you know, from a human perspective you're not going to scale and sort of like everybody's going to have an account rep these things sort of fundament. The needs are fundamentally different and more scaled for B2C. And so we thought hey, there's actually this is a real opportunity and it parallels to a thing people understand. Right. In B2B. And so for us I think like it just sort of fit that like we can drive the scale of, of of interaction that almost using software allows us to sort of almost get to this like human like level of care and service and sort of like what feels like as close as you can get to this like one to one experience. Right. Without necessarily like having a sales rep. Right. That was sort of like the beginning of us thinking about this as a platform. And so the way I articulate it is like it's a lot of things that converged for us, like the market need, I think the parallels in industry and then our set of capabilities. Like what I actually fell in love with about Klaviyo is we're a data company. I don't think I fully even appreciated that until I joined, but I see it now on the inside. It's like we very much ed And AB started the company as a data company with sort of like this marketing capability as like a first step. And so it really fits well, this idea of B2C CRM. When you think about us being the nucleus for data and decision making and.
[10:45]
Adil
Then what kind of new customer experiences does this kind of unlock for brands who want to jump on here? Is it, you know, you mentioned one to one. We're also in this era of AI with that ability where, you know, one to one becomes a lot more doable because you have that opportunity to do more AI custom interactions. But what kind of like customer experiences does. Yeah. Does CRM unlock for brands?
[11:07]
Andrew Bielecki
Yeah, so I think there's a couple of key things and so I'll answer that first part first and then we'll get to AI second if it's okay. Because I have lots of thoughts about AI, which, which you'll have to probably shut me up on some of those. But like, okay, if we start with the experiences that it unlocks, I think the first thing is like blurring the line between where sort of like outbound messaging, slash marketing or even sales sort of ends and where inbound messaging and service begins. Right? Because if you think about it like if you sort of step back and ask yourself, hey, what's the difference between providing service to a customer before they transact and marketing? Right. It's like, I don't know, they're kind of, they feel like they sort of converge right at the end of the day because you're helping that customer make a buying decision, which is what a lot of marketers are trying to do. And you sort of, you know, we've talked for a long time about, you know, providing customer service and wanting that to be a profit center for businesses as opposed to a cost center. I lived this very much just as a quick aside. It's okay. I live this very much at ModCloth. Like, we actually, you know, we thought different. We were, we were sort of. We were very young. We were trying to figure it out as we went. We were not. We had almost no experience. So we're just making it up as we went. So we, our customer care team, we called them mod stylists. Okay. They were not. And then ahead of the times and yeah, ahead of time. And they sat in the office. So they were not in like some third party call center. They could go. And we always had product in the office. I mean, there was a. For a long time as we were building the business, like the product was in the office and like, sort of, we were distributed. You know, we were like pick packing and shipping the product from like the same space as the office actually well into our scale journey. And they could go grab the product, touch it, feel it, answer a question. Right. And we had as many people calling us, it felt like for a problem with their order as we're calling us for like advice on what dress should I buy for prom. It was like a very real thing for us. And so like you know, just. And that was, you know, ten plus years ago.
[13:08]
Adil
Right.
[13:08]
Andrew Bielecki
Like thinking about. And for us, we didn't know better. Right. We said hey, like really these two things should be the same because ultimately like I'm helping you with a post transaction problem or a pre transaction question. But in the end it needs to, you know, come from a place of knowing you, knowing the products. Right. And being able to provide you just really good insight.
[13:26]
Adil
Yeah.
[13:26]
Andrew Bielecki
Right. And so when you think about that, I think about that like is really the, the unlock that we're thinking about in B2C. CRM is like the first step to us is like service. Right. How do you sort of. And for us as a company that is both kind of a data platform for our customers, you know, I think the super majority of our customers today use us as their kind of CDP or customer data platform. We're well positioned to like if, you know, you get an inbound, an inbound message can be managed from sort of the same place in the same tooling as an outbound message. Right. And in a perfect world you can sort of serve up to let's say the customer care agent, this very like all the information we have about the user. Right. Like what did they, you know, what have they bought, what have they been browsing? So you can actually provide them more than just support. Right. Or sort of classic support. So I think that's the first step that I think gets unlocked. Is this like integrated kind of like marketing service motion.
[14:18]
Adil
Yep.
[14:19]
Andrew Bielecki
I think the second is probably the decision making and insights that come from the analytics that I think you can build on top of the data in our platform. Sort of like having analytics that are actually actionable. Right. Because I think the number one challenge we've heard from folks is like, hey, I have all these dashboards, I have all these reports, but like I don't totally know what to do about them.
[14:39]
Adil
Yeah.
[14:40]
Andrew Bielecki
And so we're trying to, you know, because we have an analytics offering that's right there in Klaviyo. What we're trying to do is, is make it both actionable and Also really easy to just like go from, you know, like that insight to just taking the action right there yo based on the insight. So that's kind of how I think about what gets unlocked is this convergence across marketing, service and analytics. And that's like the starting point. I think there's a lot more we can sort of take it to, but that's, I think, where it starts.
[15:08]
Adil
The other piece I think is loyalty as well. Right. I've mentioned this on the podcast a number of times, but there, there was this anecdote about the restaurant that you go the first time and you get a black napkin and you go the second time you come, they know that you've been there again, so you get a blue napkin and you get a free dessert or something. And then the third time, you know, just basically being able to really reach customers where they're at, understand their history with the brand and kind of treat them accordingly. So I'm interested in ways that CRM kind of unlocks that like, longer term relationship you can have with customers post purchase.
[15:42]
Andrew Bielecki
Yeah, I think so. I love that you're growing in this. You're bringing this up because it's like, I think just to say it, I think loyalty is one of the more underappreciated and maybe underdone things in the commerce space today. And I'm sure there's lots of reasons. I mean, my reasons at ModCloth back in the day were like, it was just expensive and hard to build the tooling and so. And even now, like you have some tools out there, but I think they're more like sort of simplified in their offering where it's like, hey, you can like refer a friend to buy something which is like, not really. It's like more of like social couponing than it is loyalty. I think there's a tremendous opportunity and loyalty. And I think if you actually look at. So we have this, the first foray for us into service is this thing we call Customer Hub. Okay. And Customer Hub is pretty great. I think I'm a little bit biased here, so I'll be as objective as possible. I think it's a great product. But what I think is really cool about Customer Hub is it's sort of a overlay experience that you can enable, let's say on your Shopify store, like with like clicks, like no code, you sort of enable it. And it's so you can imagine this, like this like slide out panel. Okay. On your store. It's all powered by Klaviyo js. So you don't have to like install anything, you don't have to do anything. And it allows you to in your customer hub, you can sort of like view recently ordered products, you can get care really quickly. Right. And you can even see like recommended products all there in customer Hub. And so as I was looking at the customer hub experience, I thought to myself, you know, sort of exactly where you're going, thinking, hey, if we can provide an overlay for the customer or for our customer, so not the shopper, right. But for the brand, if we can provide this overlay, this unified place to have service, couldn't we provide a VIP store for your top 100 or top thousand customers? Because in the end it's all powered on the same data. And so you can imagine there's all kinds of capabilities you could think about from a loyalty perspective that we're able to essentially overlay onto the experience with no code, which I think is like one of the real powers of Klaviyo. So I think there's a lot there for loyalty. Admittedly, I'll say it's like it's vision for us today. There's not a capability live right now, but I think it's very much on our radar as we think about how. And the adoption for customer hub has been great. The early data is great and I can brag about some of that if you'll let me, but we can come back to that. But at a high level, I would say, given that that's going well, I think it's a good sign that there's probably more we can power for brands using technology. The very same technology that powers the.
[18:14]
Adil
Customer hub and allows brands to be less reliant maybe on discounting as a strategy. When you, when you can really understand that you have all this data about people's journeys and their history with the products and everything you can, like you're saying a VIP store experience or something that is exclusive or additional rather than just like blanket discounts, which I think a lot of brands kind of get addicted to when it comes to engaging their list. I'll just pivot quickly a little bit to talk about the current situation right now with sort of consumer confidence is a little bit on the wane. It feels like. What do you think are some of the biggest challenges that are facing brands in today's 2025 environment?
