Transforming a Transaction Into a Long-Term Relationship

Jun 29, 2021 12:00 PM1:00 PM EST

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Key Discussion Takeaways

Does your brand struggle with customer retention? How can subscription models make or break lifetime customers? Is digital strategy worth your time and money? Ask Jay Myers, Mike Sanchez, and Derek Cwik.

Jay Myers is the Co-founder and Mike Sanchez is the Chief Revenue Officer at Bold Commerce, a company focused on building powerful, flexible, and customizable eCommerce apps that make online stores more powerful. They’re joined by Derek Cwik, Director of Integrations at Americaneagle.com. Americaneagle.com is a digital marketing agency that uses the power of technology to positively transform business practices. They create the dream team when it comes to digital strategy for eCommerce brands, and they’re here to give you their tips and tricks.

In this virtual event, Aaron Conant talks with Jay Myers and Mike Sanchez, Co-founder and Chief Revenue Officer at Bold Commerce, respectively, and Derek Cwik, Director of Integrations at Americaneagle.com. They discuss how to navigate discounts, what to offer in subscription models, customer acquisition and retention, and much more.

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

 

  • Jay Myers and Mike Sanchez analyze the top-performing subscription models specifically for the CPG space
  • Derek Cwik explains how churn rate is related to digital strategy
  • How subscription models have become more sophisticated
  • Tips on retaining customer retention and acquisition
  • How to navigate discounts and sales
  • Why human connection and brand story matter
  • What KPIs should you aim for in terms of time and money spent on digital strategy?
  • What to offer in subscription packages
  • The hidden potential of gift subscriptions
  • Why you should perform a customer journey mapping exercise
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Event Partners

Bold Commerce

Bold Commerce is an eCommerce technology company that helps create and customize commerce experiences, across all channels.

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Guest Speakers

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.

Jay Myers

Jay Myers

Co-Founder at Bold Commerce

Jay Myers is the Co-founder of Bold Commerce, a company focused on building powerful, flexible, and customizable eCommerce apps that make online stores more powerful. Before starting Bold Commerce in 2012, Jay was the General Manager at Hippo FM and the Sales Manager at Heartland Archery.

Mike Sanchez

Chief Revenue Officer at Bold

Mike Sanchez is the Chief Revenue Officer at Bold Commerce. Bold Commerce is dedicated to creating a seamless online checkout experience. They provide subscriptions for a checkout pricing engine with a strong API commerce platform to take checkout experiences everywhere. Mike has worked in eCommerce since 2011. He was previously the Vice President of Partner and Agency Sales at WP Engine, the Senior Director of Global Enterprise Sales at BigCommerce, and the Director of Enterprise Sales and Success at Rackspace.

Derek Cwik

Director of Integrations at Americaneagle.com

Derek Cwik is the Director of Integrations at americaneagle.com, a web design, development, and digital marketing agency with a passionate belief in the power of technology to positively transform business practices. Derek has been with americaneagle.com for over 13 years.

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.

Jay Myers

Jay Myers

Co-Founder at Bold Commerce

Jay Myers is the Co-founder of Bold Commerce, a company focused on building powerful, flexible, and customizable eCommerce apps that make online stores more powerful. Before starting Bold Commerce in 2012, Jay was the General Manager at Hippo FM and the Sales Manager at Heartland Archery.

Mike Sanchez

Chief Revenue Officer at Bold

Mike Sanchez is the Chief Revenue Officer at Bold Commerce. Bold Commerce is dedicated to creating a seamless online checkout experience. They provide subscriptions for a checkout pricing engine with a strong API commerce platform to take checkout experiences everywhere. Mike has worked in eCommerce since 2011. He was previously the Vice President of Partner and Agency Sales at WP Engine, the Senior Director of Global Enterprise Sales at BigCommerce, and the Director of Enterprise Sales and Success at Rackspace.

Derek Cwik

Director of Integrations at Americaneagle.com

Derek Cwik is the Director of Integrations at americaneagle.com, a web design, development, and digital marketing agency with a passionate belief in the power of technology to positively transform business practices. Derek has been with americaneagle.com for over 13 years.

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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

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 are 1000s of brands that do exactly that we network and now and share together to stay on top of the newest trends, strategies, pain points, areas of interest, anything that shaped in the digital space as a whole. We all connect with 30 to 40 brands a week just to have a one on one conversation around digital strategy. And it's through those conversations that we get the topics for these calls. So we're gonna have a conversation with anybody after the call today, kind of pick your brain and what's the newest things you're seeing and get the topics for future events as well. I also do a ton of help with partner selection. So if you're ever looking for any kind of help partner selection across the board, don't don't hesitate to reach out. Always, always happy to have a conversation. The last thing is we have to get started here. informational educational as possible. Drop as many questions in the chat as possible. You can always email them to me as well. Aaron, aaron@bwgconnect.com. And I guess actually, the last thing is, we're starting a few minutes after the hour. And we're going to wrap this up with a few minutes to go as well. So be looking at your watch no three to four minutes in the hour, we're going to be wrapping this up in allow you to get on to your next meeting without being late. So that being said, You know, I think a big push that I've been hearing from brands and talking to is Hey, how do I make eCommerce, anything writer as consumer site or whatever it is more profitable as a whole. In one of those ways, there are a lot of questions around subscriptions as a whole. And so we got some great friends, great, great partners in network over at Bold Commerce on the line today as well as American Eagle. And we're gonna have a great all around conversation and in don't hesitate to drop any questions in along the way. But, you know, Jay, I'm gonna kick it over to you first, if you want to do a brief intro on yourself and Bold. That would be awesome. And, and then we can kind of go round robin here over to Mike and then over to Derek as well. But you know, Jay, I'll kick it over you first.

