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- [00:03]
A
Here's something that should bother you. Two shoppers visit your site. One looks at a $30 product, the other one looks at a $200 product they both abandon. And most brands will send them the exact same email, which is insane. Instant fixes this. It watches what each shopper does on your site and builds the perfect follow up around their behavior. The right product, the right message, the right offer and the right timing. And for the operators who care about incrementality, this is the part that matters. Instant now lets you measure performance on the same attribution window you're already using inside kl. So if your team lives by a one day click, you can see exactly what Instant is adding up on a one day click view. And believe me, when you see how much revenue your standard email setup is still leaving untouched, you're going to want Instant live. Today over 1500 brands are live, including ThirdLove, Liquid IV and Kind Patches. And this month only, you can get 50% off your first 60 days at instant1.slash. Sharma, welcome back to another episode of Limited Supply. All right, today's episode is with Joseph. I met him when I was working with Feastables and Joseph was kind of the head of retention over at Feastables, which is, you know, Mr. Beast's multi hundred million dollar chocolate brand. Absolutely killing it both digitally and in retail. Anyways, I met Joseph there and today he works with a variety of brands, specifically a lot of the fast scaling supplement performance marketing brands. And you know, those are a lot of times the brands that I like to go and look at as inspiration. I tend to find that those guys are, you know, it's usually like vice industries do something first and then it gets to the underground drop shippers and app builders and then it slowly gets its way to supplement brands that are, you know, good brands and then it makes its way to kind of the general e commerce world. So we were talking about a lot of things that, you know, have for a long time been tested in the kind of underground world, but it's always just been done in a way that was shady before. So you know, now you're talking about brands with massive celebrities or just brands that are huge and so they have a lot more things when it comes to compliance and what they're able to do and kind of where the guardrails are. So the reason I got Joseph on in the first place was I was just excited to chat with him and go deep on what he's doing from a retention standpoint. He's not just overlooking email and sms, but he's thinking about subscription and how do you acquire customers that have the highest lifetime value from the get go and what kind of offer are you getting them in so that you know you, you maximize lifetime value based on what they first get. So all those kinds of things, we went high level, we went super deep in the weeds and overall it was just a great, it was super informative. I put one newsletter out already from the podcast. I'll probably put one or two more out. There was just a bunch of nuggets in here. So, you know, if you don't want to miss out on at least three to four nuggets you'll be able to walk away with on the retention side of your business, then I highly recommend you just keep listening to this episode. Anyways, give it a listen, let me know what you think. Feel free to reach out to Joseph himself on Twitter. He's super responsive. Reach out to me on Twitter @Mr. Sharma and yeah, I'll see you next week. All right, Joseph, welcome to Limited Supply. I'm absolutely stoked to have you here. There's not a lot of retention experts that I know in the industry and you're one of the greatest. So I'm excited to have you here and talk retention because we don't really talk much retention stuff here. It's obviously a part of it. But you know, I'm, I've always been on the growth side and the acquisition side of things. But yeah, I'm really excited to talk through a bunch of stuff today. Before we jump into it, give us a, a bragging intro of yourself. You know, how would, how would you brag about yourself, not just introduce yourself?
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B
So I don't really like talking about myself too much but you know, I'll give this a try.
- [03:48]
A
I know.
- [03:49]
B
So my last full time role was at Feastables. I was one of the first hires there on the E Comm side. They brought me in as head of retention and, and stayed it as head of retention for about a year before getting promoted to director of E Comm. Growth and retention. Stayed in that, in that new role for about a year as well before leaving to kind of start this fractional retention business where I got a chance to work with the biggest mushroom coffee company in the world, signed an NDA so I can't share their name and then kind of, you know, one thing led to a next and got the opportunity to do the same for instant Hydration. And now most recently I meet so coming in building retention systems from the ground up bringing that retention leadership. And you know, again, when we speak our retention, it's not like email marketing. Right. I mean I think that's like certainly a lever but you know, you know, expands a lot more beyond that at this point. Yeah.
- [04:40]
A
I'm excited to talk more about like what you feel retention is. I've always said that, I guess. Yeah. Different point of view. But I've always said that retention, if good retention is done, you know, your, your brand is a top five thought in somebody's mind or it might be something that gets brought up at the dinner table, but it's gotta always be stuff that you know, contributes to some. Something that's, it's gotta be a program design that's good enough that people remember.
- [05:03]
B
Remember it a hundred percent. I mean I feel like we're, we're seeing that like with grooms. Right. Like groons in their exit. I mean of course they've had an insane growth story but you know, they don't, they don't get that type of growth without like the retention and like the LTV plays that they've made on the back end. Just like building a memorable brand, having the mind share. I know that's something you've talked about before. So. Yeah, I could not agree with more.
- [05:25]
A
Yeah, like what do you feel like falls under the category of retention.