[18:51]
Andrew Bielecki
Oof, that's a great question. I like it. Yeah, it is interesting. I will say I do get some of the consumer. I try to follow the news where I can, but I'm usually 110% in the works. I'm not always following the news as much as I can, but even among my network, like, I'm seeing people so, like, pull back or make comments in ways that I think you haven't, like, I at least haven't heard for a while. So that's just kind of an interesting, you know, data point if nothing else. There's a couple interesting bits here. So. So one is, you know, I think for brands, part of the, the challenge there is like, hey, if you just use sort of like the classic math of like, okay, we have some customer acquisition cost, right? We have some lifetime value, it doesn't appear that the customer acquisition cost is going down. In fact, the opposite appears to be true. Right. It seems to be getting higher and higher over time. But I think if we assume for the sake of discussion that, hey, maybe there's just going to be a little bit less demand or maybe people are going to sort of tighten up some of the way that they spend, then the way you have to think about that math then is like, hey, maybe my LTV or my AOV is going to go down a little bit, at least on that first purchase. So as I think about payback, if the cost per acquisition isn't coming down, right, but like, you know, the amount I'm going to make on that first purchase potentially is, then I have to really think about, like, what my spend and what my budget is going to be. And that's, by the way, that's just the, like, marketing side of it. There's somebody who's lived this. There's also all of the, like, sourcing and like, you know, how do we think about buying and demand planning? And like, I think there's a, there's a whole web of complexity there. But I think what's particularly interesting, you know, at least for us, given the play, and I think this is a big responsibility for us where we sit. If we do end up in a place where there's sort of like sustained kind of, you know, a decrease in demand for folks. Right. You know, it's always more effective from a cost perspective to kind of reacquire your own customer or to get them to purchase again. This is something that killed me at Modcloth in the early days. I was. And you know, we didn't have any of the tools. I mean, there's like, this was so early.
[20:52]
Adil
Spreadsheets.
[20:52]
Andrew Bielecki
Yeah, exactly. But back then I was so mad. Cause we would like, we would, you know, on channels back then. It Was Facebook for us was a big channel. And I was like, we're reacqu. I know this is one of our customers. And like, we're paying to reacquire them, right? Which is like, especially, especially expensive. And this, of course, you know, this idea of sort of retention, re engagement is a thing I think Klaviyo has. Has meaningfully changed the state of the art on in that time. And so I think that's something brands will be able to lean on, right? Is the ability to say, hey, like, if we have a little more of uncertainty in the environment, can or should we lean more into re engaging, reacquiring or even driving up sort of like LTV among our loyal base or some of our key segments or even thinking about over time, just thinking about loyalty as an example, pivoting off of the customer base that we know works for us. Because one thing in Klaviyo that I think is often underappreciated is we're able to use our data to help people do better customer acquisition, right? So they're able to do the kind of like, lookalike audience syncing out with the ad networks. And so these little things, like the way I think about commerce especially is like, this is a saying from my wife, and I love this saying, which is like, there's no silver bullets. Like, there's only lead bullets. You know what I mean? And I think it's sort of that way that if we look at that environment, there's just gonna be a lot of execution that people have to. To sort of think about doing better at the margins. And I think we're pretty well positioned to power that at Klaviyo, both from like a data perspective, but also a just like, tooling and capability perspective.
[22:27]
Adil
You mentioned the customer hub and you mentioned bragging. I'm not asking you to brag, but give me some. Like, as the CPO of this company, what are you seeing about, you know, in terms of adoption of the. Of the products you've built? What are some of the success stories? What are you seeing in the market with. With. With the products that you built?
[22:47]
Andrew Bielecki
I'll sort of try not to brag too much, but instead, you know, as a product person, just sort of like, lean into, hey, what do we. Where do we see things working? Like, where. Because at the end, you know, at the end of the day for us, we are relatively, you know, customer obsessed. At Klaviyo, like, we think a lot about, you know, driving impact for our customer community. So one of the headline Metrics for us that we look at internally is a number we call KAV or KV Klaviyo Attributed value. And so we think about, okay, how are we like. Because at the end of the day it's our goal to help our customers grow and be successful, right? And so we hold ourselves very accountable to this, you know, customer, this Klaviyo attributed value number. Right? Because at the, you know, at the end of the day if we're not driving value for them, then we're not, you know, sort of doing our jobs. Right? And so, so a couple things. So one is like if I look at just kind of interesting, interesting data points as we drive the CRM work, one is so dollar Shave Club, which is a great customer of ours, they're using, you know, us across email, SMS and our customer data platform. They've reduced their churn risk by a third with Klaviyo. And you know, interestingly for them, 44% of their non recurring revenue was attributed to Klaviyo in Q4 of 2024, which is something we're super proud of. And they've gotten a 2x return on ad spend for their reactivation campaigns, right? So like we look at those kind of core stats and that's something we're really proud of in terms of like, okay, we're delivering, right? And I think, you know, if you look at sort of other types of statistics that matter. So like Daily Harvest, which is awesome, right? They are, what they've experienced since implementing Klaviyo is a 15% reduction in E Com developer hours, right. As they switched over to Klaviyo and Shopify. And so like that's another important by the way, coming back to this idea of uncertainty in the environment, that kind of matters, right? Because like at least at Modcloth, like those were the most expensive hours, right? Was sort of the engineering hours and they had an 18% reduction in tech costs just across the board. And so like I think these things actually matter quite a lot. Another one that I'm really proud of, so Happy Wax, which is like a great company that I don't know if you've ever used them, but they have these like wax melts.
[24:52]
Adil
Okay.
[24:52]
Andrew Bielecki
Sort of like a candle. They do candles too, but they have these wax melts. They're pretty great. We have a bunch at home. Happy Wax is using us of course for email, SMS reviews, cdp, you know, and the customer Hub beta. So they're one of our beta customers and they saw a little over a 75% decrease in like Order tracking related customer support tickets year over year. So you know, a 75% decrease I think is a win in a bunch of ways. Right. One is like hey, customers are actually just getting the information they need faster from the hub. But two is that's a much less of a burden on their own customer support team which I think allows the very same support folks to go serve other people better. Yeah, right. So I think it's like a, it's a win win that way, you know, driving people to sort of self service support. And just to say it like as a quick aside, I'm deeply introverted as a person and so like a one on one conversation like this is great for me but like you know, large group settings harder. And I will just to be honest like as a customer, if I can solve a problem myself, like I absolutely want to, like I do not want to have to call, I do not want to be on hold and get like transferred around or any of that stuff. Like I just like let me just click around and solve the problem myself to the degree that I can. And I think I'm not alone right. In that sort of feeling. And I think you see that across, you know, most customers and so you know, there's more than just the stats. You know, when I think about something like that for Happy Wax, I actually think they're probably making their customers a lot happier if they can sort of self resolve these issues.
[26:18]
Adil
Yeah.
[26:18]
Andrew Bielecki
So you know I think those are the ones that are maybe are I'm, I'm probably most excited about. There's like a couple others that are maybe different flavors of impact. Right. So if I think across folks that are using us across channels. So there's you know, McConnell's fine ice creams which is like great because they are an example of somebody that has, you know, people physically in store too. Right. And so they're using us. They have like a POS and online delivery and E comm all plugged into Klaviyo. Right. And, and they're using like Olo and Square. Right. For those integrations and they've had a 55x Klaviyo Roi in their first year I think from the integrations which is I think awesome. And they've seen 8x year over year growth in their POS revenue right. Since implementing. So I think there's just like when I look at that kind of impact it's telling me that like hey, having the data in one place and being able to action off of that data is incredibly powerful. And I think what's exciting to me as I think about some of those recent impacts that we've had is like they're different types of companies and different environments, right with different customer types, different sort of nuances to their use cases and I think they're still able to drive value well.
[27:23]
Adil
Nice. Well thank you for being my very first ever in person D2C podcast.
[27:28]
Andrew Bielecki
This was super fun. I'm honored to have been here. I think this was really fun. I'm glad we were able to do it face to face and I'm glad to be coming back to shop talk and spending time with you since the whole thing work. Appreciate the time. Super fun.
[27:46]
Adil
Thanks so much for listening to today's episode. If you're not a subscriber to our newsletter, you can do that right now at directtoconsumeralloneword co. I'm Eric Dick and this has been the D2C podcast. We'll see you next time.