Jay Myers 2:16

Yeah, awesome. Make sure I'm not muted. Nice to meet everyone. My name is Jay Meyers. I'm one of the founders at Bold Commerce. Bold is a we're an eCommerce technology company that we focus on the check the full checkout experience. So we work with some some of the largest brands in eCommerce such as Staples, Vera Bradley, Pepsi, really helping them focus on creating amazing checkout experiences. And a lot of that revolves around subscriptions. So we have one of the leading subscription platforms. And it's not just subscriptions, but it's through the checkout and then the post checkout experience and flows to the checkout. So you know, there's a lot of talk about one page checkouts, one clicks, checkouts, we look at the whole experience, and what does it mean, for b2b customers for b2c customers, new customers returning customers. And then we wrap a price rules engine around all of that, without going into ton of detail. But that creates allows us to create really unique experiences for VIP customers, wholesale customers, regional based pricing, different things like that so we can solve some really unique subscription challenges.

Aaron Conant 3:26

Awesome, we're going to get into a bunch of that today. Oh, Mike, I'll kick it over to you a brief intro and yourself would be awesome. And then I'll kick it over to there.

Mike Sanchez 3:33

Sure, yeah. Mike Sanchez. I'm the Chief Revenue Officer at Bold Commerce. Been at Bold since November 2019. Also helped build out our first US office here in Austin, Texas. So been really great working with a lot of brands and also work with American Eagle. So excited for this conversation.

Aaron Conant 3:51

Awesome. Derek, I'll kick it over to you.

Derek Cwik 3:54

And lastly, to wrap it up, me, Derek Cwik. I've been with American Eagle for 13 years. Last week was my baker's dozen anniversary. The first half of that was really run delivery. So I was working on front end, back end integrations. This latter half has been really around solutions engineering. So I help bring our sales team and opportunities. solutions like Bold to the table to help them grow and be bigger. For all of you on the phone wondering, why is a retailer here or an airline company? We are neither of those, we're a digital agency. Based out of Chicago, we've got about 600 employees globally. We've been in this business before eCommerce was a thing so we started in the mid 90s and have been successful since then.

Aaron Conant 4:40

No, I love it. I actually use American Eagle when I was at Paragon back when I was on the branded side so.

Derek Cwik 4:45

Oh okay. Yes, yes. That was the most Yukiko days.

Aaron Conant 4:48

Yeah, yeah, right. Yeah, yeah, exactly. Yes. Too funny, yeah, cuz I'm over here in Kalamazoo, but, you know, I want to I want to jump into a couple things. You know, there's a ton of different subscription models that are out there. And maybe I'll kick this to Jay first. And then we can kind of just, you know, do a round robin and get thoughts in as a whole, but a lot of questions around, you know, subscription models as a whole. What are the top performing, you know, subscription models, you know, specifically, you know, food beverage CPG industry as a whole, we'd love to hear your thoughts there. Because there's a lot of different things questions are being asked, and it's tough for me to answer it not being the resident expert there.

Jay Myers 5:29

Yeah, for sure. Um, yeah, we actually wrote an eBook recently. And we kind of filtered we have around 20,000 brands using subscriptions. And we filtered it down to seven models. Food and Beverage, the two that are really common and work really well are what we call builder style. So that's like your you'd think of a meal plan but doesn't have to be a meal plan. It can be any it can be drinks, it can be smoothies, it can be a chocolate bars, it can be anything. But there's two things customers want when they're food and beverage, they want choice, but they surprisingly also want curation. So they think they want choice. But they also want to be surprised and delighted. So some of the brands that are really doing well. They have the experience that the customers can select the flavors, select the meals, like the drinks, whatever it is. But then they also have an aspect of surprise and delight, we actually worked with a brand recently that had an AI tool to if a customer didn't update their doesn't update their flavors every month, their AI software picks something that they think they would like based off of previous selections and then inject it in. That's really those models work really well. For in specifically the food beverage space.

Aaron Conant 6:48

Awesome. Love it. Is there what he's talking about, like surprise and delight is that is that a key thing that you see like is a game changer? And then what is like subscription retention rates look like, you know, is there a before and after if you have that in there?

Jay Myers 7:04

Yeah, so this falls under the curation. So broadly speaking, you could lump subscriptions into three categories, curation, replenishment, and access. And so replenishment is what what it sounds like it's replenishment, it's the same thing over and over curation is some aspect of curated products, meals, whatever the subscription is, access is giving access to either exclusive content, exclusive pricing, exclusive products, exclusive events, offers partner discounts, the list goes on. Actually, those work really well in health and wellness and other verticals. And often it's not even about the product, it's you you sign up for something like a teeth whitening kit, but then you get access to a program to have healthier teeth. And it's not even a product delivered every month, but in the in the food and beverage curation. So the surprise and delight is is really what helps give that ongoing value that the customer like everyone gets subscription fatigue and everyone gets tired of something, whatever it is coffee, the builds up, everyone gets tired of it. And so giving curated products is actually one of the big contributors to retention because customers you kind of get ahead of that subscription fatigue, introducing them to new products that obviously then helps retain them. You want me to-

Aaron Conant 8:37

They're the yard crew decided to show up out here. I want to jump out here, you know Jennifer, can we jump out to you and love to hear your thoughts he you know, just in this space subscription space as a whole is is something that you're tackling. You know, one of the biggest pain points that you're seeing if you are or obviously if you have any general questions for the for anybody you know, Jay, Mike, or Derek, but you know, brief intro on yourself in the organization be awesome.

Jennifer 9:04

Yeah, sure, no problem. I have a barking dog. It's just on and off. And so we are a small emerging brand in the food space and we started a subscription only and because it's brand new, for the first time to put whole food in a pouch people were not trying it. So we now have a one off model and a Subscribe and Save. And so that's where really our pain like the word learning cuz it's only been active for a few months how to take these people that are actually trying it because they can one time purchase and convert them to Subscribe and Save.

Aaron Conant 9:37

Yes. So Jay, Mike, any thoughts there on, you know, key things that that how like, get that engagement. You know, we'd love to hear your thoughts there. And then obviously from the churn side as well. I mean, that's probably another, you know, concern, right?

