Maximizing Customer Loyalty & Retention Leveraging Subscription Technology

Mar 15, 2022 3:00 PM4:00 PM EST

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Key Discussion Takeaways

For decades, consumer centricity has been at the forefront of marketing for brands across multiple industries. But, delivering a seamless shopping experience for your consumers and establishing an ongoing relationship can be a struggle — until now. 

Subscription boxes can be personalized for consumer needs and generate monthly recurring revenue for brands. How? By examining the holistic and anonymized data, you can build a subscription model based on consumer needs and emotions and provide recurring product offerings. With targeting tools like emails and SMS, you can empower your subscribers and create a personalized experience. So, what steps can you take to create a mutually beneficial relationship with customers and your brand? 

In this virtual event, Aaron Conant sits down with George Ishii, Vice President of Product Strategy at ReCharge Payments, to discuss targeting and engaging with your audience to create life-long customers through subscription boxes. George talks about reprocessing older marketing models to resonate your brand across markets, analyzing the data to deliver a personalized shopping experience, and building a relationship and revenue with current subscription customers. 

 

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

  • George Ishii discusses the value of a relationship when marketing your products 
  • What opportunities can a subscription service give your customers and your brand? 
  • Why recycling older marketing models can awaken more subscribable products 
  • The benefits of analyzing the holistic and anonymized data of your subscription model 
  • Delivering a subscription-based on personalization 
  • Optimizing your consumer base through SMS
  • Creating a simpatico relationship with your consumer
  • Should you be worried about cancellations?
  • How to increase your subscription ratio through advertisement experimenting
  • Why you should streamline your brand to target subscription customers
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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

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.

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. 

Event Moderator

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.

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. 

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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 Tuesday 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, who do exactly that we network and knowledge share together to stay on top of newest trends, strategies, pain points, whatever it might be that shaping the digital landscape. Today, we're going to host close to 350, maybe 400 of these virtual events this year, we'll probably do 100 in person events. So if you're in tier one city would love to do a networking event with you in person, just send us a note, we'll put you on the list. That's on a variety of topics, we cover pretty much anything in the digital space from Amazon to team all to rack attend to direct consumer and everything that goes along with it from shipping and drop shipping to performance marketing, inventory management. So all those things that are shaping growth in a digital landscape. I talked to 30 or 40 brands a week to stay on top of those trends would love to connect with anybody here to have a conversation. That's actually where we get the topics for events. And when the same ones come up over and over again, we host an event. And just a couple housekeeping items. As we get started here, we're starting 45 minutes after the hour, we're going to wrap up at least four to five minutes to go as well, we're gonna give you plenty of time to get into your next meeting without being late. The other thing is we want to be as interactive as possible. So at any point in time, if you have any questions whatsoever, drop them in the chat, drop them into the q&a, or email them to me, Aaron aaron@bwgconnect.com. And so I want to kind of jump into this conversation because in those conversations I'm having with brands, you know, this idea of a it's a lot harder to get people on a website now to track it. You know, iOS 14.5, updates, everything to do with Facebook campaigns. You know, this idea of once we have somebody on there engage with us and our brand in a conversation, like how do we maximize customer loyalty in retention. And one of the ways a lot of brands I'm talking to are doing that is via subscriptions. And we've got a great friend, partner supporter, the network over a ReCharge Payment with who's just been, you know, incredibly helpful to a ton of our brands and kind of just educating everybody George Ishii from ReCharge. So it turns out, you could argue if you want to do a brief, you know, intro on yourself, ReCharge, and then we kind of jump into kind of an open ended conversation around customer loyalty retention, you know, subscriptions and communication with the customer.

 

George Ishii  2:49  

Yeah, sure. Thank you, Aaron. George Ishii I'm the VP strategy, VP product strategy at at ReCharge. And I've been in the game for quite a while I started my career at PayPal, as you know, Aaron, and back in 1999. And so have gone through quite a bit of, of eCommerce of, of consumer products. And actually, as a side note, there's a new book on Amazon called the founders. And it's a second book written about the PayPal Mafia. So I just got through the book, great book. And some really interesting sort of old school foundational eCommerce things because PayPal was like PayPal slash eBay. And now it's like ReCharge slash Shopify. So really interesting things there for anyone interested in the history of Silicon Valley. And something that's near and dear to my heart as I as I went through a lot of what, what was was happening in the book as I was reading it, so really interesting. But now here's the founder called the fa it's called the founders. Yeah, yeah. So yeah, go check it out. It's it's definitely a good read. 

