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- [00:00]
Sam
I think about as a marketer and working with marketers over the last decade, your own channels are like gold. And I see SMS as that like next owned channel that marketers have to invest in, they have to win. I see it driving a lot of revenue for marketers.
- [00:17]
Eric Dick
What are you seeing as the biggest mistakes that these brand owners are making with sms?
- [00:21]
Sam
The brands that do the best or I see doing the best, they're finding ways to send. There's a few core principles for us when it comes to AI, so we believe a few things we think 1. Are you looking to maximize your channels? If you're looking to like maximize revenue on your channels, then you should go with who is best for each channel. What's the relationship you want to build with someone? Is it just like sending discount codes or do you want more than that?
- [00:53]
Eric Dick
Sam, welcome to the DTC podcast. I gotta say first of all, I love that you're on here with your with an olive branch during these trying times with a peace offering by wearing a Raptors hat that says we the North. I appreciate the solidarity brother in these trying times.
- [01:09]
Sam
I love our neighbors to the north and I particularly love the city of Toronto. So I had to represent NBA champions.
- [01:15]
Eric Dick
The Toronto Raptors, just like the Boston Celtics.
- [01:18]
Sam
So we share common Celtics.
- [01:20]
Eric Dick
That's right. Well, let's get right into it. Basically. I, I, I was taking a look at your, your LinkedIn and you know you're a, you're a SaaS veteran, been in the marketing game for a long time. I just was curious what has sort of driven you to sms as you know at Postscript.
- [01:34]
Sam
Sure, absolutely. Y I've not only been a marketer for a while, I'm a bit of a masochist where I've marketed to marketers and I've been in more like traditional enterprise SaaS. I'm located in Boston so Klaviyo obviously is a hobby or so. I have a lot of good friends who were early on at Klaviyo and I always was intrigued by the D2C industry. And then on top of that I've seen email grow up as well. Like HubSpot's based in Boston. And I think about as a marketer and working with marketers over the last decade, like owned, your own channels are like gold and email obviously is still like the standard. And I saw and see SMS as that like next owned channel that marketers have to invest in. They have to win. I see it driving a lot of revenue for marketers and like selfishly I think there's an opportunity for those of us who grow substantial companies in businesses like email and sms.
- [02:33]
Eric Dick
What do you see brands out there? You're probably talking to dozens of brands a week, hundreds in a year or more. What are you seeing as the biggest mistakes that these brand owners are making with sms?
- [02:45]
Sam
Yeah, so I think like SMS is nuanced whereas like email, technically like sending an email, it doesn't cost any money. Whereas sms, every time you send out a text it's going to cost money. So sometimes people come in with too much of a scarcity mindset. And I'm here to say like the brands that do the best or I see doing the best almost have that abundance mindset. Now that doesn't mean to just like hit a full list send day after day, but they're finding ways to send the right amount of text to the right subscribers. So that means the right type of segmentation, that means putting brand in there, it means making sure that you're tracking your metrics. But where brands who kind of just like pull back for the sake of pulling back and saving money, they're missing opportunities to like maximize that channel.
- [03:31]
Eric Dick
Give me an example of some of the smart segmentation you're talking about.
- [03:35]
Sam
Absolutely. So I think there's a couple of things, I think one is like that's a bit me talking my book but we actually have some large like nine figure brands who have run tests where they're like all right, we actually want to send less because we think we're oversending. And what they find is that when they send less they actually make less money. Not just on SMS and overall but when you think about smart segmentation, I think it has a lot to do with like your brand specifically. Like you have to understand like how important is building a brand and community. What's my aov? How often are people, people purchasing? So I have certain shops or certain brands that they're sending like two to three messages even a day to folks who have subscribed in the last seven days because there's a high propensity to purchase that they see they can have the ROI there. Whereas somebody who's got like a high aov, like maybe people are in the market so they're having a more thoughtful welcome series over the first 30 days they're asking questions or they're doing be looking for behavioral responses and then once you get past outside of that like buying period, whatever the research it is, then they're switching to a different type of strategy where it's educational and like Continue to keep them warm. So once they're in that like buying cycle because someone's going to buy, I don't know, a mattress every seven years or whatnot.
