Maximizing Customer Loyalty & Retention Leveraging Subscription Technology

Feb 24, 2022 3:00 PM4:00 PM EST

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Key Discussion Takeaways

There’s been a recent push towards direct-to-consumer sales. Amazon is up and running for many companies, Walmart is wonky, and Target is selective. What tools do companies have to sell to consumers directly?

Nothing builds loyalty like a subscription. Every transaction has the potential for a new customer relationship — and the core of every relationship is communication. Whether it's email or SMS, each interaction is a chance to strike an emotional chord with consumers and keep them coming back. Because you’re not only persuading them to subscribe once — the goal is for consumers to stay subscribed.

In this virtual event, host Aaron Conant is joined by George Ishii, Vice President of Product Strategy at ReCharge Payments, to discuss how subscriptions can increase customer loyalty and retention. George talks about why communication is essential to building customer relationships, strategies for promoting subscriptions, and new trends in the subscription space.

 

Here’s a glimpse of what you’ll learn:

 

  • George Ishii describes how simplifying website building changed the face of eCommerce
  • How ReCharge turns transactions into relationships
  • Why communication is key to building customer loyalty
  • Turning customers into long-term, loyal customers through subscription transparency
  • The benefits of using SMS for cancellation
  • What are some ways to push subscriptions without running subscription promos month after month?
  • Different strategies to use subscription-based conversations for marketing
  • Best practices for handling subscription cancellations
  • Personalizing subscriptions to get the most out of them
  • How long does it take to implement ReCharge’s subscription platform?
  • New trends in the subscription space
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Event Partners

Recharge Payments

Recharge is the leading subscription management solution, helping ecommerce merchants of all sizes launch and scale subscription offerings. Today, Recharge powers subscriptions for more than 50 million subscribers across 15,000 merchants, including fast-growing brands such as Verve Coffee, Bokksu, Who Gives A Crap, Keap Candles, and Bumpin Blends.

Connect with Recharge Payments

Guest Speaker

George Ishii

George Ishii

VP of Product Strategy at ReCharge

George Ishii is the Vice President of Product Strategy at ReCharge Payments, a subscription payment platform designed for merchants. He was a Co-founder of Comparably, BetterWorks, Yammer, and Geni. George was an early UX designer at PayPal and worked as a Software Engineer at Adobe Systems. He is an international guest speaker at various venues across Japan and China and has been a speaker at Giant Red Button UX Conference at SXSW, Growth Hacker Live, SXSW Interactive, UCLA Andersen Business School, and USC Marshall Business School. 

Aaron Conant LinkedIn

Co-Founder & Managing Director at BWG Connect

Aaron Conant is Co-Founder and Chief Digital Strategist at BWG Connect, a networking and knowledge sharing group of thousands of brands who collectively grow their digital knowledge base and collaborate on partner selection. Speaking 1x1 with over 1200 brands a year and hosting over 250 in-person and virtual events, he has a real time pulse on the newest trends, strategies and partners shaping growth in the digital space.

Event Moderator

George Ishii

George Ishii

VP of Product Strategy at ReCharge

George Ishii is the Vice President of Product Strategy at ReCharge Payments, a subscription payment platform designed for merchants. He was a Co-founder of Comparably, BetterWorks, Yammer, and Geni. George was an early UX designer at PayPal and worked as a Software Engineer at Adobe Systems. He is an international guest speaker at various venues across Japan and China and has been a speaker at Giant Red Button UX Conference at SXSW, Growth Hacker Live, SXSW Interactive, UCLA Andersen Business School, and USC Marshall Business School. 

Aaron Conant LinkedIn

Co-Founder & Managing Director at BWG Connect

Aaron Conant is Co-Founder and Chief Digital Strategist at BWG Connect, a networking and knowledge sharing group of thousands of brands who collectively grow their digital knowledge base and collaborate on partner selection. Speaking 1x1 with over 1200 brands a year and hosting over 250 in-person and virtual events, he has a real time pulse on the newest trends, strategies and partners shaping growth in the digital space.

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Aaron Conant

Co-Founder & Managing Director at BWG Connect


BWG Connect provides executive strategy & networking sessions that help brands from any industry with their overall business planning and execution.

Co-Founder & Managing Director Aaron Conant runs the group & connects with dozens of brand executives every week, always for free.