Jennifer 9:53

Absolutely. And we're still learning what our churn rate is exactly. And unfortunately we don't because we're so small and new I wish we could introduce new products all the time, but we haven't been able to do that yet. some challenges that way.

Jay Myers 10:10

I definitetly have thoughts, but I want to let others go. But I'll go if you want me to.

Derek Cwik 10:15

Yeah, well, I guess I'll just jump in and just mean more generally, since hopefully, maybe my answer can address the larger crowd as well. So one thing that we like to do when we engage with with someone like you, Jennifer is, go through your, what we call our GSAT or digital strategy of what are your goals as a business? Right? What do you hope to achieve? And I think you just outlined a couple of them, right? You want to convert a one time buyer to a subscription buyer, right? So strategies, the S comes in next, what can we do digitally speaking, to help act on those strategies to meet those goals? Then we have objectives, those are the metrics that we can track churn is one of those metrics, right? It's measurable statistics, it's got a timeline against it. And then tactics, right, so how do we make sure that those objectives, keep meeting, right, to meet our strategies to meet our goals? So in part, you know, there's a lot of things we could do. But what's best for you as a business is really dependent on those G SATS, things like time, budget staff, right. And we've got a lot of tools in our toolbox to manipulate to start addressing those. Some of the things that we often are very surface level that apply to everybody is, you know, reducing friction in customer experience, make it easy for them to do business with you, right? If you are in looking to offer a subscription model, how do you get that out? How do you how do you vocalize and market that to them. So what we see is a lot of new businesses are on maybe Shopify, and when they're on Shopify, they might be using like, Klaivyo or some other marketing automation tool, right? Let's think about how we can leverage your existing tech stack to tie into those objectives to drive this new, new line of business because adding subscriptions is not just like adding a Buy Now button or, or just bolting on something, it's a whole new operational side of business. You gotta address the experience side, the operational side, and the customer service side, right delight across all those touch points.

Jay Myers 12:31

Yeah, I would just I think Derek nailed it. That's one of the what you just said, describes how a lot of brands approach subscriptions. They're a one time product company. And they want to start doing subscriptions. And I refer to it as slapping on a Subscribe and Save, and then they think they're going to be successful. And they're not and that used to work five, seven years ago, but subscriptions have become more and more sophisticated. And customers expect more and exactly what Derek said, you have to kind of change your, your, from the inside out your your organizational structure. You know, it's as simple as like, what they're sending your email, like, you'd be surprised how many brands still have the exact same email flows and order confirmations and everything else that go to subscribers or members, you should actually be calling the members not subscribers, because our customers, then one time customers, they're different, they're more valuable. Statistically, across the board, they're 178% more valuable than a one time customer, the LTV brands, that's like across the board brands that are doing really well. It's like three to 400% more value more lifetime value than one time customer. So once you know that, the only other thing I would add is, it's really important, you won't know this early on if you're just getting started. But really pay attention to your lifetime value and your customer acquisition cost because a lot of the customer acquisition cost for subscriptions comes in the heavily discounted first month. So if you if you have a subscriber is worth four times as much as a one time customer you can you can do something really awesome the first month to get them can because conversion on subscriptions is much lower than one time products because it's it's a bigger commitment. And we see a lot of brands do like even free like the first month free and then it converts to paying on the second month. So like 100% You don't have to go that far. But you can do that's just your customer acquisition cost but you have to know that it works and you're not losing money, but you'll know that soon.

Derek Cwik 14:42

Yeah, we're talking to a food delivery service that is has been in subscriptions business for a long time. There. If I said the name you guys like I know those guys. One thing as they've moved digitally one thing that they've contended with is new customer acquisition. We started looking at their data. And what we realized is a lot of their customer base that appears new, were actually existing customers that were creating a pseudo account. So think of like derek@gmail.com. And then you have Derekplusthreemonthstwo@gmail.com and derekplusthreemonthsthree@gmail.com. So we've had to combat that. impersonation. But you might think of this as Oh, those are, those are bad customers, those aren't bad customers and not trying to really game the system, they just don't see the value yet, in that full price, monthly service. So let's bring up a model that addresses that need, right? Because you know, it's there. There's, there are people trying to game you, but really, they just want to do business with you, and you're not making it easy. So we've reframed the, and rethought what the subscription plan looks like, so that we can identify those folks being engaged them in a positive light, and then see convert them to an actual customer that is honest, honestly, doing business with you. So there's a lot of you know, as you start looking at the data, you're gonna start uncovering a lot of things about your buyers that you would have never guessed. And then, you know, looking inwards, you guys will start saying things about yourself operationally, that you need to do better as well.

Aaron Conant 16:25

Yeah. Do you see it? Mike, I want to hear your thoughts here as well, then do you see adjusting price points and items? Because if you see, I think what you're saying is they value the product, but just not at the price point, which is why they keep coming back for the discounted, you know, initial month at a discount, you adjust your price points for those or you know, it, you know, lower the overall subscription after that or address in a different way.

Derek Cwik 16:55

I mean, a lot of tactics you could use, right? So when we think about how do you keep them retain, it's not always just about the price of the product. Sometimes there's incentive to buy other product at a reduced maybe shipping cost. If you subscribe to this model, now you get free shipping on your ancillary purchases, right? You might have a loyalty program where you your multiplier, or your boost effect goes higher, right, you fall into a category of exclusive exclusivity or VIP. Are those are all the tangential things that are really low cost of business, but help retain that customer stickiness, when they start thinking about what they're getting out of you are getting the product, they're paying you for that but they're getting all these other nice little freebies. One other thing to maybe consider is the unboxing experience, especially when you're a single product organization, make it you know, every every opportunity to brand your product, wherever it is, is an opportunity for that customer to become an advocate, whether they, you know, do a little LinkedIn, selfie or something. If your logo is there, and they can talk about your product, that's an opportunity for them to socially sell you guys. So in that, in that model, include something in the packaging, a thank you note, a discount on your next purchase. Again, something they continue the customer engagement throughout their their lifetime with you.