- [05:30]
B
So I mean I, I think it's different based on a category of brand. Right. So the, the retention that I focus on, you know, is mostly in the supplement space and you know, for a supplement brand, you know, again just going back to email. A lot of the campaigns you would send. Right. Are typically going to be sent to a, you know, a prospect list or a non customer group or you know, maybe one time purchase customers. But I think we all know like in the space is like the more you email your active subscribers, you know, the more churn you're probably going to drive. So it's not to say you should never email them, of course. It's just like being strategic about what kind of messages you want to send to them, what kind of value you want to add to like that customer journey. So I'll look at email as a retention tool in the context of like win back flows. Right. Optimizing your upcoming order flow. The upcoming order flow is a huge driver for churning. Um, but it can also be a huge driver for retention if you kind of flip the script where you know, when people get an upcoming order email, most emails are like super transactional and they're like you have a, you Know, an order coming in three days, you're gonna get charged $200, whatever it might be. And you know, that's not something that too many people are gonna read and be excited about. So we type, you know, we try to like flip that script and make it something that like, you know, your, you know, your next level benefits are gonna unlock in the next, you know, 30, 60, 90 days, whatever it might be. So we'll spend a lot of time there. And then of course, in the subscriber portal, there's huge opportunity for driving retention by just loading up the portal with content around again, like benefit messaging and you know, making it easy for customers to manage subscription without being too shady. So we spend a lot of time on cancel flows, a lot of time on like, you know, the first kind of 14 days, first 30 days of onboarding your transactional emails. Specifically like the shipping emails, like order confirmed, order shipped, orders on the move, order delivered. Those are like some of your highest open emails, right? Of probably like any account. A lot of brands will have those emails like still within Shopify, which is like a huge mistake because you can't really see the data, you can't really like change the design too much on those. So we'll, you know, bring those into Klaviyo and then like really overhaul them to make them again not transactional. We want to make them like moments of like, you know, customer opens the email and then now they're more excited to explore the brand. I think a great example of this is if you go place an order from Rise Superfoods, you'll see that, you know, you're instantly met with value, right? One of the first emails you get is, I think it's like a surprise and delight message. One of them. It's like you have a free gift coming on your next order that we're, you know, that we picked you to, to receive. Like that, that type of thing drives retention. You know, they, they also give you like access to a free call with a nutritionist or something like that, or like a dietitian, I don't know, something like that. Um, that, you know, again it's like as a customer, it's like you, you're going to love the brand that much more, you're going to remember them that much more. Because of that, they give you a, a free class pass membership for like a month, right? So it's like these are retention levers that you can pull by kind of, you know, again overhauling the, the onboarding experience. And then also, you know, Again, maybe I'm just rambling, Nick, but product inserts, I feel like again, know, I kind of post about this on LinkedIn. A lot of brands will kind of just treat like a product insert as like something that, you know, it's like, it's more of like a throw in, right? It's like, oh, we just kind of know we should be doing that as a brand and you know, we're just going to write something nice from the founder to the customer and kind of like hope that that like moves the needle. But in most cases there's like actually zero tracking and zero kind of like testing or accountability with that channel. And it is most certainly an area that a lot of brands really should focus on. You know, think of brands like Ultra, right? So like when you place an order from Ultra, you're getting met with an insert that's like, there's different levels to Ultra. Like if you want to feel Ultra more, you know, you should probably take like two pouches or if you really want like the maximum effect, you want to take three pouches, right? And you know, there's another brand like Alice Mushrooms that I posted about. Like they're, they're, they sell like these like, I don't know, aphrodisiac chocolates and same kind of thing. It's like you could take one a day consistently to just increase your libido. But if you want that extra boost and you're gonna, maybe you wanna have like a good night, whatever it might be, you know, you take an extra one for that day. So again, it's like you wanna use the insert as like that moment that you know, the customer is gonna read it every single time. And so like, what kind of content can we throw onto this that is gonna drive the needle for retention? There's actually so much more I could go into, but I don't want to, I don't want to over, you know, I don't want to hijack your, your podcast here.
- [10:03]
A
Well, before we jump to some other stuff on that, like, so when you're talking about the product insert, right, are you saying that it's better to use it from like an educational standpoint or are you saying like actually what you put there should tie toward the, the product outcome, like the emotional outcome. So in that example, having a good night, you know, you're tying that to that versus talking about, you know, what are the ingredients in the thing?
- [10:28]
B
Yeah, exactly. I mean, I feel like a combination of both would be great, right? Like ideally you are double downing and maybe like, you know, further educating the customer on like the specific ingredients that might be part of your formula that, you know, again, might be moving a needle for these specific benefits. But at the same time, yes, just like painting that picture, framing, you know, for the customer, like what you might feel down the line is like to me, the most important part of all of this of like, how do we help the customer use the product better? Because in a lot of cases there's, there's just like basic level of product education that a lot of, you know, customers don't know how to, you know, they don't know the importance of like daily consistency. Right. So it's like you want to reinforce the daily use of the product and then show how like maybe you have some kind of trials or studies that you've done. Whether it's like clinical or just like through consumer studies that show over 12 weeks of taking the product daily, you know, users found X, Y and Z benefits. Right. So now as a customer, when I open it on my first order, I'm like, oh, okay, so this is the exact like output is the exact like benefit that I'm looking to get. And you know, they're just telling me, they're just giving me the blueprint. Right. Of how to actually achieve that. And so I think there's that. And then there's now also another lever of all of this that is like purely retention play where if you, if you go order from Marsman, I think Marsman has honestly one of the best product inserts I've ever seen. They also have given you a, like a, I don't know if it's like a 30, 60, 90 day habit tracker that's physical, of course. And then of course they want you to fill out the habit tracker. But what's actually really cool is there's a message at the end of it that they essentially prompt you to take a photo, like A screenshot After 90 days when you've completed all the, you know, the, the daily check marks and then submit it. And you will get a free month of Mars Men for doing that. Right. But I assume they're not going to give you that unless you've actually completed three months worth of orders. Right. So it's almost like pre baking in the retention. If you really want a free month, you want to get all this value, you got to stick with us. Right. And try the product. And of course that's how you drive, you know, consistent usage, which is everything.
- [12:40]
A
Yeah. Wow, that's amazing. Yeah. Even just in that, you know, what, what you kind of talked about was you went over basically product inserts, the. Those four emails, post purchase between, like, you know, placing the order and the order basically being unboxed. You talked about the inserts. How important do you also think, like, the actual packaging, branded tape, the unboxing, the. The feel of the box, all those things, how important do you think that is compared to, you know, for example, like, there's so many times I'll talk to brands, they're like, no, we'll just put it in a mailer. We already got the purchase.