 

Aaron Conant  4:08  

Awesome. Um, so we're, we're talking a little bit guesses. We're getting started here. Because we have to, I've had multiple conversations with brands now. We talked a little bit about, you know, hey, you know, brands are jumping off. Now. I shouldn't say they're jumping off from Amazon. That's not the right phrase. Amazon, they don't want to keep doubling year over year, the larger they get. I mean, obviously, if you're smaller, you do want that to get to a point where like, wait a minute, this is way too big of a piece of the pie. And so a lot of brands have hit that point. And they've, they've jumped over to direct consumer, then you have another chunk of brands who have been direct consumer and not necessarily going to go to Amazon, but because they don't want to their products to be discounted. And that's kind of weird that that first point I want to kind of jump into was you're kind of saying, you know, I've talked to enough brands now they don't want to discount but in a navigation Bri and Amazon back up, but the Amazon Subscribe and Save model kind of set off this, Hey, you're going to get a discount if you subscribe. You know, 5, 10 15%. So, you know, we'd love to hear your thoughts on how brands can can handle that side of it. And then we can keep going down paths as people send in questions.

 

George Ishii  5:18  

Yeah, yeah. So first of all, I'm not anti Amazon, I think, I think there's, there's a time in place, right for Amazon with, particularly with direct to consumer companies that are trying to build a brand, right. And so, for a lot of reasons, in the in the beginning, it's actually not not a bad move to be on Amazon. Amazon helps extreme like, it helps quite a bit with, with SEO, when you're trying to get out there, when you have your website and brand hasn't like established itself in the SEO world yet. Amazon could help with that, as well as positioning against against your competitors on Amazon, right, a lot of times you will appear next to your competitors there. But at some point, what we've seen with the larger brands is that they, you know, once they, they've established their brand and their name, it makes more sense for them to move off of Amazon to go direct to consumer, and basically for like their, what their website to be the funnel, the top of funnel through which all of their customers come through. And to have that have that consistency in everything and user experience and pricing in the way that they handle their subscriptions, like all of those things, right? Like you wouldn't, it would be very, very difficult to maintain both a Subscribe and Save existence and like a ReCharge subscription, direct direct to consumer, not only from a business logistics standpoint, but also from a user experience and consistency standpoint. And so I think there's a there's a good time in place for Amazon. But a lot of our most of our larger brands have moved off of Amazon and have been found lots of success, just having a singular point of communication and content with their customers to their website.

 

Aaron Conant  7:18  

Yeah, within. So for the brands that don't want to do a discount. What is that? Why do you dance around that from the being fully custom? You know, seems like the customer wants that. Right is. But is there an added value? Or is there just new ways? I'll kind of kick it over to you?

 

George Ishii  7:37  

Yeah, I mean, I think I think most of us would agree that all customers are price sensitive and price conscious, right. But I think they're they're, they're, they're different in the way that Amazon customers are price sensitive, right? Because I feel like Amazon is very quickly moving to basically a drive to the cheapest, fastest, most reliable way of getting something. And for me, those things are really important for a lot of things. But for too much for my direct consumer things that I purchase. In other words, the things that were I resonate with the brand, and I really, really trust and I'm loyal to the brand. Like I like I'm less price conscious about those things. Right. And so I think that's the first thing to think about is that, like, who are your customers? And how do they view price in the stacking order of how they're thinking about their decisions? Right. And so and that that's very specific to the product you're selling to, right. Some, like, for some products, especially subscription products, price is most important thing, but for other things, it's actually lower in the in the in the stacking order. Right. And so thinking about their sensitivity to price, right? And also like how discounting and price inconsistency will affect your brand. Right. And so I think that's what I've heard most from merchants in terms of why they don't want to introduce lots of sophisticated and complicated discounting is because it's sort of inconsistent, right? It's like if you see something for 20% cheaper on another channel, then you sort of like you don't trust going to the main website. I mean, that's one of the first things I do when I see a brand a product both on Amazon and from their website, right is like okay if it's cheaper on Amazon because if it is I'm probably gonna buy an Amazon and what does that say to me about your brand right? When something is discounted and cheaper, right? A lot of a lot of these go to my direct consumer brands, they like they have they have so much polish right around like the visuals and around their their voice and their marketing. And they they position themselves as as a luxury product even if the price is very similar the same, right? That's, that's marketing one on one, right? Like you could like if the perception is that it's more of a luxury product, but yet it's almost the same price or maybe five or 10%. More like the perception is is a value. Right? And so like, yeah, so that that's what I've heard from from merchants is that like, how does the discounting affect by brands, with ReCharge, you could set up we've seen merchants set up lots of really interesting ways to incentivize customers, especially subscription loyal customers with things like, like, like, surprise and delight free products, after X after X number of deliveries. And so you might get something free in your third delivery, right? Without even ordering, it just comes in the box, right? Or you or you might, you might, or the other thing that they'll do is sometimes they will send something else in between a delivery, right, something small and between a delivery. And so there's that opportunity to surprise and delight loyal customers without necessarily discounting the core product.