Mike Sanchez 18:24

Yeah, I think I would add on top of that is is Jennifer, if you're building stuff and you're early on, the most valuable information is to actually go talk to your customers. And in the first things I would do and I'm a big fan of market validation is don't guess right? Don't assume what's going to provide value to them go and look at even before the subscription model started but look at who your repeat buyers were who went and bought, you know, and bought your product multiple times without a subscription model there. And either in create a campaign, a survey, talk to them personally, I'm a big fan of that. I think it really personalizes your brand and makes it like a real human connection there. And I think if you can start understanding that you can start understanding why they want to come back and buy from you. But what is that value? Why are they excited to get your product and go do that talk to 10 people talk to 15 people to talk to 20 people, I guarantee you'll start seeing some trends pop out of that you'll start to kind of figure out okay, here is actually that thing that I need to build my brand around. You know, there's something here that either if it's product specific, Jay talked about it before there's some brands that actually buy more because of maybe the mission and purpose I see that a ton right if there's something bigger that you're going to go do. I went and went and just subscribed to a free trial this morning to go because my dogs are not eating their food they're being really picky to this like whole like, you know, grass fed you know to me organic meals or whatever like that and and I was sitting there reading through the entire content of that page right of why they're doing it the health benefits of it. Granted, my dogs are way more spoiled than they should be you know for doing that but it bought me in right it was more than me just make it a transition It was like I understood the mission and purpose of why this brand was creating this and also some of the benefits. So I would say being that you're early on, this is like the time where you're smaller. So you can be nimble enough to have these conversations to where you don't have so many subscribers, that it's really hard to kind of do that. And that will be invaluable. And when you build those relationships, those end up turning into your biggest advocates, though, they're going to be the ones who are going to go refer your brand drive referrals over to you and create a really strong, you know, organic channel, right, which is, as Jay said, right, helps on the customer acquisition cost side. And it starts creating, you know, customers for life where you.

Aaron Conant 20:39

Yeah, absolutely love it. Are there? If you're kicking this off? How long does it take? I don't want to jump out to a couple of more people. But if you're kicking off a program like this, you know, the question comes in around, like, how long does it take to get this set up? Whenever you can probably pull the trigger on it, but what's realistic around planning it out and executing it correctly?

Jay Myers 21:03

I mean, we see subscriptions launched within a day. But that's like, it can be it can also be months, it really depends on the total program so that the subscription aspect of it is is is quite easy. But nailing the aspects of the model. And like even thinking about Jennifer's question, like a good solve for the, the free signing up emails over and over to get into first month is have you have discounts unlocked after certain months. So after three months, after six months after a year, the doesn't the whole value doesn't have to discount is not to be realized on the first month. So there should be motivations to stay on. But so designing that whole program can can take a while. I think if a brand has a decent, like front end and experience that they want to create. I mean, a couple weeks is reasonable. It's it really varies. Actually, Derek would probably be better to speak on that. Because-

Derek Cwik 22:13

Yeah, I guess what I would say is, it's how long does it take to go direct consumer or at a storefront? Right, we can turn on a Shopify site in a day, you can turn on subscriptions program in a day, there are tools out there that enable us to rapidly deploy things. But in our in this world, nowadays, you've really got one typically major shot to get it right first time. And if you get it wrong, you've got to make it right with that customer. So rather than rushing anything, again, we got to go back to that GSATs. We've got to go through a strategic phase, we recommend it we don't have to. But think about it and put it on paper what the plan is right. And then everybody can collectively measure against that plan as we go along this journey together. And as Mike said, we got to keep talking to our customers will have heat mapping will have customer exit surveys, you'll have a you know, the voice of the customer. And that has to be prevalent through all of this to keep reinforcing. It's never a like Ron Popeil says set and forget type strategy. It's something that you are continually working against. Just like when you launch an eCommerce site, you're not done. It's not like okay, hey, let's all go home. Every day, there's new challenges, and you're always you're always updating a typical deployment is at least three weeks to I'd say four. For one that's strategically planned.

Aaron Conant 23:45

Awesome. Love it Next, want to jump out to the Stuart, Stuart, if you can jump in, that'd be awesome. You know, brief intro on yourself, the organization if he can? You know, that'd be great. We'd love to hear how you're looking at this space. And we can't unmute that's fine. You know, we'll just we can bounce back out to you. Is there? What are the typical, you know, Stuart we'll jump back out, you know, if we can a bit. Is there a typical, like KPIs to look at is a common question that I get quite a bit. When people are trying to figure out, is it worth it at the end of the day? And so I know, you said, Hey, the typical customer is worth 4x. Right at the end of the day. What is what are the KPIs that you're going for is a is a whole are they gauging you know, as a time effort? Is the money worth it?

Derek Cwik 24:38

I know Jay, you've got some good statistics on, you know, plateauing. And yeah, I mean, there's earnings.