- [13:16]
B
Totally. Yeah. And, you know, I would say, like, one of the best examples of packaging that I've. That I've really liked is Imate, which is one of the clients that we work with. And, you know, if you've ever ordered ime, it's just truly an incredible unboxing experience that, you know, I think it's, you know, I guess there's like, different lenses to approach this from, right. Where it's like, if I'm looking at this from a retention lens, I do, of course believe that a better unboxing experience is going to lead to higher retention just because it creates a more memorable brand. Which goes back to the point we were talking to at the start of this, of this podcast where it's like, you know, you open the imate box and there's like this really cool. There's like a pack of cards. And like, every card has like, a different sort of like, education piece of the brand that, you know, I think is obviously great for the customer to know. And there's like a really, like, powerful mission statement, like, behind that, like, on the actual, like, box, the inner flap. And so I think it's like, when you can create unforgettable moments like this, obviously going to just, you know, help drive the connection to the brand. But, you know, it's not something I can say we've ever, like, tested. Right. So it's like, hard to put data behind, like, stronger retention with better on unboxing experiences. But even if, like, you don't want to go as far as, like a crazy nice, you know, box. Yes. A branded mailer could go a long way. And I will just add from the perspective of like, growth marketing or just like, guerilla marketing. You know, I live in an apartment building. When I go to, you know, get my packages downstairs, you know, I. It's almost like free advertising when you have a really sick mailer or box.
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A
Yeah, I think about that all the time, especially just around the city. Seeing UPS and FedEx moving, you know, doll full of boxes. You always see Eight Sleep or Chewy or hellofresh. And you see it and it's, it's
- [15:01]
B
like, it's literally a billboard. So it's like whatever the incremental cost is of doing that, it feels like, you know, it has to be worth it if you can make a really cool branded, you know, box or mailer. So, yeah, totally agreed.
- [15:14]
A
The other thing you mentioned was GIFs and specifically also GIFs on a delay, which I think is really smart. Both in the Rise and the Mars Men examples, how do you help? Like, how do you advise brands to choose their gifts? Like, for example, I always find it a fun little exercise to do. And you know, back when I worked at Hint, that was one thing that I learned from Hint because the founder came from a direct marketing background, like, you know, American Express and like those types of companies. And so they used to always do gifts with purchase, which would crush for promotions. Like promotional gifts with purchase with no extra discount goes such a long way. But, you know, it's always hard to find unique things that are unique to the brand versus things that just feel like, oh, they just went to Alibaba and got something to throw in there.
- [16:06]
B
I mean, sure, it's, it's definitely. I feel like it comes up with every engagement we work on now. And, you know, the brand's like, what kind of gifts make the most sense? You know, we just launched a gifting program for Imate in the last few months and seeing nice success from that. But I think again, it, it kind of all comes down to like, the intention of like, why you want to throw these gifts in. Right. Is it to kind of fool the customer into thinking they're going to get something nice and then they don't? Right. Because that could totally backfire if you just have like a cheap throw in. Right, Totally. And you market this cool big gift or mystery gift, whatever it might be, and it's like a, you know, something that clearly is worth a few dollars that they're never going to use. And so I think, you know, from the perspective of gifts, it's like, you know, what is additive to the customer experience based on the product they actually purchased. Right. So, you know, a brand that, you know, you and I both love, Gray Matter. Right. We've talked about this brand quite a bit. We both do some work with them. Gray Matter is truly one of the best products I've ever tried in my entire life. Not the point. Or that's besides the Point. But in their case, you know, they'll give you a frother and then the next month or maybe in future months you'll get, you know, a shaker bottle. And you know, these may sound like potentially basic gifts, but to be honest with you, if you just put that product into a glass of water and try mixing it with a spoon, you're going to get some clumping, you're going to get, you know, you know, it's not going to be the cleanest kind of product experience. That's not just the case for them obviously. It's probably the wider kind of. Yeah, multi.
- [17:30]
A
Right.
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B
So you know, in their case, especially cold water. Exactly right. Especially in cold water, which most people are not going to know about. Exactly. So for them, the shaker bottle, like 10 times out of 10 you shake it in that thing, it's fucking perfect, you know. And so yeah, it's, it's obviously conducive to a better customer experience. I would say like if you're going to think about gifts, you know, from the margin perspective, you don't want to exceed something that's more than like 5, definitely no more than 10% of your like gross margin because then you have to like obviously see like an equal lift on retention if you're going to use these gifts as like retention play to kind of justify the added cost. Otherwise it's, it's actually more of like a, a detrimental gift than a, than a gift driving retention for us. But as long as it's like sub 5% cogs and it's an additive product like that, you're doing something right. Yeah, yeah.
- [18:25]
A
I've always, I've always been such a big proponent of like building out a real offer that's you know, a deal on the product. You know, the brand gets something A lot of times now that's basically the subscription piece of it. And then you know, the customer gets basically the, the arbitrage perceived value of the gift. You know, buy, buy the Tumblr for a dollar and nine cents and value it at $19 or something. And, and then one thing I also did at, at hint that everybody thought was silly, but I thought this is kind of a no brainer was three months of class pass because I figured that's basically like $45 value or whatever it was times three, you know, maybe $90 of value for ClassPass. They're, they're basically spending money on acquisition. So if I can give them a customer, the cogs of those three months, whatever their hard cost is. Is basically their customer acquisition cost. So why wouldn't they do that? And we did it with Postmates as well and it crushed because the probably for the same reason still working today. And today I see it with like. Com and Othership and some of the other kind of like more calming apps. But I wouldn't be surprised if brands also just start coming out with their own versions of fully digitally native.
- [19:48]
B
Oh man, I could not agree more. I feel like the, the tech savvy brands out there with all the access to AI now. Right. Like, you know, a calm partnership is going to cost you, you know, quite a bit of money. Right. And so like if you can't.
- [20:02]
A
Yeah, because now they're, they're like the celebrity in that engagement as well.
- [20:06]
B
Exactly, totally. So, you know, if you want to like, you know, do this on a budget, you can create your own version of this by, you know, cooking something up with, you know, some kind of AI tool. Like, I mean Nick, you're the AI guy here, so I mean you could probably talk about that.
- [20:21]
A
Yeah, yeah, I'm all in right now. I was going to say, what are some of the AI tools you're using?
