Aaron Conant 0:18

Happy Tuesday everybody, my name is Aaron Conant, I'm the Co-founder and Managing Director at BWG Connect where a networking and knowledge sharing group of 1000s of brands and we do exactly that we network. And now we share together to stay on top of the newest trends, strategies, pain points, whatever it is that shaping the digital landscape as a whole, I talk with 30 Plus brands a week to stay on top of those. That's everything from startup, the fortune 100, it's every vertical from CPG to fashion. If anybody ever like to have a, you know, just high level conversation and what's going on, you know, don't ever hesitate to reach out, we'd love to have a conversation with you. That's actually how we get the topics for these events that we do. You know, if anybody wants to list if you're not on it of upcoming events, we'll do close to 250 of these next year, and probably close to 100 in person dinners. So you want to be on the list for any of those, just let us know, a couple of housekeeping items as we get started here. First off, you have any questions along the way, don't hesitate to reach out via the q&a tab there the chat you can drop them in there and you can always email me Aaron@bwgconnect.com we'll get as many questions answered as possible. And for the email, if you have questions, maybe an hour after the call tomorrow, next week, don't ever hesitate to drop them in there, we got a great network as a whole, we can usually get you an answer to your questions in under a day. So never hesitate to reach out. And that's everything from pain points to partner selection. We're asking everybody Hey, who's working for you and who's not. And that's the only way we find like the top people to invite onto these calls to kind of network and knowledge share what's going on in space. And so the other thing just to cover it really quickly as we're starting this at three to four minutes after the hour. And just you know, we're going to wrap it up with at least three to four minutes to go want to make sure we give you plenty of time to get on to your next next meeting without being late with that. So I want to kind of recap though, how we got here to this topic as a whole. And, you know, a lot of conversations I've had with brands, I'm over indexed on Amazon is what they're saying, Where do I go next Walmart stubbing their toe target is very selective. International expansion is a little bit tougher than we thought it might be. But it's still, you know, top of our radar, we really are thinking a lot about our direct to consumer site. And now the number of topics and conversation we have on the DC side is just blown up. And so a lot of questions, you know, across the board around subscriptions, subscription technology and payments, just it's it's top of mind for a lot of people. And I I kind of what I'm picking up as a lot of that trend is the iOS 14.5 updates. And everything that happened is hard to get people in top of the funnel. But once you get them there, how do you lock them in? And so subscription side is just something that's top of mind. So we got some great friends, partners, supporters of a ton of brands, the network highly recommended and probably the top recommended people in the subscription space from the brands on the network right now. We asked them kind of jump on the line today. Hey, explain to us what's going on into the space, high level conversation across the board. We can do a deep dive on any of your questions. But you know, George, kind of kick it over to you if you want to do a brief intro on yourself and ReCharge, that'd be awesome. We kick it over to Baxter and then just kind of jump into the conversation sound good,

George Ishii 3:21

sir. Sounds good. Thanks, Aaron. Good to see you again. Happy to be here again. For those that it's your first time. I'm Georgie Ishii, I'm the VP of Product Strategy at ReCharge. I've been with the company since almost the beginning, started as an advisor, and then has recently joined the senior leadership here at the company. Actually, not recently, it's been almost three years. So anyway, my background, I spent 11 years in Silicon Valley, joined PayPal early on as employee 30, went through that whole thing, picked up the startup bug in in Silicon Valley, and then went on to co found five startups after that, including Yammer with David Sachs, and moved back to Los Angeles, California to help help ReCharge. And the interesting thing is I actually see a lot of patterns and similarities between early days PayPal, and early days ReCharge. So I'm really super excited about how we're we're empowering merchants to create subscription products. But we're also enabling new ways of articulating subscriptions and of creating real deep and loyal connections between brands and customers. So that's my thing. Baxter.

Baxter Roberson 4:41

Thanks, George. Everyone, Baxter Roberson, lead our product marketing team here at ReCharge, and unlike George relatively new, been here about six months. And like George said, I think there's been a lot of similarities to previous places of work that was formerly at a firm, the eCommerce financing company, at Bain and Company a management consulting firm. So it's really interesting time to kind of see that hockey stick of growth and adoption, where we're at. So it's gonna be a fun conversation today.

Aaron Conant 5:10

really quick, just a reminder, you have any questions, anything in this space whatsoever, drop into the chat, the q&a, or just email them to me, aaron@bwgconnect.com. So, I want to kick this over to you first, George, I mean, Baxter you guys, we can all jump in, you know, across the board any point in time. But George, this, this is a topic that rarely came up 15 months ago, just in all reality, I'm talking to 1500 brands a year. It's not coming up, and all of a sudden, it's gone through the roof. You know, how do you trace back to? Why is this coming up so often? Right now? How many different you know, product categories? Are you seeing this apply to? Are there any new ones that that you are you're shocked over on your side? But you know, kind of a two fold question there is, the first start is like, why all sudden? Is this coming up all the time?