- [04:48]
Eric Dick
Yeah. So you're, so you're segmenting both within the customer journey and within the types of messages that you're sending to them. So you're not just always hammering. That's what I get most of the time from most brands probably is, is sale messages all the time. And it's just like it feels one.
- [05:03]
Sam
Note that can work and it does work. But I would say like you do risk and we see this over like the biggest sale days. The brands that have varied their type of messages, it could be just like a message from our founder. It could be something educational as I mentioned that they bring in messages that aren't like specifically call to action with a discount. They see better results particularly on the ROI perspective on those big sale days with high, high intent when they have varied their messages. Doesn't say that like just hammering people with discounts. You can, you can be successful in the channel that way. But the variation of sends and thinking about like what do you want your brand to represent on this like innately personal channel. Like I, like I have my phone in my pocket. It's either on my pocket or on the desk. And like you as a brand have access to people who, who it's almost like an always on accident or an instant access and like respecting that and understanding like what's the relationship you want to build with someone? Is it just like sending discount codes or do you want more than that?
- [06:11]
Eric Dick
Yeah, I think one good example of it and it's on your website. We had Cody come on the podcast quite a while ago and he was talking how valuable his quiz was for in his user acquisition funnel to the point where all of his ads were directing to the quiz to help you determine your skin type so you could get, you know, a better product for you and talk about how they've turned that into an SMS experience.
- [06:32]
Sam
Yeah. Jones Road Beauty has one of the most interesting and in depth approaches to sms. So what they do is they have that skin, skin type quiz and any SMS subscriber is going to go through that specific quiz in a responsive nature. So it'll ask specific questions and then you'll be able to respond back as a subscriber with whatever answers you have. And at the end of the quiz you'll be put in a specific segment depending on the skin type that you have. And at that point then Jones Road has specific offer or they have specific messages, they have specific products and they'll recommend specifically to you depending on what segment or skin type you've had. So it's like innately personalized. And what's really interesting about Jones Road is they don't discount. So this is, they don't want to use the channel as like oh here's 10% off, here's 20% off. They have used this like they have just taken this like unique approach to try and get to know the subscribers or their customers as best as possible and serve them with recommendations in a personalized way. And it works really well.
- [07:38]
Eric Dick
I think that's super smart because the other thing I've talked about with people on postscript over the years is conversational commerce. And one of the challenges with conversational commerce is scaling it because you got to have all these one to one conversations. I think Jones Road has found a way to find something that feels intimate and conversational and gives them a crazy amount of data. But it's also pretty crazy scalable because you can just send a survey, you know, send that experience to anyone.
- [08:00]
Sam
Yeah, and like conversational can mean a lot of different things. It's like there's always almost like the like maturity levels or good like starter to mid level to like advance and something as simple as like responsive welcome series could be a good way to start or once in a while sending out a more brand focused message and making sure that you are monitoring the responses in whatever smell this platform you're using. And then there's the ability like what Cody and his team have done is they've really built out these complex flows that personalize and then when you know, we'll get to this later. But the what AI is opening up is like truly conversational approaches. You can also do the truly conversational approaches with like human in the loop, which we do and other folks do as well. So like there's kind of like a step level here.
- [08:50]
Eric Dick
Well, geek out with me a little bit. Talk to me first of all about how AI is implemented at postscript right now and then where you see it going in the future.
- [08:59]
Sam
Yeah, sure. So right now. So I think there's a few core principles for us when it comes to AI. So we believe a few things. We think one, AI needs to be on brand. Just because you're handing it over to AI, it has to be on brand. Two, it has to focus on providing insights. So like not just hey, we're going to send out messages but what information are we getting back and three AI needs to be revenue driving. So those are like the core, three core principles when we think about AI.
- [09:27]
Eric Dick
Opposed script and I feel like any brand out there could import those and use them as their main principles as well. Right. Those are pretty high level. I like it.