Summary5 min read

Bonus Episode: How Klaviyo’s CPO Thinks DTC Brands Should Build Customer Relationships in 2025

Release Date: April 23, 2025

In this bonus episode of the DTC Podcast, host Adil engages in a deep conversation with Andrew Bielecki, the Chief Product Officer (CPO) at Klaviyo. The discussion centers around the future of customer relationship management (CRM) for direct-to-consumer (DTC) brands, the importance of loyalty, and how data-driven strategies can enhance customer interactions in the evolving ecommerce landscape of 2025.

1. Introduction to Andrew Bielecki and His E-commerce Journey

Andrew Bielecki begins by sharing his passion for Klaviyo's data-driven approach. He reflects on his entrepreneurial roots, starting with co-founding ModCloth during his graduate studies at Carnegie Mellon in 2005. ModCloth quickly scaled to over $100 million in revenue by 2011, marking Andrew's first significant foray into the ecommerce world.

Notable Quote:

“[00:00] Andrew Bielecki: What I actually fell in love with about Klaviyo is we're a data company...”

Andrew's journey continued with other venture-backed ecommerce ventures before transitioning to Meta. At Meta, he led the fintech organization, overseeing payments, risk, fraud, and commerce within WhatsApp. This role further honed his expertise in data and customer interactions. Reconnecting with Klaviyo’s CEO, Andrew recognized the company's growth and decided to join Klaviyo, seeing it as a unique opportunity to leverage data for scaling DTC brands.

Notable Quote:

“[04:14] Andrew Bielecki: ...this is something really special in terms of where we are...”

2. The Concept of B2C CRM and Its Importance

A significant portion of the conversation is dedicated to understanding B2C CRM and its distinction from traditional B2B CRM systems. Andrew explains that while B2B CRMs manage one-to-one relationships with a limited number of clients, B2C CRMs must handle interactions with thousands or even hundreds of thousands of customers simultaneously.