George Ishii 6:00

Yeah, I mean, I think I think it's, it's always been in the minds of great direct to consumer founders and marketers. But I think it's it's sort of been top of mine more recently. Right. And I think, I think a lot of that is a couple things. Number one, it's it's the fact that we're seeing a lot of breakthrough direct to consumer brands that are selling primarily subscriptions. And so those those actors, sort of Lighthouse brands and Lighthouse stories that get other people really excited. And then along with the lighthouses Comm, like the case studies, right? Where they were, they're talking about the virtues of a recurring relationship with the brand, they're talking about LTV members that are through the roof compared to single purchase customers, right. And a lot of a lot of them as you you all out there know better than I, a lot of times the the cost of acquisition is very similar, right to from for one time customer to a subscription customer. And so the business equation just looks really, really, really well. But I think we've all known this for a long time. But it's it's it's more recent, the top of mind, because there have been breakthroughs. I think the second thing is that there's just a lot more flexibility in the programs that you could set up. And and the variety and the level of customization that you could, you could articulate to your customers, right? So at the end of the day, it's it's not Amazon, right where it's, it's, you either choose the radio button for buy at one time, or you choose the radio button for Amazon to charge you over and over again, right? It's not really about that, I think what most of us realize that it's not as simple as creating two radio buttons. Right? That doesn't work, right? sophisticated customers see that. And they just completely stay away from that, right. And so through the ReCharge API, right, so it's been getting a lot better recently, uh, definitely over the last 24 months, there's a lot more flexibility in the ways that you could create like, a customized customer journey that doesn't feel like a subscription, right. And so you could you could get them hooked in through a variety of products, but you could start customizing the journey, and the products that they see over over over this quick journey that they're going through. And then in the very end, you could you could present a very customized product for them or program for them, that doesn't feel like, Oh, you're just going to charge me over and over again, I feels like oh, you really care about me. And you've created a tailored product suite for me to get into that makes a lot of sense to me. And it's not a one size fits all. It's very customized. For me, as a consumer, at the end of the day, it's really about striking emotional chord with your customers and making them feel like you care about them, and that you're tailoring an experience for them. And I think through the API, the successful merchants have been able to create that differentiation, that that psychological and emotional differentiation between two radio buttons and a fully customized program that you created for me.

Aaron Conant 9:20

A couple of questions that just you know, popped in around that is because a lot of people think this is and I'm just going to blend two questions together. They think this is you know, there's an out of the box solution. You just click it data from the app store, like in Shopify, if you want to go through like the pros and cons of pay, you know, out of the box solution versus a customizable the API. And then you know, how do you guys think about it and address it?

Baxter Roberson 9:46

Yeah, having jumped on on this one, George, but I think there's, there's a bunch of different models for folks that are in this space. We've got what we call more of an out of the box type solution, which is something that's just plug and play, which we of course have on a few platforms. There's a few benefits to that the obvious ones your cost speed to market, it's something you can turn on tomorrow. Like George said, you can get the radio buttons really quick and like honestly be set back a level, just offering subscriptions is still a extremely valuable thing in this space for, you know, we saw the McKinsey report, you know, from the 20s, to the high four hundreds in billions of dollars in next five years, everyone's aware of that kind of stratospheric growth, we've seen that continue the last year or two. So just adding that if you're trying to get subscriptions and get up to speed, I think it's a really, really valuable thing, right. The downside of those is, obviously, there's a lack of customization or support. That's where some of the API solutions come in. But I think the things people don't think about with kind of these stable products a lot of the time is that this is a really fast moving pace, you've got payment tools, subscription, billing tools, merchant tools, your portal, the shopper tools, the thing that customers see analytics tools to to think about that differently from one time purchases. So there's a lot there. So one of the biggest benefits of those kind of standalone products is that they're innovating at a pace that's like, like we're doing now really fast. And you get that for free. It's what George is talking about. Around the API side of the house, there's really two or three different models there. There's one which is just using API's of a payments company. There's working with custom shops that build it for you. And then of course, the agency model, which we do as well. But obviously customization, you there's great levels of service. there as well are the big, big upsides of that. But you there's, there's some downsides to that around maintenance, right? If you're, you've got to be the person on the hook for making sure everything works together, integrations reinventing the wheel, right, you've, you've got to build all the things that are already plugged in place. So you know, we got colleagues a few the differences. But for us, that's why we kind of chose to go after that hybrid model of having a standalone products, the best of both worlds, you get everything that is kind of our standardized, or state of the art that then you can customize on top of it. So that's one of the ways we differentiate, but we're a little biased, obviously.