 

Aaron Conant  11:13  

Yeah, so I want to, you know, something that comes to mind, you know, is that added benefit, but it's also relationship driven, which we've we've chatted about before, is, you know, the customers are looking for, you know, the relationship, right with the brand, which obviously takes place via communication, and balancing tax versus email versus like, we were just chatting about direct mail, you know, surprising the light, like what, like, how do you how do you look at, you know, what do you think about ReCharge and leveraging, you know, a subscription based platform, it gives you the numerous other opportunities to engage in a conversation in mind. And we'd love to hear how you think about that in my how brands, you know, debating on whether or not they should have one for brands that have a subscription based program? How do they maximize? Right, that lifetime value of a customer? Right?

 

George Ishii  12:12  

Okay, that's a lot of different questions and one, but a very, very insightful question, Aaron, thank you. So, I guess. So our tagline and ReCharge is we turn transactions into relationships, right. And what we really believe is that at the end of the day, like LTV is connected to loyalty is connected to trust, right is connected to having a relationship relationship driving a relationship and establishing a relationship between your brand and your individual customers. Right. And so one of the ways that the best ways to your point of doing that is to have a conversation with with your customers, right? And specific to subscription subscriptions. Right? Subscriptions is a great vehicle for building a relationship with the customer, because you have this ongoing relationship with them, right? Whether it's ongoing communications, via emails, or SMS that gets sent out on a monthly or, or even more frequent cadence, or it's by them receiving the physical products in the mail that they get. And I think it's like, it could be argued that one time purchases also have that same thing because you a customer buys something one time, and then they get a drip campaign of emails that go through. But I think it's different because there's there's interaction, right? In the subscription model, right? For example, with ReCharge three days before your shipment, a customer gets an email or an SMS that says, Hey, your this is about to ship in three days. Do you want to change anything about this? Right? And like some people, some merchants are like, Oh, I don't want to give my customers the opportunity to cancel right before it's going to share, right? But what we actually see is that there's actually there's actually more people that that want to change their subscription, or one or want to add things to it, then people who actually want to cancel, right? And so that it's an interactive conversation, right? So in SMS, for example, you could reply to ReCharge SMS with I want to change my order, right? And then SMS says, Okay, how would you like to change order? Do you want to add something to it? Do you want to skip, do you want to delay? Do you want to change your order your order date to another date, and you can specify any of those things? And I think I think at the end of the day, I think that's what customers want. They just want transparency and they want to feel like they have the option to control the their subscription details. And I think it's kind of a scary thing for merchants. To unlock that, because they can easily cancel their subscription there. But I think it's a risk. And we actually have data. We have data that shows that, that transparency in the long run works. Like over time with your most loyal customers, they'll actually stay longer if you give them the opportunity, and you have that full transparency from the very beginning throughout their subscription program.

 

Aaron Conant  15:26  

So when you when you think about it, you know, from a, from a holistic standpoint, you know, are there are there certain product verticals that you, you kind of, I just think there's a lot of people saying, you know, what, this is one more thing I'd like to add in, I don't know if it's worth it time, effort, money, you know, a lot of stuff, you know, conversation or have the tech stack is already huge. You know, they're looking for either a reason to say, Hey, I'm all in or I'm all out, right, rather than kind of ride the fence. So the first one of those that comes up, hey, are there particular verticals that it doesn't work for? And then other particular verticals? I'm thinking even, like, beauty or something like that, where it's a, you know, absolutely a no brainer to get started?

 