- [09:36]
Sam
Yeah. And like for us it's like we got a lot of early feedback that they didn't like brands, didn't want to just be like here, send out AI messages for us. They want to make sure that they've got two hands on the steering wheel. And that's sometimes hard because it's like a lot of AI's use cases is letting it learn and send out. So we have something called the brand center which is like the gateway to any AI at postscript. And the brand center is like, it's an in depth almost like brief around your brand. You put in information about your brand, you put in product types, you put in attributes like do I want to be more concise? Or verbios, do you want to use emojis or not? Are there words that you don't want AI to use? Are there preferred words or sign offs? You even put in a Persona like you know, Sam, who is a basketball fan who's in their 30s in Boston, is the Persona or whatever and it'll actually, it'll take that and it'll send a message out to Eric, say hey, this is Sam. I was watching the, you know, rafters game last night. Do you want to check out this hat kind of thing? You know, that's the type of stuff that it enables and making sure that marketers feel comfortable that we're respecting that they work, that they've put in to building their brand and their true voice is like core principle number one.
- [10:47]
Eric Dick
When you look at how this is being used in brands like are people on these chats for long times, Are they asking them do they go down like the chatgpt rabbit hole with them or is it really, do they, are they good at keeping it focused on making purchases?
- [11:00]
Sam
So we have a few things that are out today. The first thing is something called Infinity testing that's based off the brand center. And infinity testing has two versions. One is on our one automation. So like high intent automation, specifically browse abandonment and cart abandonment. And so when somebody does an abandonment, there's an automation that gets sent out. This is pretty typical. They're some of the most profitable and best performing SMS messages. And what we're doing is we're testing a standard or what we call an inspiration message against an AI. Generated message. And this is constantly testing. We're trying to find the best message over and over. So it takes information from the inspiration message from the brand center, from historical data of what performs. We have prompts behind the scene and models that we've built to optimize on this urgency offers all of that. And what it's trying to do is find the best message that's on brand that performs the highest off of conversion cbr. And so like that's one. The other is we have infinity testing for campaigns. And what that is, is for a campaign you can do the same thing except instead of always on, because campaigns are like automations are always running, campaigns are point in time. But essentially what we do is we generate upwards of 50 to 100 different campaign variants based off of inspiration message, based off of goals that you have for a campaign. And based on that brand center you select ideally 10, maybe it's 6, maybe it's 12. And then it tests those 10 messages against a holdout. So 20% of messages are held out. Those 10 messages versus the inspiration message, that's the one like you or I would write. And then whatever Message wins, usually four to five times. It's the AI message, it's sent to the additional 80%. So we're basically having AI take the brand, we're having it take historical information and we're testing it. And it's like the value is, the speed to testing is like, I don't even want to say tenfold. Like we call it infinity testing because it's like exponential. Yeah. And so that's driving upwards of 20% lift on revenue for those automations and somewhere around 38% EPM lift on campaigns. So that's what we're doing today. But we have other stuff coming too.
- [13:09]
Eric Dick
I love just the visualization of the AI infrastructure in a way.
- [13:14]
Sam
Right.
- [13:14]
Eric Dick
How you have these different entities collecting data, you've got an AI behind it kind of all working together. I think that's just a really good model for anyone thinking about how to build AI into the core of their business.
- [13:25]
Sam
It's interesting because like we did not want to put out a ChatGPT wrapper to start. Like if you look at a lot of products out there, like sms, email, it doesn't matter. It wasn't even outside like social media tools, people would be like, oh, ChatGPT is here, OpenAI's here, let's put a like AI generated message. And they weren't really, we didn't find on personal use in our research, they were all that useful. We didn't find that brands were using that and we were just like, we don't want to do that. We want to like, at best they save a little time. We want to drive revenue for folks. And so like that's why we built it in that way because like, why waste our development cycles and why waste our customers time on something that was like marginally incremental at best and would.
- [14:12]
Eric Dick
Have to happen in this sort of like stop and start way where you guys have built it into this, like, you know, speed to test mentality and ability. So that's where you get these feedback loops that create more and more value in the best summation of what Al will bring for us as a species.