George Ishii 12:07

Yeah, that makes a lot of sense. Thank you for mentioning that Baxter I think one of the things I wanted to add is that as a product principal, we actually like to launch our products for like the entire spectrum of our customers. And when I say spectrum, I mean the maturity of their brand and of their stack they built right. And so like Baxter was saying we have a complete either box solution that will will give you subscriptions, you could set up in about 30 minutes, honestly. And you can have subscriptions and start selling within 30 minutes, right end to end. And so that that's sort of a turnkey solution. And then to me, the way that I like to see it is I like to see it as what, what we want to do is we want to create the levers that you need as a brand to control the things that you value most. Right. And so there's probably at least a half a dozen main levers that you can start controlling based on what is sort of like the maturity of, of your brand, your product and what you value in terms of your tech stack in terms of your your website stack, right. So you know, if you want to dive into creating a user experience and a journey for your customers, you could do that, if you want to dive into a subscription management destination, which is our customer portal, you could focus on that, if you want to jump into Klaviyo integration and email marketing, you could do that if you want to jump into SMS, and this new way of of, of connecting with customers, you could do that. So there's many levers. But I think the thing is, is that we you start very, very low barrier entry, you start and then you can examine those things and say okay, the things that I value most the things that I want to accelerate first, I'm going to jump into start customizing. And so it's it's really interesting to look at our entire population and see the different ways that customers have started or merchants have started to customize their their ReCharge installation. And there's there's a million different ways that they've done that. And we like to, we like to sort of create this product that works around the value proposition of our customers.

Aaron Conant 14:13

So I want to jump in there really quick as you brought up another major theme. There's this you know, emails always been around, there's been direct mail, digital age direct mail, it's really blown up over the over the past year or so. But then there's SMS, right? If you look at a abandoned cart email will say it's open in 72 hours if it's opened at all attacks has opened up in you know, three minutes or less. And you guys you know, had acquired electric SMS, right, like thoughts on like, how are you utilizing that like was, was the thought behind? I mean, I love it, right. I mean, it's this next level for a huge customer base across the board. We'd love to hear your thoughts there. That's super interesting.

George Ishii 15:00

Yeah, yeah, I could jump into that. I mean, looking back into that, I mean, I drove the product side of the acquisition, and the due diligence side from ReCharge started months before the actual acquisition. Right. And so about six months prior to the acquisition, we sort of were thinking about, like SMS and seeing how it was, we were actually seeing how promotional and marketing SMS was really taking off in the eCommerce space. Well, it had already taken off, right, but this is, this is long before clay VO, for example, really started pushing SMS, they had an SMS product, but they weren't pushing it right. And so there are a lot of giants in the industry, who are moving promotional SMS. And we're thinking wow, like, Kramer does a great job of that. And I think that's where it belongs, right. But then what we realized is that is that ReCharge has the opportunity to think through transactional SMS, right. And so transactional SMS is basically there's a reason why we're reaching out to you something occurred at the account level that you need to know about, right? And so on one hand, you could see that as just, you know, a ping, that goes up to your customer that feels very task driven, right. But what we realize is that SMS is a much is a much more personal communication channel than email. And we realize that customers almost feel like it's a it's a person on the other side of a text of an SMS versus email. And so we realized that transactional SMS in the context of ReCharge is both transactional and human. And then, and then all these things started coming together, because we started realizing that the main goal of recharging see from our webpage is to turn transactions into relationships. And we realized that wow, like this, SMS is really like a conversation, a person to person conversation, and it feels like that. And we have the opportunity to create that, that that reality. And so all of these things started coming together. The other thing we looked at was LTV, we looked at long term LTV. So we assess all we assess the customers, all the customers that electric SMS has had. And we looked at the LTV of customers who used SMS versus customers who didn't use SMS. And with a lot of these larger merchants that had certain characteristics, it was a no brainer. Like the the, the longer term LTV of those who were engaged in SMS was much, much greater than those who didn't engage in it. And so from a lot of different ways, and a lot of different angles, we really believe that this would be a great, this would be great to bring on inside of ReCharge. And then the other thing from a strategic standpoint is every, you know, electric SMS had dozens of customers, right? And we realized that we could take this great product and offer it to reach large customers. And you know, that classic, you know, take a great product that doesn't have a great distribution channel and drop it into a larger distribution channel that doesn't have that product that needs it. And it's a win win for everyone. And so that was sort of the, the the journey for the electric SMS acquisition.

Aaron Conant 18:32

It's just, I'm getting this, you know, this theme that's come up like Digital 2.0, right, and we're there. And we gather faster than we thought we would. And it's just, you know, I every, every week, I'm learning something new that that takes us to the next level by by this time this year, next year will be digital 3.0. But the fact that you as a subscription business getting into, you know, the SMS space, but that's just the next level, right? The constant moving and iterating and upgrading to say, hey, we need to pivot and move so we can have an active communication with the end consumer because you're talking about, you know, personalization, right? No, Baxter Baxter, I'd love to hear your thoughts on that as well. And then there's a couple other questions that I want to make sure we get you just reminder otherwise keep dropping them in the chat or the q&a. And and we'll get to those questions as well.