Notable Quote:

“[09:22] Andrew Bielecki: ...the needs are fundamentally different and more scaled for B2C.”

Klaviyo's B2C CRM integrates customer data, marketing automation, service, and analytics into a unified platform. This integration allows brands to deliver personalized, one-to-one experiences at scale without the need for individual account representatives.

Notable Quote:

“[10:45] Andrew Bielecki: ...we are a data company... B2C CRM.”

3. Enhancing Customer Experiences Through Klaviyo’s CRM

Andrew delves into how Klaviyo’s CRM redefines customer interactions by merging outbound marketing with inbound customer service. By centralizing data, brands can provide more informed and personalized support, enhancing the overall customer experience.

Notable Quote:

“[11:06] Andrew Bielecki: The first thing is like blurring the line between where outbound messaging... ends and where inbound messaging and service begins.”

He emphasizes the role of actionable analytics, where Klaviyo not only provides insights but also enables brands to act on them directly within the platform. This seamless integration helps brands transition from mere data collection to strategic action based on customer behavior and preferences.

Notable Quote:

“[14:17] Andrew Bielecki: ...having analytics that are actually actionable.”

4. The Critical Role of Customer Loyalty

Andrew highlights the often-overlooked importance of customer loyalty in the commerce space. He shares insights from his time at ModCloth, where building strong customer relationships was pivotal to their success.

Notable Quote:

“[15:42] Andrew Bielecki: ...loyalty is one of the more underappreciated and maybe underdone things in the commerce space today.”

Klaviyo’s Customer Hub is introduced as a tool that enhances customer loyalty by providing brands with a unified view of customer interactions. This tool allows brands to offer personalized experiences, such as VIP stores for top customers, thereby fostering long-term loyalty without relying solely on discounts.

Notable Quote:

“[17:00] Andrew Bielecki: ...provide a VIP store for your top 100 or top thousand customers.”

5. Navigating the 2025 Ecommerce Landscape

Adil brings up the current challenges in 2025, particularly the decline in consumer confidence. Andrew addresses these concerns by discussing the rising costs of customer acquisition and the need for brands to focus on retaining and reengaging existing customers.

Notable Quote:

“[18:51] Andrew Bielecki: ...customer acquisition cost is not coming down, in fact, the opposite appears to be true.”

He advises that in a tightening economic environment, brands should prioritize increasing the lifetime value (LTV) of their existing customers rather than solely striving for new acquisitions. Klaviyo’s tools support this strategic shift by enhancing retention and reactivation campaigns.

Notable Quote:

“[20:52] Andrew Bielecki: ...we’re able to drive value well...”

6. Success Stories Demonstrating Klaviyo’s Impact

Andrew shares several success stories that illustrate the tangible benefits Klaviyo brings to its clients:

Dollar Shave Club: Reduced churn risk by one-third and attributed 44% of non-recurring revenue to Klaviyo in Q4 2024, achieving a 2x return on ad spend for reactivation campaigns.
Daily Harvest: Experienced a 15% reduction in ecommerce developer hours and an 18% decrease in tech costs by switching to Klaviyo and Shopify.
Happy Wax: Utilized Customer Hub to decrease order tracking-related support tickets by over 75%, enhancing customer satisfaction and reducing the burden on their support team.
McConnell’s Fine Ice Creams: Achieved a 55x ROI from Klaviyo integrations and an 8x year-over-year growth in POS revenue.

Notable Quote:

“[22:46] Andrew Bielecki: ...Happy Wax... saw a little over a 75% decrease in order tracking related customer support tickets...”

These examples underscore how Klaviyo’s integrated data platform enables diverse brands to optimize operations, enhance customer relationships, and achieve significant growth.

7. Looking Ahead: Future Innovations and Commitment

In the concluding segment, Andrew reiterates Klaviyo’s commitment to being a customer-obsessed data company. He emphasizes the continuous development of tools and features that empower brands to leverage data effectively, ensuring they can navigate complex market dynamics and sustain long-term growth.

Notable Quote:

“[27:28] Andrew Bielecki: This was super fun... glad to be coming back to Shop Talk and spending time with you...”

Andrew expresses excitement about the future, highlighting the ongoing innovation at Klaviyo that aims to further enhance customer relationship strategies for DTC brands.

Final Thoughts

This episode of the DTC Podcast offers valuable insights into the future of customer relationship management for DTC brands. Andrew Bielecki’s expertise sheds light on the critical importance of data-driven CRM, personalized customer experiences, and fostering loyalty in an increasingly competitive ecommerce landscape. Klaviyo’s innovative solutions position it as a pivotal partner for brands striving to scale effectively and maintain strong, lasting relationships with their customers.

Subscribe to the DTC Podcast to stay updated with weekly discussions and tactical insights on marketing, funnels, and scaling strategies for disruptive direct-to-consumer ecommerce brands. Visit directtoconsumer.co for more information.