Jay Myers 24:47

Well, there's like, I think there's a few that you have to get right? I mean, there's the main ones, like lifetime LTV, lifetime value of your customer customer acquisition, cost churn and not just so voluntary. involuntary churn of involuntary is declines. And so that's that's a Dunning issue with credit cards voluntary is customers turning on themselves choosing to cancel. So it's important to know those numbers but then also know the stage. And then I'm going to get into a Derek was talking about in a second. But I think like most brands, if you ask them what their churn is they would say that's 11.2%. Well break that down. Where is it? Is that in in the onboarding stage? Are you losing them? Are you losing them in the organizational stage, like in the middle? Are you losing them on the end, because they just are not getting any more value out of it. To know and understand where you're losing them is important. And then a metric that I absolutely believe is critical for subscription brands that everyone should measure is your referral traffic. And so subscriptions that are purchased by referred by friend and the reason for this is a subscriptions. It's the number one source of traffic for subscription purchases is referred by friend. And it's just subscriptions are inherently you have a deeper relationship with the brand. When you buy a one time product, you might Google Search something, find the product you want, buy it and forget the brand's name, you don't you just were looking for the product? subscription, you're committing to a brand. And you've probably had, like everyone on this call is probably had something like Mike's probably going to tell someone about that dog food subscription after he gets it. Because he's Oh, did I go mute there for a second? Yep, sir. Yeah, oh, no worries, no worries. But what I was saying was, Mike's gonna have a relationship with that company, he's going to refer a friend. So what happens we see a lot of brands who use our subscription platform, go into what we call the subscription death curve. And it's just, if you're, it looks like that. So you're growing, and then you hit a plateau, and you can't break out of it. And the reason why is if you're onboarding doesn't matter what the number is 100 customers a day, 1000 customers a day. And you're, you're paying to acquire them through Facebook, Instagram, wherever, you'll get to a point. And if you have 10%, churn, where if you're getting 100 a day, and if you have 10,000 customers, you're turning 100 a day, you can't break out of that curve. It happens to eCommerce subscription companies that happens to SaaS any any recurring billing model. And the brands that break out of it are ones that have a healthy viral coefficient. And like it'll be Facebook's number one metric, you know, when clubhouse launched, this is like the number one thing that helps them go viral is to have so and I can tell you, if you have 15%, churn, you need 1.2. So everyone has to refer 1.2 people to break out of that death curve, if we call it. But it depends if your churn is only 10%, then it's less. So. So the first thing is, knowing exactly what your referred by friend is referrals. And then monitoring it and growing it. And I have a lot of ideas on strategies of how to grow it. But that's such an important metric that I think isn't tracked enough.

Derek Cwik 28:22

And I'd say we are as an agency hearing more than ever about like influencer led, reflect or affiliate programs whereby influencers are receiving your product, they're socializing your product, they're onboarding your new customers, and then those customers inevitably become an advocate of brand advocate for you guys. measurement is key, as Jay said, across all of this, and as Mike said, Let's, for every person that you are tracking, let's get a deeper engagement with a small set of them to keep learning as we go.

Jay Myers 29:01

Yeah. I'll say one tactic that we've seen work is, you know, the default is most subscriptions you sign up for, they have a link that says, share this with a friend get 10% off or give a friend 10% off that's kind of like table stakes, and it doesn't work very well. But giving a limited number of very high value referral links. So if Mike subscribes for his dog food, and he gets three links he can share to give someone a free a completely free month, but he only gets free three. He's gonna think strategically about who he shares them with, he's probably going to make sure that it's someone who will actually use it, and there's going to be a much higher chance that that person ends up subscribing versus if he just has a link that says refer a friend and get 10% off like that just kind of sits in his customer dashboard. So giving limited number of high value referrals works really well for that.

Aaron Conant 29:57

Awesome we'll go with Mike?

Mike Sanchez 30:00

Yeah, no, I agree with Jay kind of reminds me of, you know, grant this not subscription service. But you know, if you remember, like, clubhouse or Hey, you know, when they relaunched their email service with our maybe they went and got beta users, right and gave two to three, you know, licenses out. So I think that exclusivity does create a little bit of like, FOMO of wanting to be able to have that product or be a part of that. I think that's really key. The other piece I would call out too, is just, you know, understanding kind of what your payback period as well. So Jay kind of hit on customer acquisition cost and talked about the upfront investment, right on discounting, churn the different areas like that. And I think where I see some brands get into trouble sometimes is not understanding exactly when that point is, you know, and they get into this just this wheel of burning cash, right, and really never seen kind of that point to where they could start building kind of profitability there. And so granted early on, you're going to investing a ton of your money, you're not expected to make a profit from the get go. But I think it's understanding what it would take to get there and understanding kind of your goal to reach that, I think it starts to give you some flexibility of you know, being able to run your business, even bootstrapping it, right not having to go take, you know, say a ton of funding or whatever it may be when you want to hit a point of scale. And that may be the right option. There's there's no wrong option in that point. But I think understanding that metric is really key and understanding all the costs that go into it. And then you'll understand where you can go negotiate better deals, right. So when you start hitting skill, understand, like, man, if I got my cost down on packaging, if I got my cost down through the manufacturer, if I got my costume in certain areas, I know that I'm only going to be able to, you know, get even better profits there. So I think just building out that framework early on will help tremendously when you're when you're trying to set up for scale down the road.

Aaron Conant 31:45

Yeah, love it. Love it. I'm gonna jump out. Yeah, Stuart, if you want to jump in now. Thanks for jumping in brief intro on yourself and the company be great. And then how are you looking at subscription models today? And obviously, any questions for the experts we have on the air? Feel free to ask away?

Stuart 32:03

Sure. Hi, Aaron. Hi, Mike, Jay, Derek. So I run a skincare and I'm working on mine skincare company Beauty RX by Dr. Schultz, we have a combination of both one time purchase products, a combination of products that you can buy either as one time purchase, or with Subscribe and Save. And then we have a couple of products that are subscription only. We, for the first time really started pursuing paid social in 2020. And we did that driving all traffic to one of the subscription only products, we've seen pretty similar metrics. So what you've been discussing today, definitely picked up a few tidbits that are gonna be helpful. So thank you. One question I do have though, is when you have a site where you have where your whole, you know, reason to be is not necessarily just a subscription package, you kind of have the two options. How do you kind of not cannibalize your best customers who are already buying from you once or twice a month, with pretty big average order values. And now all of a sudden, they see great subscription kits, they go into it. Now they're saving money on subscriptions, free shipping and everything else. And don't get me wrong, I understand the value of a subscriber. But when I have a customer who they're placing their 30th order, and now all of a sudden they're doing it on subscriptions that have regular I'm like, okay, I didn't that wasn't necessarily incremental.