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Discussion Transcription

Aaron Conant 0:18

Happy Thursday everybody. My name is Aaron Conant. I'm the Co-founder and Managing Director here at BWG Connect. We're a networking and knowledge sharing group of 1000s of brands we do exactly that we network and knowledge share together to stay on top of the newest trends, strategies, pain points, whatever it might be that shaping digital growth today, I spend a lot of my time talking with brands 30 to 40 a week to stay on top of those trends, I'd love to have a conversation with anybody on the line today. You know, there's some people I've talked to in the past, we'd love to reconnect. In a way we haven't chatted before, we'd love to fire up a conversation, we don't sell anything here, we're just a giant networking group, we're gonna do close to, I don't know, 500 networking events this year, a bunch of them like this. But also, more recently, getting back into the smaller format dinners, as well. 15 to 20 people around the table having a great networking dinner as a whole around specific topics. So if you're going to any of the major events, or you're in a tier one city and you want to be on the list, don't hesitate to reach out, we'll set up some time to talk we'll make sure we get you invited to the right ones. housekeeping items, as we get started, we're kicking this off at three to four minutes after the hour, just to give enough people you know time to log in from the last meeting. But just so you know, we're gonna wrap up with three to four minutes to go as well, we're going to give you plenty of time to get on to your next meeting without being linked. The other thing is we want this to be as educational and informational as possible. So at any point in time, if you have any questions, don't hesitate to drop them in the chat. Don't hesitate to drop in the q&a section there. Or you can always just email them to me Aaron@bwgconnect.com, and then includes an hour after the call tomorrow next week, whenever it is, don't hesitate to shoot me a note more than happy to get you an answer back usually within a couple days or so most times in under a day. So don't ever hesitate to shoot anything over. And so I want to kind of set the, you know, the reason we're having this call today is you know, I'm talking to 30 or 40 brands week. And when those same topics come up over and over again. And there's been this huge push into direct consumer side of things. Amazon is up and running for a lot of companies. Now, everybody understands how crazy it is. Walmart has kind of been kind of wonky targets kind of really selective. And now there's this huge focus on direct to consumer. And then around that, lots of different things that go into it. And including subscription payments. It's also loyalty, lifetime value of a customer in maximizing all of those things in so we have some great friends, partners, supporters of the network over a ReCharge. And they're just helping a ton of brands in the network out they come highly recommended from a ton of them. And so we asked him to jump on the line today. And just kind of give us a download of what's going on. So don't forget to ask questions as we go. But you know, George, I'll kick it over you if you want to do an intro on yourself. ReCharge that would be awesome. And then we can kind of kick off the conversation. Sounds good. Sounds good.

George Ishii 3:09

Sounds good. Aaron, thank you so much. So I'm George Ishii I'm the VP of Product Strategy at ReCharge. ReCharge is a platform for subscription payments, infrastructure. And yeah, I guess, Aaron, I just want to start actually, unconventionally, I want to start by just acknowledging world events right now. And what's happening in Ukraine. And so it's, it's one of those things, I mean, I'm going to be smiling and talking about these things that I love. But it doesn't mean that my heart is not heavy around what's happening right now. And so, you know, heavy hearts, I'm going to be a little bit distracted. But I am talking about something I really love. But definitely heavy hearts and prayers going out to that side of the world right now. And so that's that's how I wanted to start. But Aaron, thank you so much for this opportunity to talk to you again. And I really hope that we could we could pull something positive out of this. And it could be really helpful for everyone in the room.

Aaron Conant 4:14

Yeah. Awesome. Love it. Yep. And I think everybody agrees with you, my friend. Do you want to just give a little background on ReCharge as a whole, just just kind of set the tone. And then we can kind of do a deep dive on where it's going. I'll give you some of my insights from brands I'm having. We'd love to hear your thoughts on the back end as well. But if you just want to, like let people know, like, Hey, this is where you fit into this space that it can kind of set the tone for it as a whole sound good.

George Ishii 4:40

Yeah, sure. Sounds good. So ReCharge is. Like I said it's subscriptions infrastructure, for payments and in recurring, recurring physical products. And so we started as a Shopify app a long time ago. For just a turnkey one. Click Add subscriptions to your Shopify store. And that was a long time ago. So we've come quite a bit. Now we're much more developer friendly API driven for full customization of all of the dynamics and, and controls around your subscription program. And so yeah, I hope I hope that helps.

Aaron Conant 5:20

Yeah, yeah. Yeah, it does. Um, so here's what I'm seeing across the board is, so COVID has a year spent, where people are scrambling to get the direct consumer up and running. Then the next the, you know, the past year or so people have gone through this. It's like they Google the checklist, right of a this checklist regarding consumer sites, and they've gone through, and they've, you know, they got the SEO, they've got the SEM, they've got, you know, subscription payments, they've got email, SMS, now, digital age, direct mail, they're doing all the checkboxes. And yet, now, we're at a time where if people are looking at how do we make it all work together, it's like this digital 3.0 is kind of how I, I visioned it in my head is, you know, we get started, we've got 1.0 2.0. And then now it's 31. I was like, what does it look like? On the back end? We'd love to hear you know, your thoughts in this space, if you're seeing the same thing as well make this a reality. Like, how do we get it all the work together?

George Ishii 6:19

Yeah, sounds good. Good question. So it is true. So the good side of this whole thing is that it's getting increasingly easy to build your technical stack, right? It used to be actually really, really hard. Like even building a storefront to sell stuff used to be really hard before Shopify, because you'd have to, you know, create your own database of products, you'd have to get a web developer to do write all the backend code, then you need a front end UX designer and developer to do all your front end. And basically, you would build these sites, one off sites, right. And it would take a long time, and it'd be really expensive. And it'd be really, really hard to maintain. And Shopify comes and creates this one click, you know, you could live I remember when Shopify first came out, I created a store in like an hour, and I was like, wow, this is this is gonna revolutionize things. Right. And it did. Right. And that's, and that's how Shopify is so quickly, like moved, and really changed the face of eCommerce right. And so that was many years ago. And now it's just getting easier and easier, right? Because to your point, there are all these components that just plug in together, you know, including Shopify, and within hours, not weeks or months, you could actually have a fairly sophisticated eCommerce site to start selling stuff, right. It's like the American dream. It's great. I love that aspect of it. And that's not going to change, it's just going to get easier and easier. Right. But to your point, you know, what do you do after you build that? And how do you be a competitor in the space? Because basically, the problem with that, that ease of actually getting to market is that the whole tide rose, right? All the all the boats rise with the tide. Right. And so now, instead of one of a few websites that are selling a product, there's like hundreds, right, and so even though your build has become more sophisticated, so as everybody else is, right. And so I think the question that I'm hearing, is that how you step back from that and say, Okay, I have the tech stack. Now, how do I think about using all those things and orchestrating those things together to create like a competitive advantage and to sell more products? Right? Think Yeah, one?