Baxter Roberson 19:19

Yeah, I think it's a it's it's your points and especially good fit with subscriptions, right? Because you're the things that keep someone around with a subscription and increase that LTV are things that make are made easier by text, right? So someone's going to swap a product out, they're going to skip a delivery one time, they're gonna add a one time purchase, just you know, things that are additional to the the every three months every month system they're on. Even the old world, they'd have to go to the website, they'd have to log in, they would have to go, you understand their patent member their password, right? That's always a big one. Maybe ping your customer support a little bit, but this time, it's just to get them on text, they look at it and say, okay, great, I can make the change with press one, two or three. So it, it really is a no brainer From a logistical side. But as George said, it's that relationship side, I think we've seen a very big change in the way customers are thinking about subscriptions. You know, one of the we're working on our 2022 state of subscriptions report, right, we do one of these every year. And one of the most fascinating things we're still digging into is that we see far lower churn rates across all 15,000 Plus merchants everywhere over time. And I'm sure some of that is intrinsic to people. The the ability for us to offer different products and ways for them to use subscriptions, but some of it, I think, is customers adopting subscriptions and understanding the value there. So with that text kind of interface, like they're, they're able to have, like George said, that interpersonal relationship with someone and able to just make it super easy, which, ironically, is leads to higher LTV over time.

Aaron Conant 21:02

You know, if, if we kind of keep going down that path of like, so, you know, SMS and bringing it in as a whole, but overarching trends, right? If you're looking at you guys deal with so many different brands of every different vertical that's there? What are like? What are themes that you're seeing that you're pulling out where best in class brands have built something in a subscription side, maybe from nothing? or enhance what they currently had? What are the overarching like, you know, I don't know, best practices that that you see that have come up because it's it's a different landscape than it was 16 months ago? We'd love to hear your thoughts there.

Baxter Roberson 21:44

I mean, I think there's to George's point earlier, too, it's a very specific thing to each vertical each situation. Yeah, I think one of the interesting, interesting things we've seen is like different models of subscriptions, like George said, the typical model people think of when they think of subscriptions is replenishments. Right? It's, I bought my deodorant amount of it, I wanted, again, replenish it for me. But I think there's there's a few different versions of that too. There's curation or bundling, right? I want a bunch of things in a box, or even just I want these five or 10 products each month, maybe food subscription, something like that. There's you access types, type or subscriptions or memberships, might be another way to say it, where, hey, instead of actually buying the product, you're buying the ability to then be part of a, you know, a membership, that's going to let you buy a product at a discount or get early information, that sort of thing. And so I think some of the best practices, you're tactically speaking over those, like, you could go down the list of, hey, let's make sure it's visible up here, you communicate this way. That's something our account management team lives day in and day out. But at the macro level, to kind of keep the conversation there, we've seen folks innovate about ways that you subscription. So it's not just, I'm offering new product every three months anymore, it's can now I've got a membership program that's like black rifle coffee, for example, they now give out coins getting speaking to their military heritage, around you the amount of time you've been a subscriber, and then a gift of you know, six months in, and things that are really keeping people around and keeping them happy, being the first people to try a new line of coffee, that sort of thing. So they layer that on top of their traditional subscriptions. Offering and that's that's kind of making a difference for a lot of folks. And the last thing I'll say about that is that we've seen, you know, with those different models, we've seen kind of their stabilization and churn rates too. That's another fascinating thing from that 2022 report where with subscriptions, because personal relationship, and people really are interested in the company itself. We've seen a really interesting thing where each cohort kind of stabilizes at 30% churn in the long haul, no matter what we've been tracking folks for multiple years now. And you get this small percentage of the cohorts that just doesn't go anywhere. And I think that's a testament to the each merchant kind of incrementally adding new ways of utilizing their subscriptions. But it's been a really fascinating thing for us to see.