- [14:27]
Sam
Yeah, exactly.
- [14:30]
Eric Dick
I'm just curious, geek out a little bit on where you see this going because it's like, it's like you've started in these two, you know, very low hanging fruit areas, which makes the most sense, where you can have the biggest impact probably for the most people. But where do you see it going beyond this?
- [14:42]
Sam
Yeah. So I mean I think even to like before we get there, I think it's like taking a step back on like what makes SMS so unique and why AI is so prime for this channel. For messaging in general. If you think about like we talked about conversational commerce. If you think about like where conversations happen, people aren't doing that over email. Sure they're kind of doing it on chatbots, but that's more like so far down the customer journey that they're like, hey, I need to return this shirt tax. And SMS is inherently conversational. It's like, I don't know, you probably have half a dozen group chats going on right now. Maybe you're texting. Like when I've had work done on my house, I've texted the electrician like, and then like he's, you know, I send Venmo. Like it's like conversations and like commerce is literally done over your phone. So it's like prime for conversations. We launched SMS sales which was conversational human led sales representatives actually in Phoenix trying to draw like having actual conversations with like you and I to see if we can drive more sales and like the channel is prime for conversational.
- [15:49]
Eric Dick
The last time I talked to the postscript, you had just started that program, the live sales. Who is that meant for? Who does that work for best?
- [15:56]
Sam
That works for larger brands who have higher AOVs typically. Just because if you're thinking about driving a purchase making the economics work both for the brand and for postscript, like somebody who's gonna buy like a wallet, which is somewhat like, that's, that's higher, or bed sheets, that's even higher, or like, or like a mattress, as we talked about, or rugs. Those are perfect examples where you're gonna have a bunch of questions. It's like, oh, is this, like, is this soft? Is what seats are best for people who are, have allergies or whatnot? That's the perfect example there. And the larger shops, just because of there's volume, you're trying to have a bunch of conversations. It can work for smaller shops, but like what you want is to build that scale. So like, that works really well, but like the economics, that works for the brand, that works for postscript for putting humans on it. It's just like you need to have a certain amount of scale and you need to have a certain amount of aov. But it was like, we've learned a lot. It's been a super successful product. It drives incremental revenue not just on the channel, but at the store level. And there's also insights that come out of it.
- [17:05]
Eric Dick
When I asked you about the Future plans of PostScript, you referenced the principles with which PostScript is kind of thinking about AI. What can you sort of tease about the way you see it going and when people might be able to expect new things?
- [17:19]
Sam
Yeah. So if you think about AI, there's like two camps of AI. There is the older predictive marketing technologies, like optimal send time, that has been rebranded as AI. Valuable, been around for a while now. There's new age or newer, which is generative AI. That's LLMs. And LLMs are an SMS in terms of the conversation. They've got the three letter acronyms. But the LLMs, plus like text messaging, the SMS channel are like a match, a perfect match. LLMs are really good at taking a bunch of unstructured data in text data which you get from sms. They're very good at mimicking human interaction. If you've ever like had a conversation with ChatGPT or Claude, you can actually like go back and forth and they scale really well. So you put all that together, like you can take a bunch of information back, you can mimic que, and you can scale that across hundreds of thousands of subscribers. We want to invest in experiences like that so that everyone can have that SMS sales experience because we want, you know, single person, shopify solo entrepreneurs to be able to deliver this amazing conversational approach to sms. And I'll expect we get there pretty soon. If you're coming to Shop Talk, you should come check out our booth as we'll be sharing some of that there.
- [18:38]
Eric Dick
Oh, super exciting. The brands that in my experience that are the most successful with SMS are often the ones that are doing drops. And this was, you know, I talk about this all the time. This brand Brendan Hirojo presentation he did at our event in Victoria, but it was just about how he has his drops planned out for two years in advance basically. And when you have a calendar stacked like that, you always have a reason to reach out to people. And SMS is this like intimate like 100% open rate channel. And so if you have a good reason to be messaging people like you have a new product dropping, it's probably doubles its efficacy. Am I accurate?