Aaron Conant 8:39

No, I was just saying, But. So what is what does that look like that? Right? Because even in the case of subscription payments, it's it's a plugin at this point in time, right? Yeah. Right. Everybody's low. So how do you see people differentiating, you know, if we, if we isolate it right now to the subscription side of things? Yeah. No, it didn't it? How do you change the dynamic? But what are the new things that are happening? How do you take it to the next level? And then I also, you know, just have a couple questions come in around communicating around is SMS as an email? Are there other ways you can utilize it?

George Ishii 9:12

Yeah, yeah. Yeah. Good. Okay. Perfect. Perfect. So the way that I see it, right, the way that I see it, is that you have to take a step back and look at the psychology of eCommerce and the psychology of consumers, right. And so our tagline I ReCharge, is turning transactions into relationships, right? At the end of the day, right? It really comes down to like striking a chord with an emotional chord with your customers, right? Because the easiest way to modify behavior is to have emotions involved. Right? And, and we don't our goal is not to modify our behavior, right? But our goal is to connect, you know, great products with the people who seek those products, right? And so but in order to do that, you have to get to build a relationship with your your customers. In order to do that, and I like the questions that are coming in, because because what is the relationship? What the central cord, every relationship is communication? Right? And and the really interesting thing about eCommerce now is that it's going beyond email. Well, it's gone beyond email, right? And so it used to be that email was the primary communication channel between brands and customers. But now there's all these other ones emerging. I mean, SMS is very, very quickly growing and will eventually probably become the primary communication channel for eCommerce. Right? But then, but then it doesn't, it doesn't matter what the communication channel is, right? Like, at the end of the day, it's it's communication, right? And so whether so, you know, we're, we're thinking about what's what's beyond even SMS, right. So we have, we have, we have standard email, we have clay, VO, where you build these beautiful, like emails that are on brand. And then we have SMS, which is transaction on conversational, right. But then beyond that horizon, there's omni channel, there's all these different ways that you could communicate with customers, right? There's direct messages, there's D, there's Facebook Messenger, there's Slack, I mean, there's even voice, right voice driven communication, but at the end of the day, like, it doesn't really like the communication channels, not important, as important as how you build a relationship, right? And I don't want to I want to go,

Aaron Conant 11:26

this is the like, cuz this is the transition this like, that's taking place is people think of subscription payments, as I'm going to add to the bottom line, I'm going to get a longer or a bigger lifetime value of customer, you know, I'm going to get those and you know, and it's always, you know, less expensive to sell something to a current customer than acquire a new one. And so it's this mindset of I need to get this subscription in place, because it builds a bottom line. And maybe there's, you know, longer term, there's a bigger multiple if I sell this someday, but that's not at the core of what you're talking about. Yeah, yes, it's nice. You're using it as a form of communication to develop a relationship. And that's, this is digital 3.0. That sort of

George Ishii 12:13

Yeah, it's a shift in mindset, right. And the thing is, is that like, it's okay, if if we don't understand that now, because this is it's so new, right. And so I think we've learned right in the past, that increasing LTV is really all about getting the next one, right, getting it like selling a customer one product first and then getting to that next milestone, which is like the second purchase, right? And I think the key is to change the mindset into like looking at it holistically looking at the relationship with individual customers holistically, rather than just sequential and segue and segmenting it by saying, Okay, let's just get to the next milestone right now, that's designed the entire, you know, experience that a customer has, from the very beginning, when they first identify my brand through an ad or a billboard, or whatever it might be on TV or on YouTube, right? All the way through to, you know, the stuff the online experience at the store, the checkout experience, you know, what happens after checkout, receiving their products, and then especially for subscription commerce, what that ongoing user experience is, like, what happens after I received that first package, that's really where the relationship that's the beginning of the relationship, not the end, right? Like the first purchase is really the beginning of the relationship, not the end, right? And if and some of our most It was so close

Aaron Conant 13:43

that out. So many people think about it, they think, you know, especially in this area, once I've got somebody to sign up, and I've got him as a subscription, awesome, now I changed my focus to go and get you the next subscription. Right? And how do I curate my, my communication, my paid media, my SEO, my SEM, whatever it might be, to get somebody in the funnel to get them to subscribe, and they clicked and it's good. And that is that is the checkmark mentality, right? This is not the the next level of who's gonna win, because I think we're gonna see is these different decisions strategically, is going to make the difference of who the real winners are, you know, versus I don't want to say the losers, because they're still going to be there. People are going to shop online, but you're going to see people that just take off fuel to stretch their head and say, How in the world did that happen? It is going to be a different mindset of the backend.