George Ishii 24:08

Yeah, and at the end of the day, that that cohort of law, that loyalty cohort is sort of the goal, right? That's, that's what everybody is going by me. That's one of the most common questions I get asked, right, what's the best way to identify throughout the entire journey, who my loyal customers are or who they will be for which customers will be those loyal customers, right. And so that's something we spent a lot of time thinking about. And as Baxter mentioned, memberships, memberships and loyalty are actually very similar. They're different words, but at the end of the day, it's identifying your most, you know, engaged customers, right at the end of the day, and so I would agree that memberships is a really members of SaaS loyalty is really interesting modality that a lot of merchants are starting to look at and starting to use. And I don't want to call it memberships or loyalty because I want to challenge the definition of that. Right, I want to, I want to talk more about identifying your most engaged customers, number one, identifying them. And number two, seeing if you could, if we could, you know, widen that that sliver, right, because unfortunately, it's a it's a narrow sliver, right. But what can ReCharge do to help merchants widen that right, and to convert a larger percentage of their population, to loyal customers, right. And so you normally think of memberships as this thing that you pay a premium for. And it seems really expensive, right. And so there's a very high barrier to entry for it. But one of the things that I've seen merchants use is to flip that around and make a very, very cheap, very, very affordable membership monthly subscription or a monthly membership fee. Where it would be something like $5 a year, right? And then connected to that there would be things that are perceived as very valuable, but maybe aren't that expensive for the merchant, right? So for example, free shipping, right? For your for lifetime for five or $5 per year, or maybe it's $10 a year, right? And when you look at how much how much Amazon Prime costs, that seems really, really cheap, right? And so you opt into that, right, but maybe the merchant knew that most of the people in that cohort would not purchase more than once, right. And so, so So it's sort of an equation that they had had using data that they made as a safe decision, right? But anyway, my point is, is that it's a very, very low barrier to entry, maybe $5 per year or $10 a year. And then what that really is, is, it's, it's a way to identify your most engaged customers, because they will self select, right? Only the only the customers that in their mind have made a commitment to your brand, would actually opt into that. So maybe it is a lost leader, right? Maybe on the shipping, you lose 15 or 20 or $25 a year, because they make multiple orders per year. But in the long run, you've identified your most engaged customers, and what is the value of an engaged customer, right, when you're when you're aov is $40 a month, right? And some of these brands have greater than 12, month retentions. Right. So like you take cost of acquisition, and then the last leader attribute of this membership program, and you still might have a net positive equation.

Aaron Conant 27:47

I want to draw on that, you know, just you're talking about data, right, and customer data. And I've had more conversations on CDP's in the past, you know, three months, and I've had in the past, you know, four and a half years. And so how do you guys look at data? You know, how are you grabbing, additionally helping sift through it? Like, what are you guys collecting? How are you using it? You know, how do you build, you know, the next best mousetrap that's out there? How do you how do you guys look at that data piece, because I think that's a serious added value. If you're able to pull additional data out, right, it's beyond the day we get into subscription, we can make sure you know, the lifetime value of the customer goes up. This is new added piece and digital 2.0 of data. We'd love to hear your thoughts on on how you're handling that.

George Ishii 28:38

Yeah, I could grab that one Baxter and then you could follow up if you had any, any other points. Because this is this is this is like, this is one of my things, right? So we have a an incredible amount of data on the ReCharge platform. And we're just we're collecting a lot of information. It's not it's not just about transactional data, right? Every every transaction that happens on ReCharge is probably 100 different data pieces, right? And then what happens is that on an ongoing basis, the customer continues to interact with the brand. And every time the customer interact with the brand. There's more data pieces, right? So for example, to give an example, if you buy a subscription for coffee, you make that purchase on April 1 And then towards the end of April, you'll get another SMS or email that says your your your first your second bag of coffee is about to ship, right? What do you want to do? And then there are some options that the customer could do or they could just let let it go right? If the if the customer decides to do something and visits their customer portal to manage their subscription to change their flavor to swap to change the date, or if they do it via SMS, we have a whole we have dozens more interact interaction data points on the behavior of the customer going through our system right additionally, If, you know there are some upsell opportunities throughout this process throughout the whole journey, if they are upselling, or down selling their subscription, we have all of this information, right. And basically like what we want to do, because we want to empower brands and merchants, to understand their customers more better, and to create a more customized experience for them, because at the end of the day, that's what we have to do. Right? That's the that's the key to long term engagement. And higher LTV, is to customize that experience. And the only way to customize the best way to customize experience is to listen to your customer, that's all the data points. And to understand your customer and understand your your customer is taking all those data points, and comparing them to your other customers or comparing them to industry milestones or industry benchmarks, right? And then to go and create to respond with the customized experience based on all of that information. Right? So it sounds really complicated right now. But what we're doing at ReCharges is we're trying to simplify that process end to end to synthesize it down to a few different checkboxes that merchants can make. Right? As part of the the out of the box solution, right. And then as we were talking about earlier, have an AI the box solution for data insights, but then also have on the other side of spectrum of fully customized version and way for merchants to have access to the the basic fundamental data that we use to bring out these insights so that you could tailor it according to what you value and according to what maybe what algorithms you believe would would lead to the best outcome. Does that make sense?