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Transcript50 lines

[00:00]
Andrew Bielecki
What I actually fell in love with about Klaviyo is we're a data company. And I don't think I fully even appreciated that until I joined E.D. and A.B. started the company as a data company with sort of like this marketing capability is like a first step. And so it really fits well this idea of B2C CRM. When you think about us being the nucleus for data and decision making, what's the difference between providing service to a customer before they transact and marketing, they sort of converge right? At the end of the day, loyalty is one of the more underappreciated and maybe underd things in the commerce space today. There's a tremendous opportunity in loyalty. And I think if you actually look at we are relatively customer obsessed at Klaviyo, we think a lot about driving impact for our customer community. So one of the headline metrics that we look at internally is.
[00:54]
Adil
Adil. Welcome to the very first in person DTC podcast.
[00:59]
Andrew Bielecki
I'm super excited. I'm honored to both, like, be doing the podcast and also to be like, the first to do it, you know, face to face.
[01:06]
Adil
We're here in the saloon, the Klaviyo Saloon, here at Shop Talk, which is my first shop talk. Have you been to a Shop Talk before?
[01:12]
Andrew Bielecki
You know, I have, but like years ago because I sort of had this like, you know, early part of my journey in commerce. And so there was coming to Shop Talk not long, you know, after it started as a conference and then it's. I've taken a, like a hiatus. So this is my first time back. I'm pretty excited. I'm actually, like, kind of surprised. It's like, still going and it's the, you know, it's like, it's still like the, from what I can tell, preeminent sort of conference. So it's great.
[01:34]
Adil
It's amazing. Love Vegas. Love being here in Vegas. But I wanted to start a little bit with your journey. You mentioned your, you know, starting in E commerce. I also saw that you were a pro gamer at some point, so I want to ask about that. But talk to me about your journey in E commerce and kind of what led you to being the CPO at Klaviyo.
[01:50]
Andrew Bielecki
Oh, man. Okay. So my journey in E commerce starts a long time ago. Me and a couple very close friends back in graduate school. So this is graduate school at Carnegie Mellon and this was 2005. We were, you know, I was sort of like an entrepreneurial kid, right? Very technical as a youth. And so I had never had any Interest in like getting a real job. I didn't even know how to necessarily get a real job or like what that meant. So I sort of went to both college and graduate school with the intent of like, hey, I'm going to start a company. And there was another person like me in grad school at Carnegie Mellon and we were sort of thinking about what we were going to do. We were plotting and scheming very technically, like, okay, how are we going to like go, you know, start some really interesting business. His then girlfriend, you know, now wife, was like, while we were doing all this brainstorming, was quietly shipping product out of her dorm room. Okay. At this little company called Modcloth.
[02:45]
Adil
Oh.
[02:46]
Andrew Bielecki
And she was working on, you know, sort of like she was going thrifting to these like, you know, thrift and estate sales and buying like one of a kind pieces and selling them online. And meanwhile, Eric and I are sort of. This is Susan, our other co founder. And meanwhile, Eric and I are thinking about how to take over the world. And so at some point we realized like, hey, ModCloth is the real business we should be focused on. And so we decided to take a run at that. This was back in 2005 and we sort of went for it. I was co founder and cto and I had a husband and wife team as my two founders, which is like a very interesting experience. We're still like family today. But anyway, that was sort of like how I got into, you know, commerce to start with. And Modcloth was a. It was a pretty fast ramp. I mean, we raised a million dollars in 2006. I left the company at end of 2011, beginning of 2012, and we're doing more than 100 million at top line. And it was, it was. And that was like a long time ago in commerce years, you know, so.
[03:36]
Adil
Like really long time. When I hear early days, I think like 2015, 2016. This is like a decade before then.
[03:41]
Andrew Bielecki
Yeah. So that was my first sort of foray into the space and it stuck with me. I ended up doing a couple other e commerce businesses that were venture backed. When I left, the third one, which was like modestly sized was called Fox Commerce, which was sort of like an upmarket. This is like before Shopify plus.
[03:54]
Adil
Okay.
[03:55]
Andrew Bielecki
Had Shopify not come up market, it probably would have been a much different outcome, that business. But you know, they did and we said, okay, this is not going to be like, you know, as big of a business as we thought it's going to be. And so we ended up having sort of a smaller acquisition there. So I actually. Both businesses sold in 2017.
[04:09]
Adil
Nice.
[04:09]
Andrew Bielecki
Yeah, so that was sort of like the beginning for me.
[04:11]
Adil
And then what led you to Klaviyo as an opportunity?
[04:15]
Andrew Bielecki
Okay, so here's the interesting. Like there's this in between time. So I had been a founder to that point. So up until 2017 I had never not been a founder. Like this only thing I'd ever done. And so 2019 rolls around and Meta reaches out and they say, hey, do you want to come? It's sort of this interesting thing. I don't think I knew I was being interviewed until my fifth meeting with some executive at Meta. And then it became clear when they sort of went to offer, they said, hey, we want you to sort of look at leading some of the parts of the commerce business. And I thought that was interesting. But really where I landed was I said, you know, the commerce part of the business is interesting, but there's also this like payments piece that I think is really integral to commerce. Can I actually work on both things? And they say, yeah. So I actually. So I came into Meta and ended up having so my first job. It's the first time I've not like personally guaranteed the line of credit, you know, for the place I work. It turns out I think founders can often be successful in that kind of environment because like so much of what you're doing in product is really sort of like a founder like role. It overlaps so heavily with what you do as a founder. So anyway, so I ended up being at Meta for six years. I ran the fintech organization there. So this was all of like payments risk fraud and the checkout experiences across the family of apps and then like standing up commerce inside of WhatsApp. So it's pretty awesome run. And when I got, I got connected through a friend to A.B. and I was sort of. So A.B. is our CEO Andrew Bielecki. And I remember thinking about, hey, at ModCloth, we were working with Klaviyo back in like 2012, right. So when we got reconnected, I was like, what, you know, what has sort of happened to Klaviyo? And like the, you know, the intervening 10 plus years, let's like sort of see where they are. And I couldn't believe how much the company had sort of grown and how successful it was. And also like AB just continued to be in it, like you know, like 150%, you know, 200% sort of in the business. Super high energy, you know, as humble as ever. And I Thought, okay, this is pretty special because I really had, you know, had a great run at Met. I would have stayed in another six years, honestly, had I not got reconnected with ab. But I sort of looked at where the business was and thought, I think this is something really special in terms of where we are. And it really does feel like, you know, sort of like the company's 1% done or in the first inning of, like, a broader journey. And so I said, okay, I think I'm going to take the plunge.
[06:39]
Adil
Exciting time now in terms of product at klaviyo with your B2C CRM. It pains me to say B2C as a DTC founder, but B2C, you can't say BTC because then it's Bitcoin.
[06:51]
Andrew Bielecki
Yes.