George Ishii  16:14  

Yeah, yeah, exactly. So consumables, and health and beauty are the two verticals that that we there's just a lot of the merchants and the products just thrive in those industries, mainly because they their products sort of lend themselves to an ongoing sort of recurring, recurring model, especially consumables, right? So for example, we I just talked to a company that does smoothie cubes, right. And so it's really simple. You just throw six of these cubes into a blender with ice, and you planned it and you got an instant smoothie. And what they do is that they connect the smoothie to you in a very, like, personal way, right? In ways that like Jamba Juice doesn't do right. And so they connect it to how are you feeling about your life right now in your life right now? Right? Like, are you feeling low energy? Right? Are you having trouble sleeping? Right? Do you have you right? There's so there's all these, so and then they actually have formulas? With the supplements and things inside the smoothie that sort of react to and help what's going on with your life. And then in their in their subscription program. Like I said, they have this this communications relationship with the customer. Well, they're they're like, Okay, how's how's this week? For you? Right? Do you have energy? But are you having trouble foot with focus? Right? Or do you? Is this a Zen week for you? Are you going on vacation? And are you? Are you going on vacation? You want to Zen week? Right? We can send you that this week? Right? And so that's a really creative ways to use these old models in very, very creative ways. And so, yeah, and so it's just another way of thinking about, like, so one of the things I've been thinking about right is, yeah, so in these in certain verticals, it's very easy to build a subscription program, right. But how about in the verticals that that aren't traditionally, subscription based products, right. And so I've been thinking about this idea of subscribe, ability, right? Subscribe ability of products. And this sort of occurred to me one day, when I was looking at the ReCharge data. Now I was looking at how many stores have a high ratio between one time products and subscriptions, right. So on ReCharge, you could sell one time products as well as subscription, you can see the data, you know, you can see the data. And we I basically created this index that shows, you know, all of our merchants and like which one of them actually have very, very high one time to subscription ratios, right. And trying to dive into that and figure out why. Right. And so for a lot of them, the one time purchases are things that they haven't activated subscriptions around, right. But for a lot of them when I was looking at them, I was like, wow, like, this could become a subscription based product, right. And then I went through this exercise, Aaron was looking around my own office right at these products. And I was like, Yeah, most of these products probably are not subscribable. Right. So I looked at like shoes, running shoes, for example. Right? And I was like, No, that day, how could you turn the system and I thought about I'm like, take a step deeper. I'm like, wait a second, like, you know, for people who run a lot like the shoes wear out, right? And they do need right not every month but like at some point, you sort of do need shoes, running shoes. I'm going based and I looked at like, cell phone cases, right? I'm like, No, that that couldn't be a subscription. Right? And I'm like, wait a second, I have a pile of old iPhone cases, right? And then it's like, okay, well, I do run out every once in a while. And in fact, some people use iPhone cases as an accessory to their iPhone, right? So I'm just like, wow, like if you start peeling the layers of the onion and taking a deeper look into subscribe ability, right? A lot of these products can be subscribable. And like I would love for ReCharge, to empower new ways of merchants to see their own products that they have dismissed, as subscribe built as ascribable, and really, like, awaken like the entire industry to subscribe ability. Does that make sense?

 

Aaron Conant  20:51  

No, it does. I mean, I'm just even thinking, you know, as a takeaway, because that's, you can almost just use the data, right? I background, I'm a scientist, right? That's what I did for six years, right? And it's all data driven. Like, take a step back, get off the call here, you're wondering whether or not it's good or not jump into the data on the back end, you see the same people, same customers ordering the same product, or a similar product over and over again, then run that, run what they're ordering, run the frequency of it. And then you really quickly get, like, to a use case of hey, whether or not it's going to work. And if you've got, you know, 2010 to 15 to 20% of your your customers doing that sounds like a perfect model that could easily work and it'll simplify things on the back end. And they'll probably actually like it better, as well. I mean, sounds kind of like what you did. I'm just trying to like, yeah, yeah, I don't know, a Free Chart. I don't, you know, I don't know a subscription is right for me. I don't know, in a lot of cases either mean, so but you can jump back in and take a look at the data. Love it.

 

George Ishii  22:05  

Exactly. And so one of the things that we spent a lot of time on is, is data and analyzing the data, not only giving tools for individual merchants, to look at the sort of state of your subscription product, and to build insights into that, but also looking at holistically the data holistically, not only inside of ReCharge, but also in, in anonymized data that's available from the industry, right. And trying to understand and look into the data to see what the data is telling us about today. And and leading us into the future, right, because at the end of the day, like we ReCharge needs to figure out where subscriptions will be in three years, right, as well as addressing the needs of merchant the immediate needs of merchants today. And so one of the things that we've done is we've we've taken a lot of that data and the insights that we learned and we put it into a free report. And it's it's actually called this the ReCharge's state of subscription commerce report. And it's a it's a white paper that you could download for free. So you can just search that ReCharge for anyone who's interested in taking a look at that your your vertical will be in there. And there will be some data around the various verticals, as well as how we think about data and how we're thinking about subscriptions moving forward into the future. So I don't want to advertise. But I know that like I want every person in the room to walk away with something that is helpful to whatever's top of mind. And so and also to that point, like, if there are any questions, feel free to ask the questions, I'd love to have some time Aaron at the end to address some of the questions that the audience has.

 

Aaron Conant  23:52  

Yeah. So really quick, lead just dropped in. We can drop in that link to the report, but also, so a question comes in, you know, is there a Subscribe and Save. So, you know, essentially, right subscription base with the saving solution on the back end. So striving safe solution for merchants that only utilize a local delivery system. So like food, meal kit delivery, right, or meal prep delivery, you know, in a very localized area, these are popping up all over the place. There's the huge ones, but there's also, you know, the more localized ones.