Jay Myers 33:21

Well, my thoughts on that are as you have to look at it in mass. And so there will be some customers that we're buying every month anyway, that now are getting a little bit of a discount. But there should hopefully be a lot more that weren't buying it every month that now are and yes, they're getting a bit of a discount, but they're, they're now subscribed. The only other thing I would say is subscription customers spend more with brands when they're offered cross sells and upsell products. And that's something that I think most brands don't take advantage of as much as they should. And so if you have a subscriber base, send a exclusive email only to them with an offer. When products come out, maybe offer it to them first 30 days before general public. So like they will they will spend more if you give them the option to so you might lose a little bit when they move on to the subscription because they're saving the 10% with or whatever the discount is for the Subscribe and Save. But you need mechanisms in place to now maximize the fact that you know they are your top 10 or 20% and there's a lot more they will spend given the opportunity.

Mike Sanchez 34:45

Yeah, one there's one brand I subscribe to that was in that in the same kind of health and beauty, you know, focus on skincare products, and one strategy I saw them use was when you would go into a subscription Part of the subscription that they would part in there is they would give some pretty good amount of samples bright of different products and not like, didn't cheap out on it in any way, right? either be gifts or products on what Jay said, and use that kind of mechanism, that recurring mechanism to go and try to cross sell or upsell, right, you know, different things, you could go and do that. The great thing is, is that when they would send those samples, they would follow up with a really good campaign around it, educating on what they sent you why you should try it, even a bit of a, you know, a carrot out there, right? In order to go and say, Hey, do you want to go add this to your next subscription? Right? So instead of making like a one time buy, it would actually go and look to try to increase your entire a ob right on the actual subscription itself? And they would tie that around there? It worked on me, believe it or not, you know, so while they would put a couple of samples in there, I'm like, Oh, cool. Here's a, you know, an interesting rates, right that they added in, you know, thinking they're, you know, skincare brand. smells pretty good. And then it was so easy for me to just click and add that onto my next order and just go in and do that. So I think that's going to be your strategy, kind of what Jay said, it's like, you know, you take two steps back to move four steps forward, you know, a little bit of a head up front, but then I think it gives you a whole other marketing channel to actually put products in your customers hands, and hopefully they can go and expand more what they're buying. Okay, I'm actually that's kind of a quick follow up. Mike, do you have any I know, we can, of course, do this through email, some of the upsells we can do the upsells through just sampling? Do you? Are there any apps or sites on Shopify? Are there any apps or software that you tend to like also, that helps with the cross sell maybe post purchase or something like that? Yeah, for sure. We can definitely go off of email, I can say, you know, at bowls ourselves, you know, we have an upsell app and also provide some of those functionalities to kind of do that, outside of that, you know, definitely can use that to go you know, there's post purchase funnels that you create. So after a purchase is made, you have an opportunity to upsell. I've seen different ways to where you can if you were to go up sell something you can add, you know, do something even physical, right with a QR code scan this, you know, comes back with a discount, and you can make it an option there. But yeah, a lot of options there. But yes, we can definitely, just between Jay and I, we probably have a ton we can share even Derek on different options, even with the Nasr, even, you know, outside of us that that can help kind of get that for you.

Jay Myers 37:32

Yeah, I'll add one, just add one thing, like there's, um, it can be done as simple as we've seen brands do it with SMS, or email like because your credit card information, everything's tokenized they shouldn't have to enter it. Again, these offers can be sent out three days before the subscription is about to go out, Hey, your your your auto refill is going out, here's an offer one click Confirm ad goes in the order. And like we've seen 30% uptake on emails like that. So there's a lot of different ways that can be done. Also, the customer portal is a great place 92% of subscribers actually visit their customer portal at least once after subscribing. So having offers in there is also really, really good they and actually we have a brand right now that's building out an entire shopping experience within the customer portal. So they have their regular store and then they have the member store and member products and member discounts and so there's a lot of ways you can maximize the value of those subscribers even though you're losing a little bit on that, that front end subscription.

Stuart 38:45

Okay, that's very helpful. I appreciate it.

Jay Myers 38:48

Yeah, good question.

Aaron Conant 38:51

Yeah, awesome. Thanks Stuart for jumping in. Next year we can I'm going to jump out to Katie Katie, do you mind jumping in? If you can a brief intro on yourself in the company? And then how do you look at subscriptions today? I mean, in the space you're in, is it important Are you have you launched it is it you know, obviously if you have any questions for the experts, feel free to ask away.

Katie 39:12

Thank you. And I apologize. I joined late because I had a 2022 to plan meeting already printed over. I am familiar with the subscription space from the work I did at Bare Minerals. And I do not yet have a subscription program here with the Kneipp brand. It is something that is on my radar, probably for 2022 we're in the process of migrating eCommerce platforms. So I'm I've got to kind of put things on hold right now. But the cool thing about Kneipp I don't know if anybody's ever heard of Kneipp. It's um let me see it's a premium bath salt brand. For the most part, we're we're experts in the bath space. So bath salts are our deepest area. We have bath oils bubble bath Things like that. And we're unique in the space in that we have 130 year heritage. We're a company out of Germany and we source our salts in an ancient sea that's 1500 feet below surface. So it's very pure, very unique kind of crystals that hold on to essential oils really well. So the bath experience is unlike nothing you've ever had before. If you want to soak in Arnica for your sore muscles and joints, this is the stuff to do it in. And, you know, right now, what we're finding is we're not that well known in the marketplace, but people who try our brand, fall in love with our brand and keep coming back. So I think it is right for a subscription program people who are hardcore bathers bathe at least once a week use up rate of one of our jars of salt is 10 to 12 pounds depending on how big your tub is and how much product you want in it. But you know, that's an easy once every two to three months purchase just on the salts alone. And then there are all the other additives and things that you know people could buy In addition, um, so I think that it's an interesting place for our brand to go we're just not ready for it right the second um, but I would love to hear a little bit more from your experts about what they think what kind of lifts they think that could bring to the business. I just I want to make sure our people keep coming back. I don't know if any of you have heard of the influencer Lauryn Hill. But she just did another like tour my bathroom video and she loves snipe, and she talks about is completely organically every time she does reviews. And we just got another huge hit from her the other day, which was awesome. So that's the kind of customer we have.