[06:51]
Adil
It's got to be B2C.
[06:52]
Andrew Bielecki
Yes. You have to be careful.
[06:53]
Adil
Talk to me about what this means, why, what it solves, and why it's so important now that Klaviyo be making this. This development.
[07:01]
Andrew Bielecki
I think there's a lot around B2C CRM, and I actually, it resonates as a message for me personally as somebody who was sort of like, in this space for a long time. I think back to even my days at ModCloth, like, this is the sort of thing that I think we really would have wanted, right? Stepping back, it's like, you know, ultimately, and lots, you know, things have evolved and changed since the ModCloth days. But even then, like, customer acquisition can be expensive. You know, you sort of have, like, a tough environment there with, like, increasing costs per acquisition. And ultimately, like, in the end, you have this, like, set of increasing expectations, right, of customers. And so some of that is the really big players in the E commerce space, right? So, like, you know, the Amazons of the world, some of it is, you know, just peers and competitors. Like, everybody's always sort of like, shifting the bar up, right? So the bar is getting higher and higher. And so you sort of have like, okay, it's like, as a brand, how do you keep up? And then I think you have a set of technologies and tools that are largely fragmented, right? And I lived this sort of pain in my modcloth life of, like, okay. And this was again a while ago, but even then, we were starting to see the beginning of, like, okay, I'm plugging into all these tools. I have these different point solutions. I end up building sort of like my own, like, middleware or, like, fragmented sort of like, stack to make my life work. And so, like, I think if you step back for us, when we see those problems of like hey, the bar is getting higher. Hey, you have all these disjointed disconnected solutions. It sort of fit naturally to say, hey, like there's an opportunity here to think about like the platform, right. For customer data, for all of the things you do on top of that customer data, right. All of the sort of decision making where and when you can drive automation, like sort of putting it all into one place. And I think for us that felt like, you know, I think the sort of like the light bulb for B2C CRM was like hey, you know, actually like B2B CRMs, this is a sort of like a big space. It's been around a long time but is designed for like a very specific thing, solves like a very specific type of problem, but largely doesn't. You know, when I think about the term B2C to me that is often a proxy for like scale, right? Because in B2B you can often have like one to one, you know, sales reps calling customers. Right. But if you think about B2C it's often like really you have a brand that has a one to many relationship with, with thousands, tens of thousands, Hundreds of hundreds of thousands.
[09:23]
Adil
Yeah. Segments sometimes, but not always that individual connection.
[09:25]
Andrew Bielecki
That's right. And you can, you, you, you, you know, from a human perspective you're not going to scale and sort of like everybody's going to have an account rep these things sort of fundament. The needs are fundamentally different and more scaled for B2C. And so we thought hey, there's actually this is a real opportunity and it parallels to a thing people understand. Right. In B2B. And so for us I think like it just sort of fit that like we can drive the scale of, of of interaction that almost using software allows us to sort of almost get to this like human like level of care and service and sort of like what feels like as close as you can get to this like one to one experience. Right. Without necessarily like having a sales rep. Right. That was sort of like the beginning of us thinking about this as a platform. And so the way I articulate it is like it's a lot of things that converged for us, like the market need, I think the parallels in industry and then our set of capabilities. Like what I actually fell in love with about Klaviyo is we're a data company. I don't think I fully even appreciated that until I joined, but I see it now on the inside. It's like we very much ed And AB started the company as a data company with sort of like this marketing capability as like a first step. And so it really fits well, this idea of B2C CRM. When you think about us being the nucleus for data and decision making and.
[10:45]
Adil
Then what kind of new customer experiences does this kind of unlock for brands who want to jump on here? Is it, you know, you mentioned one to one. We're also in this era of AI with that ability where, you know, one to one becomes a lot more doable because you have that opportunity to do more AI custom interactions. But what kind of like customer experiences does. Yeah. Does CRM unlock for brands?
[11:07]
Andrew Bielecki
Yeah, so I think there's a couple of key things and so I'll answer that first part first and then we'll get to AI second if it's okay. Because I have lots of thoughts about AI, which, which you'll have to probably shut me up on some of those. But like, okay, if we start with the experiences that it unlocks, I think the first thing is like blurring the line between where sort of like outbound messaging, slash marketing or even sales sort of ends and where inbound messaging and service begins. Right? Because if you think about it like if you sort of step back and ask yourself, hey, what's the difference between providing service to a customer before they transact and marketing? Right. It's like, I don't know, they're kind of, they feel like they sort of converge right at the end of the day because you're helping that customer make a buying decision, which is what a lot of marketers are trying to do. And you sort of, you know, we've talked for a long time about, you know, providing customer service and wanting that to be a profit center for businesses as opposed to a cost center. I lived this very much just as a quick aside. It's okay. I live this very much at ModCloth. Like, we actually, you know, we thought different. We were, we were sort of. We were very young. We were trying to figure it out as we went. We were not. We had almost no experience. So we're just making it up as we went. So we, our customer care team, we called them mod stylists. Okay. They were not. And then ahead of the times and yeah, ahead of time. And they sat in the office. So they were not in like some third party call center. They could go. And we always had product in the office. I mean, there was a. For a long time as we were building the business, like the product was in the office and like, sort of, we were distributed. You know, we were like pick packing and shipping the product from like the same space as the office actually well into our scale journey. And they could go grab the product, touch it, feel it, answer a question. Right. And we had as many people calling us, it felt like for a problem with their order as we're calling us for like advice on what dress should I buy for prom. It was like a very real thing for us. And so like you know, just. And that was, you know, ten plus years ago.
[13:08]
Adil
Right.
[13:08]
Andrew Bielecki
Like thinking about. And for us, we didn't know better. Right. We said hey, like really these two things should be the same because ultimately like I'm helping you with a post transaction problem or a pre transaction question. But in the end it needs to, you know, come from a place of knowing you, knowing the products. Right. And being able to provide you just really good insight.
[13:26]
Adil
Yeah.
[13:26]
Andrew Bielecki
Right. And so when you think about that, I think about that like is really the, the unlock that we're thinking about in B2C. CRM is like the first step to us is like service. Right. How do you sort of. And for us as a company that is both kind of a data platform for our customers, you know, I think the super majority of our customers today use us as their kind of CDP or customer data platform. We're well positioned to like if, you know, you get an inbound, an inbound message can be managed from sort of the same place in the same tooling as an outbound message. Right. And in a perfect world you can sort of serve up to let's say the customer care agent, this very like all the information we have about the user. Right. Like what did they, you know, what have they bought, what have they been browsing? So you can actually provide them more than just support. Right. Or sort of classic support. So I think that's the first step that I think gets unlocked. Is this like integrated kind of like marketing service motion.