Aaron Conant 31:49

Yeah, I think it's, I think it's awesome. You know, the fact that you could say that your you'd send a text and they could downgrade their subscription, they could swap out what they're going for, which kind of messes up on the back end, maybe your supply chain, your procurement, whatever it is amount of inventory, you have anything, but you're engaging the customer, you're developing that relationship, and you're gathering data from multiple touchpoints. Right. And it's like, how we're going to make the most out of this. And that's where I think you get the lifetime value of the customer. They feel they're more engaged. And it's like, you could potentially be losing cash temporarily, but you're pouring into a relationship. And by the way, you're harvesting data points out of it. So anyways, I'd love to hear your thoughts there I

Baxter Roberson 32:33

think to to like reframe the way people think about the subscription a lot of the time they think here's my product, and I'll throw a subscription on top of it. Whereas the subscription itself is often the product in and of itself, right? It's it's your experience. And so I think with that data, this is new, and no matter, you we like to pride ourselves in making sure we can translate best practices in different verticals, with our account management team. And just make sure that we can advise people because we've seen it a bunch, but at the end of the dates, your data and your situation. So for you to be able to understand really quickly, okay, most people actually want this frequency, when you talk about them swapping or replacing people value these things when they swap people value, that attribute of this product when it comes to a subscription. The Grid, a new phase of subscriptions is a guy's an entire industry. So to be able to learn and iterate really quickly is really important now. So I think that's kind of one thing we try to coach people on is think of subscriptions as a product. And that experience is just as important as a thing. You open the box and see. So that's one piece. But with that, you know, to George's point, I think we get real excited about a lot of things we can do do with that. Because when you have that scale, you can start to do really interesting things around predicting when someone might churn and you know, what we can do or you playbooks that you can run to make sure they don't now that we've seen some pretty incredible LTV boosts based off some of that stuff. But you know, don't want to get ahead of it. But it's it's the data in this area, especially since we're so new couldn't be more important.

George Ishii 34:05

Yeah, I mean, at the end of the day, we have to find ways for merchants to drive revenue, right to optimize revenue, to drive revenue, to open up new ways, and to give to provide more tools in order for you to get there. And we have to do it in a way where we meet, we meet the merchants wherever they are along the journey, right and so so we're constantly pushing the the envelope. But at the end of the day, we act with conviction around optimizing LTV and pushing LTV and finding new ways of doing that and creating tools that are very easy to get there. And so that's sort of an ongoing thing. Inside of ReCharge, right worth, we're thinking on behalf and hopefully, we're aligned with you. Hopefully most merchants do want to optimize revenue they paid so it's extremely expensive. And now, to acquire customers. It's like, it's like 10x what it used to be like, not probably, like 18 months ago, like, it's, it's only gonna get worse, right? So we, we feel that pain, like, we definitely feel that pain, we talk to customers every single day about this, right? And so we act with conviction to, to ensure or to try to really push the envelope, you know, to try to optimize the LTV of these customers that you spent so much money to acquire. Right? Like it's it's not easy. It's not it's not an easy game anymore like that some sliver of time it was easy, right? But it's not easy anymore. It's and the writing's on the wall, it's, it's getting harder and harder. And so one of the things that we're spending just a lot of time on, is retention is focusing back in on your existing customers, the customers that you're acquiring today are extremely valuable, the customers that you feel like are in the land of the living dead, right, who've made one purchase, or who maybe visited and had a cart and did it cart abandonment, focusing in on those and seeing those as a huge opportunity to to potentially monetize. But at the end of the day, like I think, like the the loyal customers that are still engaged are extremely, extremely valuable.

Aaron Conant 36:22

So quick question comes in. Oh, totally agree. And I think that's a huge focus across the board is I spent so much more time effort, money, content, everything to get them on the website. You know, how do I get? How do we get them to convert at the highest value possible and still develop a relationship and don't feel like I'm just trying to milk the end customer? As much as I can. Question comes in, how important do you find that subscription frequency is, you know, how do you test for this? You know, we recently launched a subscription business, which is quarterly, shouldn't be monthly. I'm just extrapolating the question a little bit, you know, should it be monthly, AV testing is all over the place, it's nonstop, it's here to stay on everything, you know, do you guys ABX testing, you know, in this space as well, like, how do you find out what's the right subscription frequency?

Baxter Roberson 37:19

I can I can jump in on that one. I think for us, we talked about before it's about, it's about trial and error, right? It's predicting that we've got, we can look and say, Hey, listen, we know someone in that space. This is what your what's worked in the past, we can start there. But that's probably one of the biggest applications to reach our SMS in my mind is that you can you know, since it gives someone the ability to make those changes themselves, you don't turn that personnel because of some artificial rigidity to your program, right? So we've actually seen situations where we go into someone and we say, started three months, they started three, and then everyone goes to six. And you know, 60% of their folks in the plans do that. And they instantly just reset it six. So they don't even have to set up a formal AV testing framework. They're not to deal with all the effort there. They just literally do it and watch it adapt. So that's one thing I'd say, too, is that you do it. I think the frequency is really important, but also the way you offer it. Looking at that question. It's it's around non consumables. And I think that you've seen the difference, your membership like not to use the word that George loves memberships and loyalty programs. On top of that, the more important those areas versus the bread and butter consumables, you'll see a traditional program working better.