Aaron Conant 41:41

Love it this Katie for jumping in so quick, you know, thoughts on lift as a whole? And then I want to jump out to Christine as well. There's a question and we're gonna jump out to her before we wrap up. But you know, thoughts on lift is a whole, what should we'll be expecting, we won't hold you to it either. Knowing there's a vast-

Jay Myers 42:04

11.2% would be my estimate. The you know, that this works great with especially with gift subscriptions. It's it's, there's two things that come to mind on it looking on your site right now. One is, for sure gift, gift subscriptions and then educating. I feel like there's a lot of education that needs to happen on the quality of the salts, where it's coming from, there probably is some aligned, good things that you do like you probably extract them in a healthy way that's healthy for the ocean and healthy for the soil and how and I'm assuming that other bath salts maybe aren't created in the same way. And so, in that gifting process, if when you buy a gift subscription for someone making sure that that person is educated on the quality of the salts, like the person buying it will know. But if we find with gift subscriptions, the person receiving it doesn't often buy into the brand as much because they don't, they don't, they don't actually visit the website and read all the details, they get the gift. But educating them on and then offering them a free month to renew it when they're six months of the year comes over to keep them on long term. I've also seen programs work well for this. So it's not a subscription, it's it's a it's, it's a 12 month, it's a six month 12 month, 24 month, healthy life or healthy skin or program and you and you and you kind of group them that way. So like it could be I don't know the categories, but like I could be a athlete that I need regenitive salts, I am extremely athletic. And I run and I need certain things for this, or I have skin problems. And I have this and so you sell it as a 6 12 or 24 month and you create programs around it. And what you find is, you know if your average turn is, or if your average retention is five months or seven months, if you if you sell a 12 month program, you're going to be ahead anyway. So even though it's not a subscription that lasts forever, you're still ahead of what you're so you might consider wrapping a programs around them and selling it that way. And then of like definitely just have the month subscription anyway. But I think that would be a while we've seen brands that have done really well with it. And if it's a health thing that there's it's a reason to get kind of sign on. I don't know exactly what kind of lift you'll see. I guarantee it's going to it just it just makes sense for this. Well, sorry. One last thing I'll say is given the variables in bathtub size and stuff like that, add a How much do I need calculator. We have a brand actually if you go to V dog, they sell vegan dog food. It's a simple calculator you put in like your dog weight and how many times they eat or whatever and it tells you exactly how which subscription you need to buy. Because that will be a friction point in signing up for the subscription is how often Do I need it? And how much do I need it. So make that super simple sign up. And there's a lot of simple calculators that look nice and work on your branding that you can add add to the page as well.

Katie 45:12

These are great ideas. Thank you.

Jay Myers 45:15

Welcome.

Katie 45:16

I love the new twist and the gift subscription for us anyway.

Jay Myers 45:21

It's It's big, you'll find that people that subscribe, but they want to buy it as a gift for us. I don't know when you're planning on launching it, but the holidays are by-

Katie 45:31

You're like speaking my language. And it's just such a giftable brand. You know, when I was interviewing with the brand, earlier this year, I started asking people have you ever heard of Kneipp? And everybody said, Oh, my my mother in law gives it to me every year for Christmas? Or you know, people know about the brand that way? Yeah, we need more like that.

Mike Sanchez 45:48

Yeah, I would say just one of the things that add on to I mean, this looking at the brand, I mean, it screams cold following right. And I have looked on it on Instagram really quick. And all the people that follow it that are tied to me are two yoga instructors, everybody who's like in this health and wellness, you know, type thing. So I think like if you're planning for a subscription push, say like next year, I think from now to the media, it's a perfect time to go find those other channels. Right, I think there's plenty of opportunity where you can go and create affiliate type programs right to have people who are in this industry right talking about it, oh gift amounts, some of your products, have them go talk about a blog about it. folks who have really big followings a lot of times I'll do that just with free products, you don't even have to go and pay right and expensive influencer to go do that. Because I think if you can go do that, say like within a yoga community within, you know, all these health and wellness type areas, you can really organically grow, you know, I think this brand really well. And I think once you've they start talking about those communities, then you can take that to that next level, which is how do you go like say sponsor a social event, when there's going to be you know, 20 or 30 people, you know, going to go do something who all have that same like minded who would buy a product like this, like I think if you're able to focus on that and just kind of expand and build some different community channels, then when you actually launch the subscription plan, you have a whole base of buyers, you know, who are going to be ready to kind of jump on that. So I think that that would be just from like the quick look. And I think there's tons of potential there to do something like that.

Derek Cwik 47:21

And I would just chime in maybe long term option is to think about a collaboration, right, you have a great giftable product and giftable products often go along with collaboration and that finding another brand that has similar advocacy. So something is, you know, just popped in my head, like the Calm app, right? come up with some unique piece with them that you know, taking a bath with yourselves have the .com app playing in the background. I don't know what it is. But collabs are also very popular again, just to build the build buzz and just start having some cross channel pollination between buying groups.

Jay Myers 47:57

Yeah, totally even with like, like, like products. So like skincare lines that are complementary or different things who might have subscriptions with, like tons of subscribers, I noticed you have sample sizes for $4. You might want to consider asking them if you can put samples of this in there with an offer. And then you do the same for for them as well, too. That works.

Katie 48:21

Yeah, these are great ideas that we've been talking about.