- [20:26]
B
Cloud code. Manus. Those are the two, honestly that I use the most. You know, I haven't gone like deep into like vibe coding like true software or anything like that yet. But from the perspective of like you know, saving time by replicating or like building skills with you know again Manus or cloud code and then using the skill to replicate the output across different instances of like the same exact, you know, use case like that to me is like a fucking no brainer. And then obviously Manus would like, if you ever want to mock something up, whether it's a fucking even in like an insert or an email or you know, a landing page, like Manus is insane. And like that's my go to for that. But yeah, what about you? What have you been using?
- [21:14]
A
Yeah, definitely a lot of Manus. I've got behind me four Mac Minis that are all set up as open claw systems. So you know, everything from building websites, like you know, the doc I shared with you, our prep doc, all the way to, you know, I made a app that is Roast Nick Co is the domain and you Basically Apple Pay 5 bucks and you put your website in and you get the same level of like a $5,000 agency audit for your site. So been building fun things like that. But also I was at dinner with Cody from Jones Road this week and we were just talking about some of the different things and, you know, even building systems where you are, like, he's doing a lot of stuff with CRO, so, like, he's got a system where he's plugging in. He got the API from heatmap, which has been installed on his site for a couple of years. So it has all the data just sitting there. Right. Then he's got his ad performance, so it has that context. It's got probably his email stuff, so it has that context from, like, Copy Creative standpoint. And then he plugs in Outer Signal. He can get all of his customer Personas and start really building Personas there. And then he can have an engine that knows every test he's ever run on the site. And he's basically, you know, coming up with a new CRO test. And he's three for three right now doing this, which is crazy, but I just thought it's so sick. Like, you know, that's. That's a really cool way to. You're not just using one thing. You're kind of like taking, all right, Outer Signal API, Heat Map API, you know, Manus or not Manus, but Meta API. And you kind of put it all together and then he's even deploying it just using the regular, like, Shopify API.
- [23:01]
B
Yeah, I mean, clearly that's like the way to go. It just, you know, it takes, like, the time commitment, but, like, if you can put in the time, it's going to save you so much time down the road. And, like, he's just doing that for CRO, but, like, you could literally do that across any function, you know, a hundred percent.
- [23:20]
A
Have you come across generative emails a lot?
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B
You mean, like, with certain platforms or just in general?
- [23:26]
A
Yeah, in general. Both.
- [23:28]
B
Yeah. I mean, I feel like we've seen some. I mean, I've seen some pop up in Twitter and, you know, I mean, like, I won't even call out any names. I haven't seen any. That, like, blew me away. But I would say, like, the way that we're using it across some brands is. Or brands that are, like, far more AI forward. We're using, like, cloud code to kind of like. We're using it as like a. Kind of like a first step for, like, mocking up all of our emails so that we can, like, build, like, the skeleton structure and then just like, pass that off to designers and like, the copywriters, and then they just like, fill in the gaps. The time it takes now to create emails is like, you know, not even anywhere close to where it used to be. And like you could batch create, you know, 50 emails within like 30 minutes now that are super solid emails going like we're literally sending these out to huge lists and they're performing well. I would say like from that perspective it's definitely improving a lot but like a one shot like click of a button and then just generating a perfect email for any brand. I, I haven't seen it but I'm super excited for that day when it comes.
- [24:36]
A
Yeah, I feel like it's coming soon. Time for the retention tip of the week brought to you by Instant. If you're a founder and you haven't personally audited your post purchase experience in the last 90 days, do it this week. I'm serious. Place an order on your own site. Pay attention to every single touch point for 48 hours. Here's why. The first 48 hours after someone buys something are the highest attention window you'll ever get. Ever. They're excited, they're checking their emails for shipping confirmation, they're looking up your brand on social. And most brands completely waste this window with a boring transactional shopify email and radio silence until the package arrives. The best operators I've seen use that 48 hour window to do three things. One, reinforce the purchase decision and tell them why what they bought is great. Second, set expectations when it's arriving, how do you use it? What should they expect? Third, introduce the brand world. Your story, your community, your other products. This isn't about selling more right now, it's about making them feel like they just joined something, not just bought something. Instant can help you build all these kinds of personalized post purchase flows that run on autopilot. Their AI generates emails based on what each customer actually bought and what they browsed. Head to Instant1Sharma to learn or more. Okay, I want to talk about what, what you think are the most important flows a brand can have, especially going into, you know, a life cycle where they're trying to have high retention. So consumable products or supplements, where do you feel are the most important flows that a brand needs to have to launch and then where should they try to get to? And then I also want to talk about like how you think about campaigns that are not just kind of, you
- [26:18]
B
know, just fluff basically for sure. So I mean most people probably give the answer of like a welcome series. Just it's like of course, of course that's like what gets people in. But in most cases only like one or two emails as part of the welcome series will ever convert a customer. And you know, after that it's like, you know, it's kind of tough. So as far as like on the retention end, the first thing is kind of like what we talked about earlier, right, where it's like the transactional shipping emails are such an unbelievably overlooked component to the email program that it's not a basic template in Klaviyo, like you wouldn't even know to create it. You have to like use maybe like a wonderment or a malomo, you know, to kind of ingest a lot of those properties from Shopify over to Klaviyo. But like those are hugely important for retention because again, we on the retention side, like, it's our goal to of course educate but also prime the customer to be, you know, to be excited about staying with the brand, to know why the product's gonna work for them. And so we use these emails now. We'll push down a lot of the transactional content, like the shipping and order details towards the bottom of these emails now and we'll front load them with your journey over 12 weeks. And also for some brands, maybe there's a difference in intensity of flavor or effects that you might experience by using the product at different dosages or whatever or like different mixtures of like maybe water content. So we'll kind of like load up that educational content so that the very minute they actually receive their product, it gets delivered. They know so much about the product, they know so much about like what's ahead for them that, you know, it wouldn't even matter if we sent them another email as part of like a post purchase onboarding flow. Like they would already know like what to expect, what to look for and what to stay for I guess, for that matter. So those are super important. And then of course, you know, something we're also exploring right now is like master classes. And what that