George Ishii 36:35

Or that experiment prior that experimentation is just send like send, what you could do is you can send traffic directly to PDP pages, product details, pages, for different bundles for different products, right. So you can send some to a monthly subscription product and some to a quarterly by default. And maybe you could have multiple choices, but you would just default to certain ones, and then measure the activity. And so I've seen I've seen brands experiment with as little as little as $1,000 and in ad spend, to send to different cohorts and or different destinations, and to be able to test the efficacy against that. But yeah, there is even with the very mature brands, there's a lot of factors point there's a lot of experimentation in this area of like how you bundle what the intervals, pricing, right? So there there might be, typically there's actually a, a, there's a there's a discount, right when you do quarterly, when you go from monthly to quarterly when you go from quarterly to semi annually or semi annually to annually. Typically there's discount there. So there's a lot of levers that you can move. But there's, you know, there's there's no there's no real like if you have a lot of data. If you've been in business for a long time, you can actually evaluate the repurchase behavior of your past customers. So you'll be able to connect customer ID or email address with multiple purchases over time. And you can look at that behavior as well if it happens, and then you can draw out interval from that. But that's only if you have a lot of data in your past. I'll just the second one too, if you want Aaron.

Aaron Conant 40:23

Yeah, I'll read it. Because I'm going to reframe it just a little bit. Okay, for this because I get to put myself in the brain, which is time, effort, money, I need to you know, last year, everybody got a pass and a lot of stuff they did in digital this year, any investments, paid media tech stack, whatever it is feeder been held to the fire around, hey, was this worth it or not? So you know, the question comes in, if you don't already know, your LTV, how can you project ROI? You know, the lift that comes in is a subscription, right for your brand? How do you measure success for your brand? So, you know, it's that when you engage with the brand, how do you address these? You know, because I'm sure, I'm sure you, you have to and you're being asked this question? How do we know it's worth it? At the end of the day?

George Ishii 41:12

Yeah, I think that's I think that's a good question. Um, first and foremost, start measuring your LTV. That's extremely, extremely important. Right. It's, it's, it's probably, it's probably the most important aspect Besides cost of acquisition, right? And then, and then second of all, but I understand what the question might be, the question might be, if you don't currently have a subscription product, and you're thinking about converting them into a subscription product, how would you even know what LTV looks like? Right? And one way as Baxter mentioned, we have a white paper or whatever you call it, Baxter. This, the state ReCharges state of subscription eCommerce report. It's it's free, and it's downloadable. And what you'll see in there is you'll see some, you'll see some benchmarks for certain industries. And I think you can tease out of that, you know, some of the opportunities that your industry might have, as sort of as we currents. I think the other thing is, is like a lot of a lot of our brands actually develop their start developing their product catalog around through the lens of subscription and recurrence, right. And so, if they don't have didn't start off with a product that lends itself well to recurrence, then maybe they might start developing their product line or expanding the product line towards products that might work subscriptions might serve serve those products Well, right. So you know, part of the other thing that we want to do is ReCharges you we want to help you think about how you expand your catalog and how you evolve your products. If the goal is LTV, right, so for example, maybe it's it's sizing, right, like instead of a two pound bag of coffee, maybe it's a one pound bag of coffee every month versus every every quarter, or something like that, right? Or maybe it's it's maybe it's a land and expand, right. So what the what we what a lot of, we see other brands would actually create a very low cost subscription product, maybe that's $6 a month, right? And then they'll acquire all of these customers because of the low price point, right. And then at that point, they'll either expand into like what we were talking about earlier quarterly, versus, or semi annually versus a monthly because then the average order value is a lot higher, right? Or they'll actually expand their physical product line, right. So you might start with, you know, you might start with to pick toothpaste, then you move into dental floss. So you might start off with, you know, dog food, a certain type of dog food, and then you move to snacks. Right? And so we also want to help you not only in on the tech side of things, but how you fundamentally think of your business. If your goal is to reach a recurring business model. Does that make sense?

Aaron Conant 44:13

Yeah, I think 100% It does. I think it's the assist advancement that we're at, it's so much more than just a plug and play. Oh, ad like you're talking about the radio button There’s his art, but it's also there's a lot of science on the back end. And there's a lot of strategy. And you know, you guys are a harbor for a lot of that information I think a lot of people are looking for, you know, I need a subscription. But I plugged in the radio button and it didn't work, right. I don't really have it. It's not going and it's because there's 10 steps after. Right you plug in the radio button, right? There's all of this, you know, a B testing kind of in the back end, is it one month? Is it three months, six months? Do I advance into this category or that category? Do I start off at a low model just to get everybody in? then, and then, hey, you already got that package going out? Do you want an add on? Right? You know, do the add on play? It's, it's awesome. I mean, I love the digital space. And this, we keep getting to the next level. You know, if I had like a question, you know, on my side and others, you can drop them in there as well. It's like, you know, what are you guys excited about in this space? Right? Like, I love the conversation so far. It's, it's it's eye opening to me. You know how in depth the subscription businesses got in the different ways you play it, and you're mining it for data, and customer value and lifetime retention? What do you guys get? What gets you guys excited about this space as a whole? And then, you know, after that, what's next? What's coming in, you know, 2022. from your standpoint, any cool things you guys are working on?