George Ishii 14:38

Yeah, exactly. I mean, it's hard earned money, right? Like, at the end of the day, like, part of my job is to empathize with brands, right. And I ran an eCommerce site myself before in the past, right. And so, like customer acquisition costs are his hard earned money because, Louis because basically what you do is that you reinvest into your business. Right? So all these profits that you made yesterday are going into marketing spend and customer acquisition today and tomorrow, right? And so it's not just money, it's free. It's hard earned money, right? And at the end of the day, right, it's like you bring in a customer, right? And then you just watch that customer churn. Right? Like, like, I have urgency around changing that, right? And around, like, how do we unlock this idea of like, turning some of your customers into long term, loyal customers, right? Like, it's a pipe dream to believe. And it's not realistic to believe that you could convert everybody that you acquire into a long into a long term loyal customer, but we could do a better job at creating more of them. Right, the opportunity is definitely there. Right. And, and I proceed with with urgency around that, like we need, we really need to change that. And if we do change that it helps everybody. Right? It helps everybody. That's that's, that's, that's the great part about the mission of ReCharge, is it that, like, it helps it helps the customers feel not taken advantage of by their subscription programs. Right, which seems to be unfortunately, the the the rule, right? Not the exception is that a lot of people, a lot of consumers and customers feel taken advantage of by their subscription products, right? They're not communicated? Well, they don't feel like they have a sense of control over what that subscription program is. And maybe even they felt like in the very beginning, they even know it was a subscription, right. And so, you know, we need to work these things out, right. And we need to create, you know, an even balance between, like, the customer feeling like, Okay, I actually do feel cared for, right, I feel like the brand cares about me. And they're being transparent about the subscription program, and about how much I paid. And they're giving me the control of my own subscription program at the same time, right, we want to create loyal customers for the brand, because that's the key to to LTV, and to end that equation, right between hard earned money spent on on acquisition, and like the profits that would come from greater LTV and retention.

Aaron Conant 17:18

Awesome, just a quick reminder, if people have questions, drop into the chat the q&a or email them to me, Aaron Aaron@bwgconnect.com. Yep. A question that comes in is around what's the most effective communication stream post subscription? So how do you if you're advising a brand, what does that look like? Is it email? Is it SMS? What's the cadence? And then, you know, just another one. What about subscription cancellation? What does it look like? And so yes, yeah, we'll tackle there.

George Ishii 17:49

Yeah, those are really good questions. So we're seeing some, some really, so ReCharge has launched an SMS product a year ago. And it's, it's flying through our merchants right now. And we're seeing a lot of positive signals around SMS as a as a post, single first purchase communication vehicle. And so for example, we we do an LTV analysis, to compare customers who interact via SMS versus customers from the same cohort who interact via email. And we're seeing LTV values way higher across the SMS SMS segment of that cohort. And so, but you know, the interesting thing, actually, and this is related to cancellation, right? Because the cancellation thing, there's a there's, there's, it's very bifurcated, right? Because some people think that, okay, wait, ReCharges make it way easier for customers to cancel their subscriptions. I don't want that. Right. I like to set it and forget it idea. Right. And then some merchants are like, transparency is great. That's part of our DNA, that's part of our culture, our culture and our brand, right, is that we want full transparency around your program. And to give you that full control, right. And so one of the interesting things that we saw in the data amongst the SMS segment of the cohort, is that yes, initially more people cancelled than with email. Because because they're just, it's a lot easier and SMS to just cancel your subscription, right. But in the long run, if you compare the entire segment of that cohort, the merchant made more money at the end of the at the end of that set at the end of the lifetime of all of those customers and, and there's a lot of different reasons why But to summarize, basically what happened was that SMS was better for your most loyal customers and email and set it and forget it was better for the customers that weren't loyal. So essentially, what happened is that the customer who probably would have canceled anyway? Cancelled sooner on SMS. Because an email is a lot harder to cancel, you didn't get an SMS notification, right. And so, you know, ReCharge is, you know, we actually have the functionality to turn off cancellation and SMS if you really want to. So, you know, part of what we charge wants to do is we want to, we want to provide the most flexibility and customization. And so if you're, if you if you believe, if you like this, set it and forget it, then we offer that functionality. But what we're finding is that that transparency in the long run is better for LTV.

Aaron Conant 20:37

Yeah, awesome. So another question that comes in here just to remind others traveling the chat or the q&a, or email them to me, what are some ways to push subscriptions without running subscription promos? Month after month?