like tactically means is like as a customer who kind of, you know, subscribed or like starts their journey with the brand, we'll set up a really interactive onboarding flow or experience that we're doing in type form that you know, we're linking out to from like post purchase onboarding emails. That basically is like a nice way because like if you think about an email, right, you know, not everybody's going to open the email and then not everybody's going to even read half the email. They probably just read like the hero section. So how much can you really fill up in that email? It's like there's not a lot to work with right. And so we'll link out to this Typeform experience where it's like you're just, you know, you're keeping the user engaged by having them click buttons to, you know, get to through to the next page to learn more and more and more about the brand, to understand the brand pillars and you know, how you'd even like plug in some type of form, like master classes into show notes for people to get a look and then I guess like after that experience of you know, of course, like I said, upcoming order emails, like wildly important for kind of what I said earlier, you don't want to make it transactional. You also want to segment that flow, which a lot of brands don't do by order cycle so that you can, you know, control the content that people would experience and like get from month one to month two and month two to month three, month three to month four and so on. Because again like the different, you know, benefits that one might experience, month one and might two might be different. And you know, we don't want to treat everybody the same there. We also of course on the win back side, something we're exploring is, you know, most brands will probably just have like a generic 30 day win back flow and whatnot. Again, I'm just going to focus most of this on subscription related win backs because that's like where we spend most of our time. We are analyzing like what makes up like a top 10 or 20% customer and then we are creating like a more structured like VIP flow for those customers that like, if you really think about it logically, like why would your best customers go down the most generic like win back experience? Right, because it's not really going to save them as well as it probably could have. If you like specifically address the customer as like, hey Nick, I know you've been with us for the last four months, you know, you've been one of our best customers, you know, you're out in la, blah blah blah and you know, we just want a chance to like chat with you and figure out what went wrong. So then you're setting up like maybe a customer interview or leading to another survey. We just want to like learn more and connect with those customers before selling them again into something else. Which I think is like, you know, a really strong way to approach winbacks. But yeah, I would say like if you want to like narrow it down to the most important flows, you know, those are the ones that I would focus on primarily on the retention side.
- [30:51]
A
I'm curious like where when you do these customer interviews. Where do you store and how do you store a lot of that information?
- [30:57]
B
I mean, we record everything. Right. And it's not, it's of course, like consent consensual. Right. Like, we're, we'll first actually qualify them through like a mini survey. So we'll send out, you know, an email and have them fill out a few questions, make sure that they're the right kind of candidate to interview, make sure they're opting into being recorded. They're most are totally fine with it and it's actually cool. You'll find that, like, when you interview customers, especially customers that really like the brand, even if they canceled, a lot of them just like, want more product, like, or they just want more kind of like gifts from the brand rather than like money. Which is kind of funny because, like, we'll offer like 25, 30, 50 bucks sometimes to get on these calls and they're just like, no, we just want more product. It's kind of cool. But anyway, we're, we're saving all those transcripts with an otter AI or, you know, one of these other kind of note takers. And yeah, Fireflies. I think Fireflow is actually the best, truthfully, because it has an mcp. Yeah, it just directly integrates with Claude. And then what we'll do is we'll match back the interview, the interview transcripts with what we're also finding in outer signal. And then we'll also throw in another layer of customer reviews. And now you have a really intelligent data layer of all this different customer info that's kind of plugged into one system. And then you can kind of create these, like, really strong ICP segments out of these. And by using or like, by like understanding your icps, you can have more targeted, like, ads, more targeted landing pages, more targeted emails, more targeted post purchase onboarding. Like, I mean, the list goes on, you know, and we're just seeing direct lifts and you know, in how that's like helping. So. Yeah.
- [32:36]
A
Wow, dude, that's so cool. You, you think of a lot of things that I would never think of when it comes to like running a retention program. What are some interesting insights you found through customer interviews that maybe like, change the game for, you know, like, have you ever found insights that, you know, you implement something from that and it just totally changes the game?
- [32:55]
B
It's a good question, honestly. I mean, a lot of, A lot of times, like, again, people are canceling, like, not because they didn't like the product, but, you know, maybe they Just like had way too much product. And we found that like, some of the people we'd interview were literally just like kind of playing like a Santa role, just like, literally dishing out all this product to their friends and family. And so like on, on our end we see somebody canceling, we're like, oh man, like, something must have went wrong. Of course, nothing really went wrong, but it's like you can learn more about like the, the consumption patterns and like, you know, what customers really do care about. Because like I said again, like, for a strong customer, usually they just want more product. It's hard to say like, that we've implemented something that's like been a game changer. Like right now we just kind of, you know, did this first experiment with, with one brand in the last like one or two months. So we're still kind of like piecing together the like, the kind of follow throughs. But again, like the biggest follow through or like the biggest kind of learning from that experience was just like truly getting an understanding of the customer, like ICPs. And by knowing the ICPs, we know exactly. We know exactly. Here's one thing, actually. We've extracted quotes from those kind of like interviews, and now we're using those quotes across ads, across the website, across emails, because now we know like, how these kind of customers talk. Right. So now you can like, put the brand in the same state of mind or like, you could basically like connect with the customer a lot easier once you're speaking their language. So that is something directly we're doing right now. But, you know, more than anything, I mean, think like, if you can scale something like this of like, interviewing, you know, enough customers, like, you know, it's just going to create more connection with the brand, but then again, like just more pattern recognition of like, what kind of customers you really want to bring in.
- [34:44]
A
Yeah, 100%. I don't know if you've seen how much the new like, voice models have. Also it's crazy or how good they've gotten, but like, OpenAI just released a voice model that can basically hold a conversation and respond instantly with emotion and like tone of voice and everything. It's nuts.
- [35:02]
B
The crazy thing is, like, I don't think customers will care that it's AI at a certain point, you know?
- [35:07]
A
No, not at all. Especially not if they're gonna get something at the end.
- [35:10]
B
Exactly, you know. Yeah.