 

George Ishii  24:30  

That's yeah, that's that's a phenomenal idea, right? I mean, this and this comes back to like the social scalability of blank, right? It's like the subscibe ability of blank. And like you could fill in, you just throw anything in that blank. And then we could have a conversation right around what's possible in that in that in that in that blank, whatever it is, right? And it's like, okay, local food delivery, right, or local food prep and delivery. It's the perfect example. Right, exactly. What are the scalability aspects of that? Right? Particularly around like, locality, right? In a very, very small thing, right. And the way I generally like to look at things is that is that it's always it's always good to start local, right, and to have those guardrails and to use that as an experimentation base, as you think about going larger to bigger geographies, right. And so I think it's, I think it's a great testbed for, for testing, like a Subscribe and Save solution for local delivery. I think that's a great idea. And, you know, naturally, you'll probably have a split between people who just want to order once, and those that want to order on an ongoing basis. Right. So. So it's actually so the other thing that I just thought about, right, is that one time purchasing is also Yes, should be looked at as a gateway and an on ramp to subscriptions. Right? So I'd like I think that in the beginning, most of like, with, with a lot of these brands and the beginning, most of their customers are one time purchases, that they don't want to they're not interested in a subscription, because primarily because they've never seen or tasted or used your product, right? And so it's very difficult to convince someone right to buy a subscription, if they already have the mindset that it's not a subscription, right. But if they purchase your product, they like it, and they come back to purchase it again. Right, that says something very different about them. Right? And I think I think now you treat them as a potential a strong candidate for a subscription, like, customer, right? And so you create a different user experience for them, right. And so, for example, I was I was using Uber, right. And I use Uber at the exact same time on the exact same day to go to the exact same place. And Uber knows that. And so after the second or third time of doing that, I think it's the third time of doing that, it send me a push notification that said, Hey, do you want me to call an Uber now for you? Because I know you're about to go somewhere. And I know, this is where it's gonna be right? And so that's, that's an example, I think, of creating a user experience based on data. Like you were saying, Aaron, right, the fact that Uber is clairvoyant enough to know that I'm about to go somewhere, it's like reading my mind, right. But what if you apply the same thing to food? Right? It's like, for the first time subscriber, maybe I mean, for the first time purchase, or maybe not, like, if I'm trying to buy a taco plate? Maybe not try to sell me on the subscription. Right. But if I come back again, right, maybe that's the right time, because it's always it's always about hitting hitting the customer at the right time, with the right offer, right. And you do that through data. But you also like have to think about how you design subscriptions into that. That mindset. Right? So I think I think maybe I went beyond what the question was, but like, I think the super interesting, right, it's like, subscribe ability of blank.

 

Aaron Conant  28:10  

Yeah, I love it. Because, you know, I've had a lot of conversations now around like, CDP's that I wasn't having two years ago. And kind of what you're saying is, you know, delivering the right message in the right format, at the right time, based on who that person is. Right? It goes, there is personalization, there's the freebie personalization, and then there's a there's a cohort, you know, I know, you know, 10,000 of my customers, you know, 3500 of them app this way, and you fall into 95% accuracy that this is what it's going to be. And then so do you see, like, I don't know how much you jump into, like the CDP discussion. But are you tying into like a CDP to determine, hey, we need to send these notifications, you know, via ReCharge about a subscription, either a an offer pay should you know Did you know it's about the ship? Do you want to add anything to it? Do you want to cancel it? Like whether there should be an email, it should be an SMS, whether it should be direct mail, we'd love to hear you know, your thoughts there. How you guys look at getting the right message via the right avenue to people?

 

George Ishii  29:21  

Yeah, yeah, that's a good, that's a good question. So, as I said earlier, like ReCharge is really diving into data. I mean, we have so much data now that it wouldn't be smart not to leverage that for for the, for the purpose and the advantage of individual merchants. And so we just skim the surface, but we actually skim the surface, but we actually have ways to drive insights for individual merchants now. And so one of the things that is actually in beta right now, is we have a churn prediction score for every single month. I mean, every single customer underneath a merchant, right. And so we have, we have a score that we that we give to every single customer that, that predicts when they will turn, but actually, more specifically is it predicts if they will churn in the in the next 30 days. And, and it's a, it's a stack ranking. And then and so that so the first step is to create into tune that that score. And so what we're doing is that we're looking at the entire population of data. And we're, we're, we're tuning our, our algorithms, based on historic data, to make sure that those are as accurate as possible. And then what we're doing is we're we're providing those like that data, both internally to everybody at ReCharge internally, and all the tools in ReCharge eternally, as well as externally to anyone who wants to use that as well. And so for example, what you could do an SMS in the beta program, is you could have a different message for those that are like crosses a certain threshold of churn predictability, right? So if we're fairly certain that you're going to churn, you could, you could, you could give him a different message. Like, you could say, hey, guess what we're, we're throwing in, like a dog treat with your dog food this month, right? And for those who aren't going to turn, we don't do that. Or the merchant doesn't doesn't have to do that, right. And so it's a way of sort of optimizing, you're automatically optimized, are you actually giving the merchants tools to automatically optimize the LTV of of their their entire subscription base, it works the other way around, too, right. So like, you know, we have, we also have listen segments of your most loyal customers, so that you could reward them or you could act differently, according to these different segments.