George Ishii 20:48

Yeah, I think that's a good one. I mean, I have a few different thoughts on that. Um, I think, you know, one of the one of the ways to do it is just to be transparent from the very, very beginning. And this is the most common way that merchants do this. And they just have a, they just have a radio button selector for one time, or Subscribe and Save at the very beginning. So on the on the on the product details page, you could you could buy one time, or maybe you could have a discount of 20% of something if you Subscribe and Save. It's basically what Amazon does. It's like the best practice in place right now. And so I like that one, because it's transparent up front, right? It gives it gives customers the decision from the very beginning to make the decision, if they it's a cost benefit decision for them, right. It's like, wait, I could save 20%. And then I could always cancel later if I don't want don't want this, I don't like this. Right. So I think that's the the most basic way. And then there are a bunch of nuances around doing it that way, right? Some merchants will actually default to the subscription, you know, to save 20%. And so it's basically an opt out subscription from the very beginning, you know, but make it really, really clear throughout the whole process that you're subscribing, right? And then there's a lot of UX UI things that you could do with that as well, right? So you could you could sort of you could hide the subscription option, unless they expanded out or you could default a subscription and hide the single one time purchase option in this expanded out. So Right. So there's lots of ways that you could nuance that, and I think this is my opportunity also to talk about something else. Which is it? The answer also is that it depends, right? And what we've seen is that the successful brands, like no, there, they spend a lot of time understanding their customers, and not only understanding who they are through, like subjective interviews and talking to them, but also through multivariate testing on their website, right. So they could see how they're interacting with these controls as they're launching them to start, like creating personas around the types of customers that you have, right, and then designing like very specific interactions and, and substituting programs for those for those different personas. Right. And so it's not a one size fits all, it's exactly what I said. Right? It's it's, it's, it's its competitive advantage through differentiation, right. And in this case, differentiation is about understanding your customers and creating a personalized experience for them. Right. So anyway, going back to the original question, right, there's, there's this Subscribe and Save. Right? I think that's a good one. And then there's also like, ways that you could ramp up and warm up customers into a subscription. Right. And so I think the question about promos month after month pushing subscriptions over and over again, that doesn't resonate with people who aren't interested in subscriptions, right? Like if I, from the very beginning, chose not to subscribe, and I only wanted this this one time, and I actually don't even like your product. Right? I don't want to see that. That drip campaign coming in all the time. In fact, I see it as an invasion of privacy at that point. It's like, I don't want to subscribe. Why are you? Why are you? Why are you sending this to me every two weeks or even more often, about subscribing. You don't know who I am, because I hate your product. And I don't want to buy it again. Right? You're always gonna have customers like that, right? But the smart merchants will actually understand and know which of their customers will have more propensity to buy subscriptions. Right? And it could be something as simple as, okay, someone who's purchased more than one of that SKU ever in their lifetime. And it could have been like a year apart. Right? But they might warm up they might receive that, that that email from a different perspective than then the first person right? And so I think you you, you get where I'm at, you get where I'm going right? It's like, it's like understanding your customers knowing that there is a certain propensity for us Upgrading into Subscriptions through a certain segment of your customer base, rather than rather than all of them, right. And so I really liked clay vos segmentation tools. And so to be able to leverage Graybeal segmentation tools to send these, these upgrades, opportunities into subscription and I think is really interesting and then ReCharges his building ReCharge has in his building a bunch of in app like, methods to do this as well. And like, for example to, you know, ReCharge is is working on second segment segmentation of your customers along their propensity to upgrade into Subscriptions, propensity to churn, and a lot of these other things. So so a lot of it that intelligence can be done via clay, VO, and a lot of it will also now be available in ReCharge upcoming

Aaron Conant 25:52

yet. I've also seen a ton of requests and more conversations around CDP's as well, I just saw, you know, on LinkedIn, Bonnie's Tenaglia. You know, like, there's a lot going on on the CDP, you know, side of things for customer segmentation as a whole? Because like you're saying is, that is the next thing? It's not just them clicking on it is? What's the message? How are you communicating with them? You know, and a lot of that goes back to who is that customer, like you're saying, understand who they are? A lot of understanding who they are, or in the cohort you're going to put them in is through the communication aspect, which is another question that comes in, which is where different ways you can use subscription based conversations for marketing. So in my mind, that means something along the lines of like, are you upselling? Are you giving them, you know, additional options? You know, are you promoting new things prior? Are you having them add on to their subscription ahead of time? Do you see those working?

George Ishii 26:54

Yeah, I think I think there's, I think there's a lot of opportunities on the marketing side. But ReCharge is really like recharging myself, we're, I'm really leaning into the transactional side of SMS, right? Because, like, my personal experience with SMS as a communication channel for eCommerce is that I'd rather I'm a lot more open to receiving notification that something significant happened to my to my product, right? Like either shipped, or it's about to ship or it got delivered, right? Or, like, transactional things, right? I think there's plenty don't get me wrong. There's lots of opportunities in the promotional space. Right. But it's a fine, I think there's a fine line in the promotional space between, between like, it, like customers who are just, like joyful that they receive this, this promotion via SMS. And customers are just like, oh, man, like SMS is becoming like the next email, right? Which is becoming more of a spam channel to me. Right. And so, yeah, I have some I have some opinions on how that space could grow and the opportunities there, but I will talk about the the transactional opportunities, right? And like, to me, one of the the basic fundamental differences between transactional promotional is that with transactional, you have to give before you ask, right? And transactional email, transactional outreach, whether it's SMS, email, whatever communication channel, that is, it's all about, like, let's lead with this is something that you will benefit from as a customer, right? And then, right, when they when they get past, like the point where they're, their needs are taken care of. Right? Okay, I have less anxiety about this being late now. Or I know that it's finally going to ship soon. Right? Then you have a different state of mind. Right? And you have a, I think you have you have different opportunities for upsell, or, or whatever marketing you might want to do after that sort of first thing has been taken care of, right? And so that's how we design our outreach, right? It's like, okay, we have a very, very good reason for sending you an SMS. And that's first and foremost, right? So it's like, it's like having a good read, it's the number one having a good reason for reaching out to you. Right, number two, letting you know that in that SMS, you have full control over what you want to do, right? And so typically, that'll be in the form of like, options that you could you could reply 123 or four. Right? Those are the options. So you have full control over your six subsystem program. And then three, right, like, having intelligence built into that so that we know that you might be open to, you know, any kind of marketing that we're going to do in that message, right. So in other words, like not trying to upsell Nasaan outsell someone who's that doesn't have propensity to want to buy anymore, right or like if we know that you are likely to turn right we will come Customize that message, you know, because like, it's it's like a punch in the face to say, Hey, would you like to buy more? When you're you're there to turn? And you're there to cancel. Right? Right,

Aaron Conant 30:11

which then tackles another, you know, question that comes in how do you best handle subscription cancellations?