- [35:11]
A
Yeah. Okay. And then before we jump to the next thing, I'm curious, what are the, like, how do you think about campaigns? So like, you know, I used to always but last time I did email properly personally was when I when I was at hint and we had this massive Excel sheet as a campaign calendar and it had you know, social, organic, social, paid social email, website, you know, any sort of like field marketing, PR stuff. And that's where we basically centered all of our like moments and then emails were basically built off the back of that. But curious how you think about approaching campaigns and then coming up with like what is the content? How do we make sure it's relevant versus just sending slot, you know.
- [35:52]
B
So I'll preface by saying we don't manage campaigns for, for clients right now, but we will however, you know, help drive kind of like the top level strategy for what we're looking for. In working with some of these brands, like some of the you know, brands like Inshydration and you know, some others that I mentioned, we've done some analysis to find that the like there is like an actual correlation between sending out emails, like sending out email campaigns to non customers and then driving down cac. So I think a lot of brands will like they won't actually piece together the days that they send these campaigns out to their kind of like broader like non customer list. And you know, they're all kind of like in silo like you have Facebook here, maybe you have North Beam and like North Beam shows a blended cac. But like you know what we would want to do is put it all into a Google sheet and be like here's all the campaigns we sent last month. And then what here's like the CAC on that specific day of the week or just like literally by day what was cac? And then we would literally we pulled this now across a variety of brands and almost in any case the days that we do send out a campaign, we'll see roughly a 10 to 11% drop in CAC on those days. That's not maybe like, I mean take that as like anecdotal data. Like that may not be the same for anybody listening to this show, but it's definitely interesting. Right? And so then again or then of course that kind of like presents a case for like increasing volume, right? So it's like if you are seeing if you do this, run this analysis and you find that you actually have lower CAC on these like campaign days, then it's like okay, which days of the week actually have the most kind of impact on that CAC number? How like much substantial data do you have here? Is it like just in a, in a one Week, one week cohort. Is it a month? Is it several months? When I do this, we're looking back like 90 days at least. Right. To, to really put together these like these patterns to make sure that like what we're presenting here is true. But then again, like I said, it's just like a volume game. So it's like, then we're working with the email team to figure out like, you know, how do we get out more emails without it being, you know, destructive to the customer experience or like driving spam. We don't want to drive more unsubscribes, all of that. And that can be handled. There is definitely a balance for everybody. But I'd say like that's one of the biggest learnings we found for sure on the campaign side. And then also just like being accountable to specific like top level KPIs and metrics on the email side such as like orders by new customers, orders by returning customers driven from email. Right. So we're actually setting goals. Right. Of like you know, here's how many email attributed orders we need this month to reach our target for you know, recurring orders driven from email for that month. Because it all ladders up of course. And so I think like adding accountability there where it's not just accountability of like revenue in a dashboard because like that's we all know at this point like it's just attribution so you're never really going to get the best data there. But if you have something like a turbo well or idea like a north beam, then it's really easy like to see which platforms are driving those sales and you know, setting like true goals and targets based on like the true kind of historical data.
- [39:03]
A
Do you have some brands that don't even send any campaigns? They just do.
- [39:07]
B
The best brands will send campaigns. So we do, I mean we certainly have some that are like more resistant because it's like, I don't know, I mean it's usually a bandwidth function or a function of like not having a good email team. But I would say like if you really want to do it right, you gotta be sending out campaigns again at least your non customers because you're just truly like holding yourself back and you're creating like a large dormant list if you don't email them. Yeah. So yeah.
- [39:36]
A
Do you advise any suppression for subscribers?
- [39:38]
B
Certainly, like I said, so like the majority of the weekly campaigns would not go to these subscribers. Right. To the active subscribers.
- [39:44]
A
Got it. Okay.
- [39:45]
B
In most cases we advise like only a handful of emails per Month to ever send to these kind of people. Because it's like again, what is really going to be additive? If you think about it logically, like if you're a brand that has €1 SKU and maybe some supporting SKUs and you email the customer to go shop again. Well, they already have product in hand right now. So it's like you're just gonna potentially get an advance on the ltv but at the expense of potentially like worse retention. Cause now they're have too much product, they're probably gonna go churn. Right? So yeah, no, we wanna be careful there.
- [40:18]
A
Yeah. So okay, so I'm curious now I wanna talk metrics. I actually don't know what are the metrics to focus on like when you're thinking about retention program as a whole, right? Because like open rate has gotten skewed. I don't know if click rate is ever accurate. Like I know some of the metrics got funky basically. So I'm curious, like what are the metrics to focus on? And, and then I'm also just curious how do you not land in the promo tab? Because that's what everybody's fear is.