Derek Cwik 48:25

Well, one thing I'm just from the digital agency side that I'd mentioned is Katie, I think you described your story to us. And it was very riveting. You had me engaged. And in fact, I thought of you employees here that were like, and I know re is probably not in your head Matt, Matt would be like all over this. But I don't get that sense when I go to your site. I don't know, I don't feel that right. I don't feel that emotion and enthusiasm. So no product looks great. But I think that storytelling is is is you have a simple about us. So that's something to really call out.

Katie 48:57

Yeah, we're actually rewriting all of that content right now. That's been handed down to us in German from the team in Germany. So all of it is basically Google translated before my time into English, and we don't love it. So we're working on that. So great call out.

Derek Cwik 49:17

I'm sure you guys have your operational end really tight you know, now.

Katie 49:23

I wish I could say that. It's painful. It's a great brand. And if anybody loves foot creams, that was my gateway drug. The foot butter is the bomb.

Aaron Conant 49:35

There you go. Thanks. I mean, the last a Katie's you might just want to put this on your your q3 2021. If If giftable subscriptions.

Katie 49:46

Yeah, actually that you're reading my mind Aaron.

Aaron Conant 49:49

Yeah, it's exactly what I was thinking like, we might want to hit this by q3.

Katie 49:52

Here's the thing with us though, you know, we're on a deprecated version of Magento. So I need something that's light lift. So can't, I can't integrate anything into check out or there's, it's too fragile. So we're migrating to Salesforce commerce cloud. And the launch date is supposed to be September 14, but nobody told me which year. I think we're looking at some time first half of next year.

Aaron Conant 50:20

All right, I can connect you with these guys. Afterwards, I'm sure 100% of the conversation. And I do want to, we have to kick it around for kind of key takeaways here. As we get to the end of the hour, thanks to everybody who dialed in everybody who was able to jump in, send over questions, they've been fantastic. You know, the team at Bold, American Eagle, great friends, partners of the network as a whole 100% worth your time as a follow up conversation. They're great friendly people, you know, put a half hour on the calendar and kind of pick their brains, digital experts across the board in this subscription space, for sure. You know, if we kind of go I'll go Derek, Mike, Jay for kind of key takeaways. And we kind of wrap up, you know, with the 57 minute marker. So there are key takeaways here.

Derek Cwik 50:58

Yeah, so we've got a lot of great tools in our toolbox, Bold in its suite of products, not just just Checkout, but in subscriptions, are great tools for us to leverage. Now the key thing that I want to just advocate for if you guys aren't doing it yet something to consider is go through a customer journey mapping exercise, if you're not familiar with what that is very simply, it's a visual tool, visual aid to help understand where your buyers are interacting with you, whether it be digital channels, offline channels, wherever, what that flow looks like and it gauges, their sentiment across those journeys. And that helps you guys understand where that friction is, where there's pain, meaning there's abandonment, or there's a reason not to buy or engage with you guys. You get to understand their side. But then you also get to look at your side of the business of Where are you guys doing things poorly, it might be on customer service and returns, it might be on your your marketing campaigns, right, you're you're reaching the wrong groups, there's a lot of things that this simple exercise visually helps business understand, which then feeds into or informs that g sad that we talked about real estate at the top of the hour. So we'd love to help you out with that if you're not doing it or help you out in any way.

Aaron Conant 52:18

Awesome, Mike key takeaways and then to Jay.

Mike Sanchez 52:20

Sure, yeah, I would say when you're thinking about a subscription strategy, or even just generally a digital, you know, eCommerce strategy, just always think about, you know, what's your content strategy? First, right, I think don't think of it as a transaction. Or, you know, just here's how to get another subscriber, think of it as how are you building that community? How are you going to build a relationship with them? How are you going to really show your brand to where you can really create that organic following, those are the brands right now that are winning, right, because there's always going to be new products that are going to enter and become competitors. And you want to fight to not become just a commodity, right, just another person who's selling a similar product, but you want to be able to create that that true organic excitement and following around your brand. So as you're thinking through these strategies, think that first talk to your customers, get feedback for them, find out why they're excited about their brand, and show that off in multiple different channels. And then from a bold side, you know, we're here to help out in any possible way, you know, the great thing about us is we can provide, you know, all this technology, all these experiences through check out subscriptions really anywhere, regardless of what platform you're on. And even with the help of American Eagle, for us to kind of work on these things collaboratively. So I would say just if you if you want just free guidance and free consultation, just want to talk to this brain store, give us a ring, we're happy to do that. Happy to help out as much as we can.

Jay Myers 53:45

Yeah, and I'll I'll say, you know, if I could sum it up for me, Mike, you have a subscription, your subscription is not about your product. And I the one question I often ask brands is if you take your product out of the out of the subscription, will your customer stay subscribed? And if the answer is yes, you have a healthy subscription, because there's so much more value there. And I say at least a minimum three times perceived value than the product. So like if the product is $20, that customer needs to perceive $60 of value, and that's through its contents like Mike's talking about and it's through exclusive access. Maybe they have VIP pricing as a member, maybe they get exclusive events community. But if you take that product out, and that's all your subscriptions about, you're, you're done. If that's your last for a little bit, but you're not, you're not going to grow, you need to be more than the product you need to wrap around a membership experience. And so whether you're already in subscriptions, or you're thinking about launching it, think about what the membership experiences all the value that they're going to get. And actually I tell people to map it out in three columns. And it's curation, replenishment and access Write down under each column. What are the things that they're getting that fall in each of those and you need to have a piece of each of them to have a successful subscription.

Aaron Conant 55:10

Awesome, love it. Well, thanks everybody who was able to dial in today all the great conversation. Jay, Mike, Derek, thanks for your time and your expertise today and let us put you on the hot seat. Hope everybody has a fantastic Tuesday. I look for a follow up email from us. We'd love to have a conversation with you and encourage anybody have a follow up conversation with this team at Bold, American Eagle great friends and partners the network. hope everybody has a fantastic Tuesday Everybody stay safe. Look forward to having you on a future event already. Thanks, everybody.

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