George Ishii 30:19

Yeah. And so like I said earlier, right, I think the, the sobering news right about SMS is that it does, it does make cancellation easier, right? It makes everything it makes subscription management easier, right? So things like, you know, postponing for a week, or skipping your entire that entire delivery, if you're on vacation is really, really easy, right? It's just a matter of like replying with Yes, or no, or one, two or three in SMS. Right. And it's done. Right. But also, like, cancellation is easier, too. Because it's, it's a, it's a matter of, of replying to that SMS. Right. And so, but I think in the, I think in the long run, it's actually like, it's actually better for certain merchants who really believe in like, full transparency from the very beginning. And our data is supporting that actually, right. It's like, at the end of the day, we believe that it's best to focus on and invest in the customers that are going to be your loyal customers, like three, three main segments, right? The segments that are probably going to be the segment that are probably going to be your loyal customers, they resonate with your brand, they like your products, right? And then on the other extreme, is those that are going to cancel no matter what, right? It's like, I only signed up for a subscription to get that discount for the one product. And then I'm going to I'm my plan is to cancel immediately. Right? And then you have the soft center, right? And so I think the soft centers the great the great opportunity, right? Because those are, those are, those are the customers who are somewhere in between, right? Like they're okay with the subscription, they're probably going to cancel, but they're, they'll try it for once or twice, one to one or two times. And then you have those who are not completely sold, but they love your product. And they're there, there's that there's that there's that good possibility that they will end up as long term. I mean, we have customers who are around for not months, but years. Like some of these, some of these, some of these merchants retain customers for 12 plus months. i It's pretty incredible what some of these merchants have done in terms of building a loyal subscription customer base.

Aaron Conant 32:34

Yeah, I mean, also, I mean, you think about it, from the side of if you make it easy enough. I know there's, you know, products I've subscribed to that. It's just not the right cadence, right? I've got four kids at home, we consume a lot on an irregular basis. Right? And so just the subscription side of things. It's just some, even if I'm saving 5%, whatever. It's just not worth it to me, right? It's I don't it's either too much or too little. So I don't stop buying the products, I just convert to a normal customer. And I order it when I need it.

George Ishii 33:07

Yeah, that's right. Yeah, the best example personal example that I have, because basically all ReCharge employees get get an amount of money that we could use to, to buy subscriptions. Right? And the fun. So So during 2021 The funniest example of that, for me was the toilet paper. Right? So, so the toilet paper, right? They make you go through this questionnaire. Here's a very personal questions, right? How many people you have in your household? After you use the restroom a day, right? And then and then they based on this questionnaire, they come out with a personalized subscription for you. Right? And for us, it was like something like 14 rolls a week or something? Like, what do I really use 14 rolls? Or how did you get there? Right? And, yeah, and so, you know, you can't you can't get these things down. But you know, that I mean, to your point, right, like, different people consume different things at different rates. Right. And that's, that's that that's the hard part about subscriptions, particularly with these things, that there's quite a bit of variance, right, between how often and it can happen any with anything, right, like one of our I was looking at one of our big merchants earlier today they sell eyelashes, right? And apparently that varies as well. You know, some people like they do eyelashes once a week, some some people will let it go for like two or three months, right? So I don't I don't know myself. But like, you look at you look at any category, right? And you start seeing these same patterns emerging. Right. And and the what's so interesting to me is like how does ReCharge, create tools that can support all of these different use cases? And it's just fascinating to me, right. The other thing I wanted to mention actually that just thought about this is this, I've been thinking about this idea of subscribe ability of products, right? And I don't know if this question would come up, right. But I know there's a lot of merchants actually, more than 50% of merchants on Shopify and nddc in general, do not have subscription programs, right. But I would argue that they have subscription subscribable products. Right. And so one of the things I've been thinking about a lot, is how do we help shift the mindset? Right, from one time products to subscribe ability, right? And so because I was just looking around my, my office, right, and saying, okay, most of these things aren't subscribable. Right. So I sort of understand, right, so I looked at like, my shoes, right? So this guy mobility, no, not really, but actually, kind of, right, you have different shoes for different seasons. And like runners actually go through shoes quite, quite often. Right? And so runner for runners shoes are like tires for your car. It's like, you're right, and I was looking at iPhone cases, right? It's like, Nah, you know, I would just buy that I would just go to the store and buy that. But then I also look at I have a pile of old iPhone cases. Right? And to some people, not me, but to some people, their iPhone case is like clothing. Right? It actually changed all the time, like purses or accessories, they actually change it all the time, right? And I was like, oh, man, like if you really take a deeper look, right? It's like, do like, do we have opportunities to change the mindset of all of eCommerce towards this idea of subscribe ability of your products, right? And so not only do we want to create the tools to allow selling subscription products, but we also want to shift the mindset of eCommerce in general, towards subscribe ability, right? Like, if you see like, there are all kinds of products I would never like expected to be to be subscription products that are highly successful.

Aaron Conant 37:15

We all do it. Right. We also get caught up in research, right? Like the pay. This is what I would think and I would never do that. But in all reality, it's funny because you didn't hit up, bring up shoes. And I'm a runner. Right? That's exactly it. I know, every six months. Within a few weeks, someone needs a new pair of shoes. Right? That's just the reality. Right? So invited, if they just showed up? That'd be great. Because I know how many miles I run every day. I know how many miles they run every week, though. Yeah.