- [40:45]
B
So I'll give you an answer again, that's not like an email related answer because like we don't really spend a lot of time like reporting on email stuff. The metrics that we look at from a retention perspective are true order retention. So if you go ask like 10 founders what their retention is, a lot of them or some number of them will probably tell you their subscriber retention. Meaning like for their active subscription customers, what percent of them are still active at the end of every month. And a lot of brands don't know that there's actually distinction between subscriber retention and order retention by subscriber. Right. So first things first is educating, you know, you or any or the brand is like order retention is a North Star metric that we're shooting for. Ideally looking at that on like a monthly kind of like level where it's like what percent of your customers who ordered, you know, in this month are going to be ordering next month. That's like wildly important as it relates to like your payback period. Right? So that's like the North Star for us. And then secondly is like ltv of course. So like how does LTV change with the order retention improvement or you know, the Deltas, there's you know, 30, 60, 90, 120 day three, you know, full year LTVs. A lot of brands or a lot of investors care about 12 month and 24 month retention rates as like it's obviously a really strong indicator. You have a, you know, a good product and a good brand. And I think a lot of brands kind of neglect the longer term retention lens of all of this stuff and they're maybe like more short sighted of like how do I force people into a second order with no retail email? You know, it's like you're probably going to help recover some of that CAC faster but at the expense of really destroying your customer relationship for the long term. So we're looking at those primarily and then we're also looking at churn rate based on active churn and passive churn, which if you stay ski or recharge, you could find this kind of data in all of those kind of platforms. Because obviously the more you can drive down the churn rate, of course in theory then the more you should increase your retention. Then we're also looking at churn rate by order cycle because typically the, the lower the order cycle, meaning like if you're on order one, approaching order two, you're gonna have a lot higher churn rate. Right. You know, in most cases brands maybe have like 50% retention month one or 40% or if they're really good, 60 or 70 or 80%. But as it, you know, as they mature, reach like month four, month five, the attrition rate really, really drops, really, really levels out. You're seeing sub 10% attrition month over month. Those people obviously have a lot lower churn rates, so you don't need to focus on them as much. But yeah, for any kind of newer brand listening to this, your churn rate might be higher if you have a smaller group of active subscription customers. That's just kind of how it goes. And the bigger your list, the lower your active churn is probably going to go. So we're looking at that, we're looking at pause rate, skip rate, save rate across the cancel prevention flow. Because effectively the more you can drive up that save rate, the more you're saving a customer from canceling. Even if they go to actually skip from that flow instead of cancel, we're still finding that there's not perfect retention for those skippers. But even if 60% of them go on to place another order instead of canceling at that prior moment, it's still going to be a win. So yeah, those are the metrics we're looking at mostly. And then in Klaviyo, I don't really look at it as much honestly. Open rate is they're all like becoming sort of vanity metrics. But ideally you have like a strong ish click rate of like at least 0.5 to 1%. A lot of brands are skipping lower now these days. Not entirely sure why but, but as far or probably because a lot of the bots they're like picking up now and how to like skip the primary or skip the promotion, Enter the primary. You just want to use a platform. There's one called Maverick that we use that I really like. There's another one called like Mailmand. But there's like tools now out there that essentially what they do is they install like a text script at the very bottom or at the very top of your email that to the customer's eyes they can never see any of this. But it essentially like tricks the inbox provider into thinking that it's like a, like a privacy policy update email, that it's like very transactional. And so, you know, because like they're reading the HTML version of the email, right? So like it's just like a script full of text that's all about that type of thing. They're gonna think, oh, this needs to be in the primary tab, you know. Yeah.
- [45:10]
A
Wow, that's pretty crazy. All right, so if I'm a brand and you know, I've like had this brand for a while, maybe four or five years, it's not like a hyper growth thing, but it's been growing slow and steady. I've got some subscribers, you know, maybe a couple thousand subscribers, but I feel like my retention program's just dead. But I've got all these emails and you know, I've had, I have a, like some subscribers left. We're still running a little bit of Facebook ads. Like what do you recommend? How do you, you know, I don't have really a pop up thing going. I don't have any good, you know, camp flows or I don't have like, you know, I don't have anything that I'm pushing out to subscribers. Like how do you recommend? I would re. Energize.
- [45:50]
B
I mean that's a tough situation. So is the brand still growing or has it just been kind of like,
- [45:54]
A
you know, still growing but like, you know, mostly flat, like maybe 5, 10.
- [45:59]
B
Okay. And then they have like a decent like subscriber base. You're talking about like email subscribers?
- [46:04]
A
Yeah, maybe like 40. Yeah, 40,000 subs in total or basically 40,000 emails, you know, and maybe like a thousand active subs.
- [46:14]
B
I mean there's not a lot of work with there, truthfully, because like 40,000 email subscribers, not a lot in the grand scheme of things. But yeah, you know, ideally you don't end up in that situation where you're not emailing those people for a while.
- [46:28]
A
Yeah. How do you, how do you prevent from becoming like a zombie, have just having a zombie CRM?
- [46:33]
B
I mean, it just comes down to like, like having bandwidth ultimately I think is like the biggest thing. So it's like if you see that you are losing bandwidth or the team that you're working with is not good and you're not getting the data you want. Like, you don't want to mess around with this stuff because like, the longer you put it off, the harder it's going to be to like pick back up the momentum, go in the right direction, you know, and like it. It kind of essentially turns what would be an asset. Like an email list should be an asset for you. But if you have these people just sitting there for all this time, they're now essentially becoming more of like a liability or just like a depreciated asset at this point, you know, because they're not really going to be reliable in the case of like, if you want to go back to them and get them to order at some point, you know, it's kind of like fighting an uphill battle, to be honest with you. Yeah.
- [47:19]
A
I'm curious, like, you work with so many of the fastest growing, I think also fastest moving. Like a lot of the brands you work with are usually the first to try things, you know, and, and you work with just real killers. And so I'm curious, like, what kind of, what patterns do they have that you learn from or you admire or you.
- [47:39]
B
Yeah, I mean, I could just tell you like straight up from the brands at the top. The reason they're at the top, the reason get to the top faster than anybody is literally just speed of execution and the highest quality of like expectations for work. Right. There's like, you know, you can't get to a level of success of reaching a hundred million dollars a year if you don't try and test, you know, at the highest velocity that you can. Right. So if you, you know, on the retention side, we almost approach it like zero, where it's like, what kind of tests can we implement and track like month over month, week over week that are leading to improvements in retention and that further only compounds with the more growth that comes in. It can only increase the speed of which we're obviously like collecting the results of these tests and then of course now when they work it just further then compounds like you're now bringing in healthier new customer cohorts, right? And so I think like in working with these brands there's just like a high level of like pressure and expectation to continue pushing the boundary because you don't get to the top without testing a ton of things and you don't stay at the top without, you know, you know, continuing that. Right. And like I feel like everybody plays this game of like copying each other. You know in E Comm you just see somebody doing and you think it's like working and it's just not the case. I could just tell you like there's, I mean you know this probably better than I do. Like certainly there's elements you could take inspiration from from some of these big like Idol brands. But you know, like a Gruins buy box is like a perfect example, right? Like I've tested the Groon, the Groons buy box across a number of brands and it's like not worked, right? So it's like maybe it just works for their audience, not going to work for you. So you have to get creative and it really requires having the right people in house or like through kind of agencies to, to give you that insight of like what might work. I mean I think that's been the biggest thing. And then also just AI usage. Like again the brands at the top are really kind of instilling this like mindset of like, you know, you, whatever you think you are in terms of like how fast you are, how good you are, you are not using AI enough. And you know, you alone versus somebody who's maybe like 70% as good as you, but who knows how to use AI like a hundred times better than you. They're going to beat you every single day of the week, right? So if you could compound that across an entire company, across all of, you know, employees, all of the contractors, whatever it might be of just people who are savages using AI the right way, then now you've like drastically increased your output. You've drastically increased the level of like creativity and knowledge that now you have access to versus like the brands that are like, you know, more agnostic or just are like, you know, we'll get to it or we use it for like chat related questions. Like if you're just using AI right now for chat, like just like going to ask a couple questions which I do here and there's, it's not really going to be nearly as useful as somebody who's like Given their AI like a shit ton of context on the business and constantly feeds it that data. So it has that constant loop of learning. Like the Cody example is fantastic. Like it's literally plugged into all of his channels. So it knows the heat map data, it knows the Google Analytics data. It knows like, like everything it would need to know to give you really solid output. So I think like that's how brands at the top, obviously, even Jones Road, they're huge now, you know, are approaching this type of, you know, approaching their work. So.