- [19:15]
Sam
Yeah. So we actually have our data science and bi team work with the product marketing team which I lead every year right around black like BFCM time frame to figure out like recommendations for bfcm, data driven recommendations. And also we do a review of the highest performing tax of the year. And I've done this myself for a few years now. And typically somewhere between like 60 and 70% of those top performing messages are drops. Like if you think about it, it's urgency, it's a specific offer. You can all always, you can position your SMS subscribers as vip, there's a time limit on it and you can prime them. So often what I see is like and this is the power of like multi step campaigns or flows where you can seven days before, then three days be like hey a drop is coming, hey a drop is coming. And, and then on the drop you can send that, you can send it to your list. So it's just a great way to like get people primed to be next to their phone. I think about it like if it's like there's a concert you want to get tickets to and you know it's going to sell out. You typically, typically like have your phone right there and you open up the Ticketmaster app or maybe you have your phone right there waiting for it to open and then you, you log in. So it's the same thing. The other area that's pretty similar is additions to adding items to the cart or like for subscription. So like we have a bunch of subscription customers who have like monthly subscriptions and they'll send something out like hey, like you can add 50% off like a pack of bacon to your order this month and those perform really well because it's creating a similar urgency. Someone's already in a buying cycle and it gets them to take action.
- [20:54]
Eric Dick
Yeah. And if you've got data about your users from a different survey you've run or anything, you can segment it even better.
- [21:01]
Sam
Yeah, I mean that's the Jones Road play. It's like hey, we try this. You could do that across a lot of different, I mean almost anyone can think about segmentation and make add on offers.
- [21:13]
Eric Dick
We talked about email, we have the email and retention podcast, the world's best in fact. So I'm always interested in people's opinion. We talk about on that podcast a lot about Gmail sort of tightening rules when it comes to promotions and mail in general. What limitations does SMS have if any in this world? And I'm also just curious about actual what are unsubscribe rates for SMS versus something like email?
- [21:38]
Sam
Yeah, so like what you're going to see, like some subscribe rates are going to like vary depending on how often you're sending, how big your subscription list is, the quality of the content, who you're sending to in terms of segmentation, but it is going to be often lower than or it's going to be higher than email just because it's in front of folks more often. But when you think about deliverability and filtering out. So obviously there's like the promotions tab and spam within Gmail for sms. You're starting to see with Android and some of the new iOS releases that there are spam filters that you can be put in there but it's much easier to get to someone's quote unquote inbox. However, when you think about like deliverability, a lot of this ties towards the vendor who you choose. So the postscripts or the or other folks and how is their relationship and standing with aggregators and carriers? If you're compliant, if you're shown that you follow the different carrier laws and like local laws, you're going to have a higher standing and there's going to be a higher rate of deliverability because the carriers or the aggregators can actually reject sends depending on a bunch of different factors. So just making sure that whomever that you're using for SMS as your partner is thinking about that is making sure that like those deliverability rates are high and similarly how are they thinking about like throughput which is how quickly the messages get sent. So like not as much restriction as email in the sense of a bunch of different folders that is coming, but there is more throttling potentially. There's many layers of compliance laws and rules that are different than email that you want to make sure you've got covered.
- [23:19]
Eric Dick
Speaking of the sort of retention environment, you've got these big players, Klaviyo for instance, coming out with all in one type solutions. What line does postscript walk when it comes to those players and the SMS space?
- [23:33]
Sam
Yeah, I mean I think like Klaviyo is great email provider. They provide a lot of different things as well and like they're one of the most important integrations and partners with us. I think it's somewhere like 90% of our customer, 80 or 90% of our customers are integrating with Klaviyo and like we would recommend them for email typically. But I think the question is more like are you looking to maximize your channels? If you're looking to like maximize revenue on your channels, then you should go with who is best for each channel. Both email and SMS can be incredibly profitable. We have brands that are making more money on big sale days on SMS than email. It's not pervasive, it's not 100%. But like some brands, they are making more money on SMS than email. And if you want to treat it with that level of importance, then we believe that like a best in class solution, like a postscript is going to make you more money. And SMS is an incredibly efficient and high ROI channel. And so if you're adding a compounding effect of the best product, the best strategy, the best compliance and deliverability on an already effective channel, those results are just going to compound. And we see that in terms of what we, what we hear from customers and in the market. You know, there's reasons why you might like want to consolidate, but you know, I'm biased. Why, why best in class is the.