George Ishii 37:46

I mean, imagine if, if your subscription program could be connected to your data source. Right. So you which app do you use for running? Do you use Apple's native app? Or do you have your own?

Aaron Conant 37:57

No, yeah, I just, I use you use my Garmin watch? Or Oh, yeah. Exactly. If I'm trained for a race, or? Or if Okay,

George Ishii 38:06

yeah. Imagine if like, we could connect the data, or the data source with whatever it is right? With this and provide that intelligence to your subscription product, and not automatically send it if you don't want it right, but at least give you like intelligent reminders or intelligent prompts or opportunities to buy. Right. So I think this is this whole idea of subscribe ability, I think is really interesting. Because, you know, I think what what ReCharge has done in the past is that we, we've we've created fundamental baseline tools that creative people have taken, and really change the face of subscriptions. And the way that people are think about subscriptions in the way that people bring subscription programs to market. And like, I realized that we're not the ones who come up with, with, with, with all of the ideas. Like it's everybody in the room right now, who does it's the creative people who are the merchants, right? And the builders who take these fundamental tools, and completely, like enable new ways of doing subscriptions, and frankly, new ways of selling stuff. Right. And so that gets me really excited. Right? Because it's like, it's like that's, that's the whole world of eCommerce. Right? And so, yeah, I think subscribe ability is really interesting to me. And so is like this idea of creating building block tools that we could put in the hands of creative people to really enable new ways of doing things. And that's to me something to be really proud of and excited about.

Aaron Conant 39:42

Is so a couple of things. You know, like how long does it take to implement something? Right, like a ReCharge because it's, maybe you have something but you don't really know maybe it's close. You know, people want to try it out. How long does it take to implement, like a ReCharge or most of the platforms, but it's the other one And it's like, out of the box or build your own is kind of what people are looking at right now. We'd love to hear your thoughts on on both of those.

George Ishii 40:08

Yeah, so Shopify Plus ReCharge is really, really fast. Really simple. I mean, I've done it many times, obviously. So I could, I could do it in like, probably 20 minutes. But I remember the first time I did it with my own site, it didn't take more than a couple of hours to have a Shopify Plus ReCharge site built. So both solutions are really, really good at just turnkey, you know, one size fits all right. Solution, right. And we have to do that, right? Because we have, we have we have customers across the entire spectrum, right? We have mom and pop shops who just want to sell something on subscription, they had this idea, right, they sell they they baked cookies, and send them on subscriptions, right. And so we still want to service that side of the market. Right. And I also been and be known for a really, really simple really, really fast basically what Shopify is known for today, right? But at the same time, there's an entire spectrum between that customer and the customer who has like the giant p&g fortune 500 company, a brand, right? That has a team of 50 engineers, right? Who are building their tech stack, right. And for them, it's 100%, almost, yeah, pretty much 100% ReCharge API driven solution for full customization of every aspect of their subscription program. Right, as well as what I was talking about earlier, which is enabling new ways of doing what we thought was subscriptions yesterday. Right? And so there's that spectrum, and we have to build product, we have to build a product for like, those two and and every everyone in between. Right? And so, yeah, so to answer the first question, it's very, very quick, if you want the, you know, one size fits all solution, and that's all you need. And that's all a lot of our even even a lot of our like middle sized customers, they still have a very vanilla basic, like ReCharge in Shopify Plus ReCharge installation. They do. And they're and they're very profitable. They're running very profitable businesses off of that, right. And then, but there's certain there's certain brands, right? And stores that need more customization, right? And, you know, it's either because they have a product that has very specific requirements, and you just just can't it doesn't fit into the one size fits all. Or they just, they just believe in the value in differentiation. Right? And if that's the case, then you know, there are there are there are middle to very advanced, like ways to build and manage and drive your subscription program via ReCharge. Right. So like I said, it could be full API driven, or we have some ways where you could you could just in settings, right, under ReCharge, you could start doing those customers customizations that you need. And so I think the choice to either the box or or build your own is a giant need to have our own talk on that one. Aaron, sorry.

Aaron Conant 43:19

Okay. Yeah, maybe? Like it's another hour discussion? For sure. Um, what are the newest things? Like if we, you look into 2022, maybe even 2023? Like, what do you see coming in this space as a whole, any rapid changes, any new things, any new strategies, we'd love to hear your thoughts across the board there. And if anybody has any last questions drop into the chat or the q&a, we'll get to them.

George Ishii 43:44

Yeah, I mean, besides SMS, I mean, as you know, SMS there's so much momentum behind SMS and eCommerce right now. You look at Clay VO and they're, you know, they're, they're a giant $9 billion company. And they're, they're doubling down in SMS right now. And as well as all of the SMS marketing solutions that are out right now. There's so much momentum behind that. And we're early days, honestly, right? If you look at the number of ReCharg customers on SMS, it's very, very small compared to the total number of customers yet. Like, everybody's talking about it, right. And so I think this will be a big year for SMS across the entire eCommerce spectrum. And I think the other thing that's sort of top of mind for me, is just how hard acquisition is becoming now because of the, the iOS and now actually, Android, right is sort of closing off all of the attribution cross app, but it's gonna be it's been it's hit merchants, right? For months now. It's just gonna It's just costing, acquisition costs have just skyrocketed and gone through the roof. And so like, what are the implications of that? Right, and some of the early implications that we've seen is that not only are they spending our Merchant spending less on marketing, but in response to that they're focusing in on their existing customers, right? Or they're, they're spending more time, like thinking about the customers that they work so hard, quote, unquote, work so hard to acquire.