[14:18]
Adil
Yep.
[14:19]
Andrew Bielecki
I think the second is probably the decision making and insights that come from the analytics that I think you can build on top of the data in our platform. Sort of like having analytics that are actually actionable. Right. Because I think the number one challenge we've heard from folks is like, hey, I have all these dashboards, I have all these reports, but like I don't totally know what to do about them.
[14:39]
Adil
Yeah.
[14:40]
Andrew Bielecki
And so we're trying to, you know, because we have an analytics offering that's right there in Klaviyo. What we're trying to do is, is make it both actionable and Also really easy to just like go from, you know, like that insight to just taking the action right there yo based on the insight. So that's kind of how I think about what gets unlocked is this convergence across marketing, service and analytics. And that's like the starting point. I think there's a lot more we can sort of take it to, but that's, I think, where it starts.
[15:08]
Adil
The other piece I think is loyalty as well. Right. I've mentioned this on the podcast a number of times, but there, there was this anecdote about the restaurant that you go the first time and you get a black napkin and you go the second time you come, they know that you've been there again, so you get a blue napkin and you get a free dessert or something. And then the third time, you know, just basically being able to really reach customers where they're at, understand their history with the brand and kind of treat them accordingly. So I'm interested in ways that CRM kind of unlocks that like, longer term relationship you can have with customers post purchase.
[15:42]
Andrew Bielecki
Yeah, I think so. I love that you're growing in this. You're bringing this up because it's like, I think just to say it, I think loyalty is one of the more underappreciated and maybe underdone things in the commerce space today. And I'm sure there's lots of reasons. I mean, my reasons at ModCloth back in the day were like, it was just expensive and hard to build the tooling and so. And even now, like you have some tools out there, but I think they're more like sort of simplified in their offering where it's like, hey, you can like refer a friend to buy something which is like, not really. It's like more of like social couponing than it is loyalty. I think there's a tremendous opportunity and loyalty. And I think if you actually look at. So we have this, the first foray for us into service is this thing we call Customer Hub. Okay. And Customer Hub is pretty great. I think I'm a little bit biased here, so I'll be as objective as possible. I think it's a great product. But what I think is really cool about Customer Hub is it's sort of a overlay experience that you can enable, let's say on your Shopify store, like with like clicks, like no code, you sort of enable it. And it's so you can imagine this, like this like slide out panel. Okay. On your store. It's all powered by Klaviyo js. So you don't have to like install anything, you don't have to do anything. And it allows you to in your customer hub, you can sort of like view recently ordered products, you can get care really quickly. Right. And you can even see like recommended products all there in customer Hub. And so as I was looking at the customer hub experience, I thought to myself, you know, sort of exactly where you're going, thinking, hey, if we can provide an overlay for the customer or for our customer, so not the shopper, right. But for the brand, if we can provide this overlay, this unified place to have service, couldn't we provide a VIP store for your top 100 or top thousand customers? Because in the end it's all powered on the same data. And so you can imagine there's all kinds of capabilities you could think about from a loyalty perspective that we're able to essentially overlay onto the experience with no code, which I think is like one of the real powers of Klaviyo. So I think there's a lot there for loyalty. Admittedly, I'll say it's like it's vision for us today. There's not a capability live right now, but I think it's very much on our radar as we think about how. And the adoption for customer hub has been great. The early data is great and I can brag about some of that if you'll let me, but we can come back to that. But at a high level, I would say, given that that's going well, I think it's a good sign that there's probably more we can power for brands using technology. The very same technology that powers the.
[18:14]
Adil
Customer hub and allows brands to be less reliant maybe on discounting as a strategy. When you, when you can really understand that you have all this data about people's journeys and their history with the products and everything you can, like you're saying a VIP store experience or something that is exclusive or additional rather than just like blanket discounts, which I think a lot of brands kind of get addicted to when it comes to engaging their list. I'll just pivot quickly a little bit to talk about the current situation right now with sort of consumer confidence is a little bit on the wane. It feels like. What do you think are some of the biggest challenges that are facing brands in today's 2025 environment?
[18:51]
Andrew Bielecki
Oof, that's a great question. I like it. Yeah, it is interesting. I will say I do get some of the consumer. I try to follow the news where I can, but I'm usually 110% in the works. I'm not always following the news as much as I can, but even among my network, like, I'm seeing people so, like, pull back or make comments in ways that I think you haven't, like, I at least haven't heard for a while. So that's just kind of an interesting, you know, data point if nothing else. There's a couple interesting bits here. So. So one is, you know, I think for brands, part of the, the challenge there is like, hey, if you just use sort of like the classic math of like, okay, we have some customer acquisition cost, right? We have some lifetime value, it doesn't appear that the customer acquisition cost is going down. In fact, the opposite appears to be true. Right. It seems to be getting higher and higher over time. But I think if we assume for the sake of discussion that, hey, maybe there's just going to be a little bit less demand or maybe people are going to sort of tighten up some of the way that they spend, then the way you have to think about that math then is like, hey, maybe my LTV or my AOV is going to go down a little bit, at least on that first purchase. So as I think about payback, if the cost per acquisition isn't coming down, right, but like, you know, the amount I'm going to make on that first purchase potentially is, then I have to really think about, like, what my spend and what my budget is going to be. And that's, by the way, that's just the, like, marketing side of it. There's somebody who's lived this. There's also all of the, like, sourcing and like, you know, how do we think about buying and demand planning? And like, I think there's a, there's a whole web of complexity there. But I think what's particularly interesting, you know, at least for us, given the play, and I think this is a big responsibility for us where we sit. If we do end up in a place where there's sort of like sustained kind of, you know, a decrease in demand for folks. Right. You know, it's always more effective from a cost perspective to kind of reacquire your own customer or to get them to purchase again. This is something that killed me at Modcloth in the early days. I was. And you know, we didn't have any of the tools. I mean, there's like, this was so early.
[20:52]
Adil
Spreadsheets.
[20:52]
Andrew Bielecki