 

Aaron Conant  32:07  

Also, if I'm a consumer, really erratic behavior may pay off.

 

George Ishii  32:14  

That's right, that's right. Act like you're gonna cancel every week. And you might you might get all kinds of good stuff.

 

Aaron Conant  32:19  

Yeah, I mean, I think it is the next level of, you know, I call it digital 3.0, where you're connecting everything on the back end. And most people don't realize that happening, right. I mean, you think about in that case? You know, we did earlier today, we did a call on direct mail, well, if you know that, and you know who they are and what they're buying, they don't even have to send, you know, maybe you send them a 10% off coupon, you know, code for whatever product they want. Right? Like, there's so many ways, and, you know, in the back of their mind, like, well, that's weird, I was just thinking about, you know, canceling and this shows up, it's pretty nice. You know, they don't know how connected everything is the back end. And that's where I think people have to get to, right, you have to be tying in everything holistically. And looking at how am I using my entire tech stack, to engage not to sell a product? But you know, obviously, at the end of the day, we want to sell product, right? But how do I start? How do I start a discussion and conversation or relationship with the customer, such that they want to interact with me? And in that case, they don't want to leave? They'll continue to buy things from me. As long as I'm providing them some kind of benefit back?

 

George Ishii  33:35  

Yeah, yeah, you want it? So there's a few things I like when I think about that, right. At the end of the day. Like, I think what we want to do is we want to create a mutually beneficial transaction, right? or community or point of communication. Right? The problem with traditional marketing platforms is that sometimes they don't, they don't nail that right. And so, and all it takes is one, like misinformed, or not perfectly accurately, targeted email for me to cancel, right for me to unsubscribe, or for me to cancel the SMS, right? And so it's like, how do you create that mute? Like, how do you create a situation where almost every time I'm reaching out the merchant, me as a merchant, and reaching out to my customer, I'm actually giving something that they want or that they need? Right? And so that goes back to that transparency? Right? And so it's like, it's like, So, number one, how do you create a mutually beneficial relationship with customers every single best every single customer touch point? Number two is give first and then ask, right? And so for example, it's like the the notification that goes out three days before, right? It's like, hey, we just want to let you know that you could still do something about this, right? And so we're giving you like ability we're giving you optionality. Right? We're giving you transparency, right? And then after that, after sort of you satisfy that, then you can start to ask for something, right? So you might ask, Hey, do you want to add the dog treats? Right? To your your food subscription, right? Or do you want to add the brush your to your to your shampoo subscription? Right? So like, give first and then ask, right? And then yeah, and then just try, like, try to target as best you can with data, and try to leverage data so that you know, like, data is sort of like the backbone of personalization, right? In order to get true personalization, you really have to have like, you have to have the right data. And so that's something that we've spent a lot of time and money at ReCharge, investing in, like, at the end of the day, like we want to, it's all about, like, it's all about personalization, and knowing as much about the customer before we reach out to them as we can.

 

Aaron Conant  36:04  

Why do you think, like most subscribers Sure. Buy it. Maybe that's a question, you know, to take back to the data team. Maybe Maybe you've seen it already. But yeah, why do you think most subscribers churn? Yes, you have some red flags that people have? That seems like it. That's why I think your beta test is awesome is if you want to red flag this person, they don't they don't want to have to send that follow up. You know, communication, they sorry, we just saw you unsubscribe. Why? Right like that? Yeah, they want to catch it ahead of time to say, hey, you know, what can we do for you? So I don't think right?

 