- [50:58]
A
Yeah, fully agreed. I think you're right. Speed of execution is something that I always see and also like willingness to just try stuff, you know, even if it's not like on brand or, you know, too polished or whatever, but just like going out and trying things and the way that algorithms work and the way that the speed at which you can have feedback loops, like, there's no reason to not test the whole volume of things and let the data decide what to really narrow down.
- [51:26]
B
Exactly. Yeah, exactly.
- [51:29]
A
Cool. Well, wow. It's already been 45 minutes. Is there anything you want to finish on? Anything you want to make sure gets across or as people are building out their retention businesses, maybe now starting to think about some of the things you mentioned that were really interesting. Whether it's gifts on a delay, whether it's those four emails post purchase, whether it's, you know, the, you know, whatever it may be like anything that comes.
- [51:55]
B
Yeah, I mean, I think ultimately it's just like, you know, don't think of retention through a lens of like, you know, a single channel or two. Like, retention is a very holistic function that touches so many different aspects of the business for that matter, probably every aspect. Like, we didn't even talk about customer service, but like, customer service is a huge. Can be a huge lever or a huge detriment to retention. We've seen it on both sides, on both ends. Right. So, you know, basically like, let's say a subscriber reaches out to your brand is like, I want to go cancel. Right. The really friendly brands are like, okay, you're canceled, like just like that. Right. And that compounds pretty significantly when you look at the retention data or the churn data. You can see churn by like admin. Right? By like basically like a customer service agent or churn by user. And so ideally the distribution of like churn events mostly comes from like a user turning on their own rather than like a customer service agent, like canceling for them. The reason for that is we can first collect Like a reason for cancellation over customer support and provide a treatment, right? Like, you know, respond back to the customer with empathy rather than just like transactional related like macro. People hate when they know something's like a macro. You know, I get it sometimes and I'm just like super pissed off. Not to say that you should like have all of your agents like handwrite every single message. But it's like maybe there's parts of the message or even just the first line of the message that's like, you know, directly at that customer for that customer. And so we'll like collect the reason and then we'll give them sort of like a save offer through customer support. If they don't want it, then we're saying, okay, no worries, you can go cancel your subscription with our, you know, our self serve platform, our self serve portal. Here's a link to go log in and do that on your own. And now we know that they have to go log in and to go through the entire cancellation prevention experience. So there's still a percent that we're going to save them there. So just say like as a very quick tip, if you run a subscription brand, you definitely want that to be more so your strategy than just like quickly canceling somebody. What else product? I mean like I think goes without saying, like if you don't have a good product, even though most founders are very biased that their product's amazing. I'm not here to say it's not or you know, your product's not good, but it's like you know, just primary example working at Feastables when I was hired, I mean they brought me in because retention was really bad, right? And retention for a chocolate brand will never be as high as retention for an AG1 or, or an imate, right? Because like that's like a daily supplement versus like a chocolate bar. So you have to first understand there's like ceilings to retention that, you know, some brands based on the category they're in will just never have the same retention. And you just have to know that. But you can still reach the top level of that bar right through like the right kind of work and the right strategy. So at feasibles we learned that like only 3% of our audience cared about better for you chocolate. Right. And you know, that was probably the biggest unlocked redemption we've ever discovered where you know, we, it led to a reformulation in the product where it was mostly now like milk chocolate based rather than like dark chocolate. And then we had like the full rebrand and after doing that and putting in the time to do that, almost immediately, the cohorts that were coming in were significantly higher in terms of retention and customer quality. We're seeing like over 100% increase in retention across like the first few months after order, after their initial order. So product's huge. Don't, don't discount that and don't do these, like, shady tactics that, you know, force rebuild people into a second order. If you want to, you can. I mean, you're definitely gonna see higher retention on month two, but you, you typically see a significant drop off on, you know, month two to, or, you know, to month three. So there's a lot, there's a lot better ways to do that stuff. But. Yeah, I mean, I guess that's kind of it. I don't wanna. Yeah, I don't wanna.
- [55:44]
A
A lot of gold here. A lot of gold. Amazing. Well, thanks for coming on. How can people find you? Where can they email you or reach out? If they wanna, you know, get in
- [55:53]
B
touch, they can Visit the website boringecom.com we call it Boring E Comm just because, like, retention is typically far more boring than growth. But, you know, it's the stuff that we love doing. You can find my LinkedIn Joseph Siegel. Find my Twitter ecom at underscore. What is it? Ecom Underscore. Joseph. Yeah, find me chatting online. Feel free to reach out and, you know, happy to help.
- [56:12]
A
Amazing. Thanks for listening. We'll be back next time to cut through the noise on CPG retail and E commerce. Commerce. If you enjoyed this episode, why not share it with a friend? And be sure to subscribe wherever you listen so you don't miss the next one.