Aaron Conant 45:32

Right? I mean, I think it's a part of the reason we even got to the topic today, right. From the conversations, I've been having customer loyalty and retention. That's your right, it's, it costs so much to get somebody once you've got them there, if the maximize that. It's just super interesting, because, you know, just going back to get to this discussion, which is usually that goes to, you know, financially, how much are we making, which at the end of the day, you know, you're looking to make money, but that's just the start, if you want to maximize that long term value as a whole, it gets back to the conversational piece as a whole. Just super, super interesting. And you're right, I mean, you know, I think everybody including marketers, which makes me chuckle right, is everybody hit ASCAP not to track and with Android, and then third party cookies going away, it's not going to get any easier as a whole. I don't know if you're seeing the same thing. But that's what's popping up routinely in conversations I'm having,

George Ishii 46:28

yeah, it's not going to get easier. But there will be solutions that circumvent that, right? And allow better targeting of ads, right, there's no way that Apple and Google are going to be the only ones that benefit, right, we'll find ways for the smaller companies to get around the giant platforms, but there's going to be a lagging effect, right? We still need to figure out how to do that cross app attribution, or whatever it's going to be right, we're gonna get back there, we will get back there. But in the meantime, like, what did we do today? Right? Or what do we do for the next two or three quarters, or however long it's gonna take to get to that point? And I think, and I understand, right, I understand it from a merchant standpoint, because one of the things that's always surprised me is that you have these giant brands, these giant subscription brands, and there's like, two or three or four or five people running the whole thing. Right? It's amazing. It's pretty, it's pretty amazing. What, what is possible today. But on the flip side, right, it's like, the number of resources that you have you There's way too many things to think about. Right. And so typically, a lot of like, a lot of the merchants will, I can only focus on one thing at a time. Right. And right now, back in the day, way back in the day when when, you know, in the heyday of acquisition, it was like acquisition all the way. Right? Like, I'll do this all day and all night, right? Because the equation looks so good at the time, right? And it's like gold, is there, let's go mined for gold. Let's do it. Right. I don't need to think about anything else. Right? And then I think the smart ones are just are just evolving and saying, Okay, well, that's less important. Now. It's, it's less, it's less a part of the equation, right. And I need to start focusing on these other things such as retention, such as average cart size, such as the overall journey of our, of our customers, and such as, subscribe ability of my products, right? And creating, you know, creative subscription programs. So that it's a win win both for the customers because they feel like they feel known. And they feel like they have control and for the merchants, because it extends that LTV out longer.

Aaron Conant 48:49

And you do the like like quick consultations with like brands just to say, yeah, actually, this would be perfect or that idea. Yeah,

George Ishii 48:58

we've never seen as we were, we work closely with, with our ReCharge brands, big and small. And, and yeah, you know, I might I might meet someone on a call. Because I'm just checking in to see how SMS is growing or whatever. And happy to follow up with those those folks to just to talk shop. I like I said in the beginning, I love this stuff is my favorite subject. And I have no shortage of opinions, good or bad, for better or worse.

Aaron Conant 49:27

No, I know, I love it. And it's like the eye opening thing for me today was just the communication aspect and looking at it and that is kind of what we're chatting about at the beginning is we have to evolve we have to be at the next level. At this point in time. You can't just check boxes anymore. So I see we're kind of we got just a couple minutes left any any key takeaways here? For people on the line and I'd like to say hey, thanks to everybody who dialed in. Thanks for the questions that came in, you know, look for a file, you know, email for me. I'd love to have a conversation with you as I know that we don't sell anything Here, we're a giant networking group, we'd love to find out what your pain points are, what the next topics for calls we should have. And obviously, if you need any recommendations on service providers, we rely on the network to vet out and provide the the top service providers across the landscape. That's everything from Amazon to anything direct to consumer, SEO, SEM, drop shipping, international expansion, don't hesitate to reach out, we can connect you with the top people out there in this space. The team at ReCharge, just comes up over and over again as the experts there but you know, kind of key takeaways. George's we get to the end here.

George Ishii 50:35

Yeah, I would just say I think what stood out to me, as I was talking through this is just the general mind mindset shift around, you know, how you how you see your subscription business, right. And that's either like, getting into the details of your subscription program, and how that how that articulates itself through the user interface. But it's also looking at the entire journey from the very end and seeing the first purchase as just the very beginning of that journey, and really taking a look at this holistically. Because I think I think when you when you have that mindset shift, all kinds of new things will open up and you'll have you'll have bigger questions, right? And you'll you'll start to see that the addressable market, right, that you have may be bigger than then you may have thought before. So I'm hoping that I could affect that change. And then I could help that mindset shift with as many people as possible.

Aaron Conant 51:29

Yes, I love it. Love the idea. That's what you'd rob as well as, like, the subscription, the point at which somebody subscribes is the beginning. Right? Not the end of the goal there. Right? That that is just the onset of being able to to maximize lifetime value, loyalty, retention, all that so awesome, my friend. Well always enjoy, I can't wait for the next one. One of these times we'll do a in person event is my hope at some point in time. With that. I think we're going to wrap it up here right on time. Thanks again to everybody who dialed in. Hope everybody has a fantastic Thursday. Have a great rest of the week. Everybody. Take care. Stay safe. I look forward to having you at a future event. Thanks again, George. It's been awesome. Thanks, everyone. Bye bye.

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