George Ishii  36:46  

Yeah, we have, we have a lot of data. And some of this is actually in that report that I talked about earlier. Because in ReCharge, if a customer tries to cancel their subscription, there's actually a cancellation deflection feature in there, where we actually ask the customer why? And based on why we could try to incentivize them not to cancel. And so we pick up a lot of that data there. But most of the reason why is because they just they don't like the product. Or they don't like the product, and they're not interested in receiving it again. Right. You know, it's as simple as that. But I think the the other interesting points are that I have too much product. That's why I'm canceling. Like, I have, like, three months of coffee that you sent me, right? And I don't need anymore, right? Or I went on vacation, and I got back. And I mean, they were like, they're like two bags of coffee on my doorstep. And now like, I have too much, and you charge me for it, and not happy with it. Right? Like, so it's like the cadence of delivery is actually really important. Right? But to me, it really comes down to that transparency, right? Like if if in your DNA as a brand, you believe that transparency in the long run wins, giving optionality and control to your customer wins at the end of the day, and our data shows that by the way, right? Then, then I think that changes that changes the game, right? Because then the customer won't have too much product because they could easily change the cadence. And, and if they don't like you, or they don't like your product, then they'll they'll cancel. And that that and that's actually okay. So one of the things that we saw with ReCharge when we're looking at I mean, ReCharge SMS, for example, when we're looking at the data. So we looked at, we looked at cohorts, a whole bunch of different cohorts, right. And we're trying to understand the impact that SMS has on, on on LTV, but more specifically on churn. Right, like, and so basically what happens when we looked at like, hundreds of 1000s of records, is that we found that the people who are going to cancel cancel earlier. Right. And that includes a giant giant cohort of people who just signed up to get the discount. And then they with the intention of canceling immediately after the purchase, right? That's a big cohort actually used to arise. How many people do need to do that they sign up for subscribing say, to get the 20% discount and then be cancelled immediately. Right? That seems like a lot of work. But there's a lot of people do that. Right. And so anyway, right? The counselors cancel earlier, because with SMS, it's a lot easier, right? But guess what, like the remaining of the cohorts actually stay on longer. Right. They actually stay on longer and that and to me, like the reason why they're staying on longer is because they trust you and they're more loyal. Like that's that's how I read that. And surprisingly, like if you look at the entire cohort, right see, it's As the 10,000 customers, subscribers that joined in January, and you're looking at the data in December, if you look at that, sorry, if you look at that entire cohort, the entire cohort actually made more money, even though the earlier people, the earlier camp that the counselors cancelled earlier. And so in other words, the loyal customers accounted for more of an increase, then the early cancellers. accounted for. Right.

 

Aaron Conant  40:31  

Sorry, so the question comes in around increasing subscribers, right. What's the number one method for increasing subscribers? I think that's, yeah, it probably popped into somebody's mind when you said, hey, the 10,000 we added last week, last month.

 

George Ishii  40:46  

People adding 10,000? Yeah, yeah, some merchants are definitely adding 1010s of 1000s per per per month, for sure. We have some very, very large merchants. But that's that's not that's not the average the average merchant, right? So maybe, yeah, so. Yeah, so. So we were talking, I was talking to a merchant who said that, but the thing is, because of the subscription economy, and the way that it works, it's MRR monthly recurring revenue. The dynamics change quite a bit, right. Like, if you have a fight, like we had a product, we have one merchant whose average customer stays on 10 months. So 10 recurring. And they're I think their average order value is like 70 something dollars, right? And so even if it costs a lot of a lot of money to acquire those customers, right? Like, the, the, the economics of that relationship is, is pretty, pretty amazing, right? And so when we I was talking to someone merchant who said, I, you know, I made it, because I asked her I was I asked her, I was like, Well, you had a day job, what made you quit your day job, and jump into this full time. And she said, as soon as I hit 50 subscribers, I told myself, I was going to, I was going to quit my day job. And to me, that seemed kind of low, until I started looking at the, the the economics of it, right. And I was like, wow, like, that is a significant sum of money. Like with only 50 With only 50 customers. And now she has like 10x that, and she's growing very, very quickly. Right? So it was a good option for her to quit her day job, right. So it doesn't take much in the subscription economy, like do the math, right. It doesn't take a whole lot. If you struck a an emotional chord with your customers, and you figured out how that subscribe ability equation, right, or at least you have some early, some early traction in that area, to run to run an interesting business. And going back to your question. So how do you increase subscribers? Right? So the it comes down to the details of this discussion? Program, right. And so a lot of people like I think part of it is a lot of experimentation. And so one of the things I've seen with, like one of the core proficiencies, that I've seen, between highly successful subscription merchants and non is that the highest subscription merchants have done a lot of experimentation along the way. And it wasn't always, you know, data driven. I did all the analysis, I know who these customers are, it was just like, hey, I just tried this. And it worked. Right? I tried this for like a couple of months, and it worked. And we just doubled down on that. And then that's how we arrived where we are today. In fact, most merchants have found their way to subscribe ability and to increasing their subscription ratio. But like so for example, one way of doing this is for example, is the UI, have your single purchase to SUBSCRIBE, like, subscribe, and save, or even what you call it, right. And so a lot, there's a lot of nuances in that UI. It's like it's basically in the the PDP page. And in the product details page, there's typically two radio buttons where one is subscribed. One is one time purchase. And then the second is subscribe and save, save 20%. Right, but there's a lot of nuances. So sometimes merchants will do something as simple as defaulting to subscription, the radio button, right? And then just being very clear that you're buying a subscription throughout the rest of the checkout process. Right? And they'll see like some pretty some pretty incredible increases in subscriptions subscription ratio, just by doing that, or sometimes what they'll do is that if the subscription if the subscriber safe option is behind the link, then they'll just make it more prominent, right? Or they'll like have just a little different, like UI or, or like graphics treatment around this around the subscribe option. Right. So there's, it comes down to the details of the UI and the experiment experience. That's one. The other way to doing it is experimentation on the paid ads, to take them directly into Subscriptions, right. And so like having lots of different campaigns and experimenting in the way that you're trying to position, a subscription, and then from that link, it goes straight into a subscription only landing page, or at least the product details page with subscription, like defaulted. So that I could talk about this for a long time, a lot of a lot of different ways to try that. But at the end of the day, it's specific to your own product, your own the DNA of your brand. And like how much time you have to really get in there and start experimenting?