Yeah, exactly. But back then I was so mad. Cause we would like, we would, you know, on channels back then. It Was Facebook for us was a big channel. And I was like, we're reacqu. I know this is one of our customers. And like, we're paying to reacquire them, right? Which is like, especially, especially expensive. And this, of course, you know, this idea of sort of retention, re engagement is a thing I think Klaviyo has. Has meaningfully changed the state of the art on in that time. And so I think that's something brands will be able to lean on, right? Is the ability to say, hey, like, if we have a little more of uncertainty in the environment, can or should we lean more into re engaging, reacquiring or even driving up sort of like LTV among our loyal base or some of our key segments or even thinking about over time, just thinking about loyalty as an example, pivoting off of the customer base that we know works for us. Because one thing in Klaviyo that I think is often underappreciated is we're able to use our data to help people do better customer acquisition, right? So they're able to do the kind of like, lookalike audience syncing out with the ad networks. And so these little things, like the way I think about commerce especially is like, this is a saying from my wife, and I love this saying, which is like, there's no silver bullets. Like, there's only lead bullets. You know what I mean? And I think it's sort of that way that if we look at that environment, there's just gonna be a lot of execution that people have to. To sort of think about doing better at the margins. And I think we're pretty well positioned to power that at Klaviyo, both from like a data perspective, but also a just like, tooling and capability perspective.
[22:27]
Adil
You mentioned the customer hub and you mentioned bragging. I'm not asking you to brag, but give me some. Like, as the CPO of this company, what are you seeing about, you know, in terms of adoption of the. Of the products you've built? What are some of the success stories? What are you seeing in the market with. With. With the products that you built?
[22:47]
Andrew Bielecki
I'll sort of try not to brag too much, but instead, you know, as a product person, just sort of like, lean into, hey, what do we. Where do we see things working? Like, where. Because at the end, you know, at the end of the day for us, we are relatively, you know, customer obsessed. At Klaviyo, like, we think a lot about, you know, driving impact for our customer community. So one of the headline Metrics for us that we look at internally is a number we call KAV or KV Klaviyo Attributed value. And so we think about, okay, how are we like. Because at the end of the day it's our goal to help our customers grow and be successful, right? And so we hold ourselves very accountable to this, you know, customer, this Klaviyo attributed value number. Right? Because at the, you know, at the end of the day if we're not driving value for them, then we're not, you know, sort of doing our jobs. Right? And so, so a couple things. So one is like if I look at just kind of interesting, interesting data points as we drive the CRM work, one is so dollar Shave Club, which is a great customer of ours, they're using, you know, us across email, SMS and our customer data platform. They've reduced their churn risk by a third with Klaviyo. And you know, interestingly for them, 44% of their non recurring revenue was attributed to Klaviyo in Q4 of 2024, which is something we're super proud of. And they've gotten a 2x return on ad spend for their reactivation campaigns, right? So like we look at those kind of core stats and that's something we're really proud of in terms of like, okay, we're delivering, right? And I think, you know, if you look at sort of other types of statistics that matter. So like Daily Harvest, which is awesome, right? They are, what they've experienced since implementing Klaviyo is a 15% reduction in E Com developer hours, right. As they switched over to Klaviyo and Shopify. And so like that's another important by the way, coming back to this idea of uncertainty in the environment, that kind of matters, right? Because like at least at Modcloth, like those were the most expensive hours, right? Was sort of the engineering hours and they had an 18% reduction in tech costs just across the board. And so like I think these things actually matter quite a lot. Another one that I'm really proud of, so Happy Wax, which is like a great company that I don't know if you've ever used them, but they have these like wax melts.
[24:52]
Adil
Okay.
[24:52]
Andrew Bielecki
Sort of like a candle. They do candles too, but they have these wax melts. They're pretty great. We have a bunch at home. Happy Wax is using us of course for email, SMS reviews, cdp, you know, and the customer Hub beta. So they're one of our beta customers and they saw a little over a 75% decrease in like Order tracking related customer support tickets year over year. So you know, a 75% decrease I think is a win in a bunch of ways. Right. One is like hey, customers are actually just getting the information they need faster from the hub. But two is that's a much less of a burden on their own customer support team which I think allows the very same support folks to go serve other people better. Yeah, right. So I think it's like a, it's a win win that way, you know, driving people to sort of self service support. And just to say it like as a quick aside, I'm deeply introverted as a person and so like a one on one conversation like this is great for me but like you know, large group settings harder. And I will just to be honest like as a customer, if I can solve a problem myself, like I absolutely want to, like I do not want to have to call, I do not want to be on hold and get like transferred around or any of that stuff. Like I just like let me just click around and solve the problem myself to the degree that I can. And I think I'm not alone right. In that sort of feeling. And I think you see that across, you know, most customers and so you know, there's more than just the stats. You know, when I think about something like that for Happy Wax, I actually think they're probably making their customers a lot happier if they can sort of self resolve these issues.
[26:18]
Adil
Yeah.
[26:18]
Andrew Bielecki
So you know I think those are the ones that are maybe are I'm, I'm probably most excited about. There's like a couple others that are maybe different flavors of impact. Right. So if I think across folks that are using us across channels. So there's you know, McConnell's fine ice creams which is like great because they are an example of somebody that has, you know, people physically in store too. Right. And so they're using us. They have like a POS and online delivery and E comm all plugged into Klaviyo. Right. And, and they're using like Olo and Square. Right. For those integrations and they've had a 55x Klaviyo Roi in their first year I think from the integrations which is I think awesome. And they've seen 8x year over year growth in their POS revenue right. Since implementing. So I think there's just like when I look at that kind of impact it's telling me that like hey, having the data in one place and being able to action off of that data is incredibly powerful. And I think what's exciting to me as I think about some of those recent impacts that we've had is like they're different types of companies and different environments, right with different customer types, different sort of nuances to their use cases and I think they're still able to drive value well.
[27:23]
Adil
Nice. Well thank you for being my very first ever in person D2C podcast.
[27:28]
Andrew Bielecki
This was super fun. I'm honored to have been here. I think this was really fun. I'm glad we were able to do it face to face and I'm glad to be coming back to shop talk and spending time with you since the whole thing work. Appreciate the time. Super fun.
[27:46]
Adil
Thanks so much for listening to today's episode. If you're not a subscriber to our newsletter, you can do that right now at directtoconsumeralloneword co. I'm Eric Dick and this has been the D2C podcast. We'll see you next time.