- [24:52]
Eric Dick
Way to go are brands sending? If you looked, you probably don't have this data right in front of you, but I think it's probably the way like our brands are send more messages than ever this year than previous years. It's still a very high growth category is what I'm trying to say.
- [25:06]
Sam
Yeah, I mean we have customers who come from other providers who, you know, they're still nascent. Like they're eight, nine figure brands who have like large email lists and Maybe they have 10 or 20 or 30,000 subscribers for SMS and you'll see them like double into SMS and really grow that list and you'll see them quadruple or more. They're send in a year and the revenue follows like these are smart brands, they're gonna go what makes them money and they come in and they're Just like just starting to truly scale up their SMS program now. I've been at postgraduate for about three years. When I first joined there was people who probably didn't have an SMS program. That's fewer and far between at this point. So like almost everyone has a program. The question is, is it like are you just kind of getting started or are you super mature?
- [25:57]
Eric Dick
How big of a team are you guys sending to Shop Talk?
- [25:59]
Sam
Oh, we're sending, we're sending a bunch of folks but a couple of our founders will be there. Founder Adam Turner, our CEO, he's going to have a speaking slot over there. It's one of those five minute sessions. It's actually on AI and technology and how it's changing the e commerce landscape. We've got a bunch of stuff going on there. So we've got a nice booth right in the center there. So we will be there. People should come say hi.
- [26:21]
Eric Dick
Yeah, super cool. And you've also got a webinar coming up. Tease that a little bit. We'll put a link to that in the show notes.
- [26:27]
Sam
If you're not at Shop Talk, we've got a webinar on April 16. It's going to talk about a lot of the things we're doing in AI, a lot of what I talked about. We're going to like we always do, we are going to show the goods. We're not going to just wax poetic. We have customers on the products we're launching and it'll be proven revenue driving products just like our, just like our promise. So if you're not gonna be at Chopchalk to check us out. April 16th, we're having a product launch event. It's gonna be good stuff.
- [26:56]
Eric Dick
Are there any brands out there that don't use postscript that you either think they're missing the mark with their SMS program or you're actually really impressed by their SMS program.
- [27:06]
Sam
I don't know if like, like we are challenging ourselves to be the best SMS platform, the best SMS partner for anyone on Shopify and we are successful with brands from the smallest to the largest. But like we want to, we have shown that we could deliver results for everyone. So like the largest brands, we, I don't know if they are, they're not doing SMS poorly but we'd love for the Alo Yogas, the skims of the world to come give us a shot because we think we could knock it out of the park for them because we continue to do that for all the brands. Some of the largest brands in the world.
- [27:42]
Eric Dick
Yeah, it's a, it's a channel that pays to innovate on because it's so immediate and because, yeah, it really packs a punch.
- [27:49]
Sam
And I would say, like, where we're focused is we're focused on Shopify brands. We're focused on D2C, so E commerce. We're not going to different industries at this point. We're not focused outside of Shopify. We're focused on building the best SMS programs for the largest, most successful brands on the. In the Shopify ecosystem. And that's what we think about 24 7. And we've shown, like, if you go to our website, if you check out the case studies, it's like those brands, they see a lot of value in that. And so, like, we stand behind that.
- [28:23]
Eric Dick
You heard it here first. Aloe and skims. Let's go. Let's give. Give Sam a call on LinkedIn. Just do it. Why not, right? Get Lululemon while you're at it. Let's go. If you're not. If you don't have it, let's go. Manifestation Station. Thank you so much for coming on the podcast today, Sam. This was a lot of fun.
- [28:40]
Sam
Thank you for having me. This.
- [28:49]
Eric Dick
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 DTC podcast. We'll see you next time.