 

Aaron Conant  45:50  

Yeah, I really like the analysis around, like, what is the lifetime value, because if you can see that your annual, you know, if your MRR is, or maybe it's 10 months, 12 months out, oh, he completely changes the budget to be applied. Yeah, you know, for that first time sale, right, where it might actually, you know, completely outpaced the overall cost of the item. But it doesn't matter, because you're going to multiply that by 12 on the back end, and you've lost one month of revenue, but it completely changes the dynamic of paid media performance marketing. Now that doesn't drive necessarily subscriptions directly, it changes the top of the funnel, which then, you know, changes the amount as they walk through the funnel and therefore raises the subscriptions. Well, that's interesting. So I also, you know, to, you know, there's a lot of companies, everybody's jumped online, that cost customer acquisition cost has gone through the roof. Well, how do you recoup that? It's really tough to unless you're adding an incremental revenue option, which is upselling. Or subscription is another way to do it. And it's just that light bulbs going off, which is really cool.

 

George Ishii  47:09  

Yeah, yeah. I mean, if I were a merchant, right now, I would, I would really be leaning into retention and LTV. Because for the meantime, customer acquisition is just a mess right now. And, and it's it for until we figure out a better way to have more accurate and focused paid, it's going to be for this season, it's going to be really rough and tough. So I would lean into my existing customer base, and figure out how I would do that figure out how to retain the the existing subscribers, even if it costs more money, like I would rather spend money on my existing subscriber base than to try to acquire new ones today. Right? But of course, you need top of funnel, right. But on the top of funnel side, I would probably experiment, like I said earlier with ways to take customers directly into Subscriptions. And it depends on your product, right. And I might be sounding like I'm, I'm conflicting myself. Because I'm talking about I talked one time about, like, selling a one time purchase first than waiting to sell two subscriptions. And now I'm talking about selling directly to subscriptions. But it's it's case by case basis, right, we have lots of merchants who are whose only sell subscriptions they they don't like they don't even want to deal with one time purchasers. Right. And that follows through everywhere, top of funnel acquisition all the way through to check out it's subscription only. And they're actually not interested in one time purchasers. So for their organic traffic that comes through that for all of their organic traffic, there's no option to buy one time at all. Like if you if you don't want a subscription, then they they you know, they they've used they've used as a way to streamline their business so that they could focus entirely on subscription customers. 

 

Aaron Conant  49:03  

Awesome. And I see where we got just a couple minutes left here. You know, I do want to say thank you to everybody who dialed in and sent the questions. And you know, George, obviously, you know, thanks for your time today. Again, anybody have follow up questions 100% worth putting time on the calendar, the team and ReCharge have been great friends, partners, supporters of the network as a whole and are working with a ton of brands in it. So if you're interested in learning more, these guys are the leaders in the space. And you know, from my side, I'd love to have a conversation with you to pick your brain and lay what are the newest things that are happening in your space, but also Hey, what are the additional events we should have? But you know, George key takeaways for people on the line today.

 

George Ishii  49:42  

Yeah, I think our tagline says it all right. Turning transactions in into relationships and try to try to figure out a way to strike an emotional chord with your customers and to use that ongoing communication, whether it's email, SMS or the package that arrives, as soon as a conversation, like you would have a conversation and build a relationship with another person, I think that's one thing. I think the to the second thing is, is the subscribe ability of blank, right thinking about your own product line, and like how you can move these products more into, like a subscription based, and then not only your existing products, right? Like how can you think about when you think about your own product roadmap of things that your your product lines that you're you're you're hoping to introduce and expand how you can make subscribe ability, a part of that mindset. And then also, like, I guess the last thing is just like, we've talked a little bit like a lot about personalization, right? And using personalization and customization as a competitive solution, right as a competitive advantage, instead of trying to be the same as everyone else, how you differentiate and customize as your competitive advantage over your your competitors.

 

Aaron Conant  51:04  

Awesome. Love it. Well, you know, thanks again, George, for your time today. Thanks to everybody who dialed in the profile email from us. We'd love to have a conversation with you. With that. We're gonna wrap it up. Hope everybody has a fantastic Tuesday. Have a great rest of your week. Everybody. Take care. Stay safe. Look forward to having you at a future event. Awesome. Thanks again, George.

 

George Ishii  51:21  

Thanks everyone. Bye

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