Baxter Roberson 45:56

Yeah, George in fact that one couldn't be more teed up for you. It's love the frolic strategy set. I think for me, it for me personally, there's, it's hard on these calls, because I want to talk about all the things you've got coming up. And there's certain things we can't certain things we can't. But I think the most, the most exciting thing for me is that we're seeing, we're seeing the adoption increase on the consumer side, in conjunction with the model on the business side getting more sophisticated. So it's not you, I think a lot of businesses have been previously you get more sophisticated on the tool side, or you get more, or you get less customer demand. But it's something that's been stagnant for a while, we're seeing a virtuous cycle between the two. So we've there's been a few products we've been testing and things you've been looking at that you're the product, we're having a problem separating What's is it the product or the customer, because they're both so, so aggressive there. And I think that growth, you just for folks that have gone through this recent, you know, Black Friday episode, we've seen that growth, for subscriptions in 2020. Everyone said, Hey, this is going to be the big year, it's going to kind of stall out a little bit. We've seen the same if not more, well, well into the triple digit growth this year versus last year. It's not slowing down. So I think I'm really excited because it's here to stay. And these things we're doing are, they're not just a interesting way to diversify revenue. Now it's a fundamental shift in the way business will be done. So I think that's what excites me about the space going forward.

Aaron Conant 47:21

Yeah, I just why you're saying that it makes me think, you know, during the whole pandemic, where people are working from home, they have this, I think, new feeling for the valuation of their time. Right. And I can kind of correlate that into why this keeps growing. Why go to the store, right? When I run out of something? What, why doesn't it just show up? Right, when my time is so valuable, and everything that I wanted to do? That? That's how I view things now? Well, you know, it's, I can see how that directly correlates. It's gonna keep going up. So anyways, yeah, George, I'd love to hear your thoughts here as well.

George Ishii 48:01

Yeah, I mean, I don't know if you could tell I'm super excited about data. I mean, I think we've had a lot of breakthroughs, even already, with some with some of our merchants. You know, we last year, we launched our first analytics product. And you could probably tell that we've been focusing a lot of resources on our analytics product. But I feel like we're just this is just the tip of the iceberg. All right. And I almost feel embarrassed that we haven't figured this out yet. Because we really need to, we really need to figure this out. And so I think, in my mind, like, it's just an explosion in like, how we could really push the envelope, and how we could we could we could create these revenue opportunities by using by using data. So to me if, like, there's, there's certain stones that are uncovered, and and you know, when we, when we uncover data were like, wow, right like, this could go on forever. This really is the tip of the iceberg. We really staffed up our data team, I'm super excited about. We just We just hired an incredible subject matter expert in data, who had worked at Pinterest, and who worked on a bunch of reengagement campaigns and Pinterest, and it's bringing a lot of subject matter expertise in house. And like I said, there's just so much data that we that that we have at our disposal, and we really haven't even scratched the surface, that surface on what meaningful insights we could start to draw better, that are specific to the merchant like we want to get to the granularity of a merchant right? He imagined being able to three three, ReCharge, create a customized profile or customize experience at the customer level, not only at the product level, not only at the store merchant level, but at at the customer level, right. Like imagine what the opportunity to imagine the opportunities that will unlock for merchants, as well as what this could really do for a somewhat nascent churn like Baxter was saying, right? It's, it's sort of a nascent turn pattern that we see right now, right. But there are, I think there are certain things that are capable of breaking through some of these things that we've seen is nascent. And those are the things that we want to uncover. And we want to figure out all for the purpose of optimizing revenue and opening up new revenue channels for for stores and merchants.

Aaron Conant 50:34

Awesome I love it. This has been fantastic, you know, as we're kind of right here at time, you know, Baxter, George, thanks so much for your time today. And again, anybody on the line today, you know, they're here because they're the highest recommended, you know, partner in this space for the network as a whole 100% worth setting up some time with them and their team to connect hear what they're doing in this space, the capabilities they that they have, I encourage everybody, you know, set up some time, if you're in the subscription space and be well worth it. You know, use this for networking and knowledge sharing as much as you can. And with that, I think we're going to go ahead and wrap it up, Baxter, George, thanks again, so much for your time today. Everybody else, look for a follow up email from us. More than happy to connect you with both of them but also would love to have a conversation with you on our end and find the topic for the next call also, networking knowledge share. And with that, I think we're going to be we're gonna be wrapping this up. Hope everybody has a fantastic Tuesday. Have a great rest of the week. Everybody, take care, stay safe and look forward to having you at a future event. Awesome Thanksgiving. Thanks, George. Last Friday