PANEL DISCUSSION / Commerce Accel 2022 REPLAY
This panel was originally recorded live during Commerce Accel 2022, and is syndicated on The Unofficial Shopify Podcast with permission from conference organizer Kunle Campbell.
We find ourselves in a challenging retail and economic environment this year, the stakes have never been higher, and consumer psychology and behavior is adjusting rapidly to new market realities.
Throughout the next 40 minutes, this group of messaging and customer lifetime value maximization experts will give you the step-by-step on what you need to do as a brand to adjust your marketing to changing consumer psychology, and give you the best practices that top brands are using already in response to changing market conditions.
Panelists:
Reinis Krumins, co-founder of agencyJR, an eCom email marketing agency working with your favorite 7 & 8 figure brands. His team has generated over $30,000,000 in email sales in the past 3 years.
Tracey Wallace, Director of Content Strategy at Klaviyo, where her team helps to educate SMB and MM ecommerce brands on how to grow more efficiently with email and SMS, yes, but also how to build their own audiences, increase lifetime value and build a legacy brand that outlasts any economic headwinds. Previously, she was the Editor-in-Chief at BigCommerce, and even started her own DTC brand to test out the theories and advice her writers were giving. Tracey comes from a long line of educators, and is focused on helping business leaders have more successful impact at their organisations.
Lindy Crea, VP of Partnerships at Recharge, the leading subscription management solution, helping ecommerce merchants of all sizes launch and scale subscription offerings. Lindy leads the team responsible for Recharge’s all-star partner network.
The Unofficial Shopify Podcast
10-25-2022
Kurt Elster: Hello again, my friends. Welcome back to The Unofficial Shopify Podcast. I’m your host, Kurt Elster.
Ezra Firestone Sound Board Clip: Tech Nasty!
Kurt Elster: And on today’s show, we’re doing something a little different but no less exciting and valuable for you. See, a few weeks back I got to moderate a panel that was broadcast live for Commerce Accel, and we had some really smart marketing folks in there giving us their data-backed opinions. Oh my gosh, they brought research on what works and what Black Friday, Cyber Monday, Cyber Week, whatever you want to call the opportunity ahead is going to look like this year, and by the end of it I knew I have to share this with you fine folks. And so, we got the audio. The conference organizer was kind enough to agree to let us republish it here, and so we chopped it down a little bit, make it a little punchier for you, save you some time, and I hope you enjoy it. A ton of value, ton of fun. Here we go. Take it away, me.
Kunle Campbell: Thank you for joining us in our Commerce Accel conference, the most awaited direct-to-consumer event of the year. It’s an absolute pleasure to have you around and see people tuning in from all around the world. So, whether you’re new to Black Friday Cyber Monday or looking for new strategies to make this Q4 your strongest yet, this panel will show you how to maximize customer lifetime value this Q4 through messaging and email. You’ll hear from best in class experts who have generated millions of dollars of revenue for eCommerce brands and head up key departments in some of the biggest names in the industry.
I’m Kunle Campbell, the Co-Founder of Octillion Capital and host of the 2X eCommerce Podcast. So, here’s the session overview. How to tackle email marketing in an inflationary environment, how does customer psychology change, how should that guide your strategy, how often should you be messaging your customers, should you be using SMS? Get answers to all of these questions and more from our expert panel.
We find ourselves in a challenging retail and economic environment this year. The stakes have never been higher and consumer psychology and behavior is adjusting rapidly to new market realities. Over the next 45 minutes, this group of messaging and customer lifetime value maximization experts will give you the step-by-step actions on what you need to do as a brand to adjust your marketing to changing consumer psychology and give you best practices that top brands are using already in response to the changing market conditions. I now hand it over to our more than competent moderator for this session, Kurt Elster, who’s the founder of Ethercycle and the host of The Unofficial Shopify Podcast. Over to you, Kurt.
Kurt Elster: Oh my gosh. Kunle, thank you. I’ve done conferences with you before and I’m always… As far as virtual web conferences go, these are like top notch, the absolute best. But all right, building on what you were discussing, we’ve got a panel. I am happy to moderate it today. And there’s a theme that I want to cover, and that’s audiences and lists. We have spent all year building them, but now what? How do we effectively message them to get those sales in November, right? You put all this effort into building the list, so what do we do with it? How do we make the most of it? How do we get that return on investment on our community building efforts and those list building efforts?
And so, I’m joined by quite a few delightful panelists. Let’s go in order. Reinis, tell me how you say your name please?
Reinis Krumins: Look, my name is more intimidating than it actually is. Reinis, exactly how you said it.
Kurt Elster: Reinis. Okay. And Reinis, you are co-founder of agencyJR. You’re an email agency owner.
Reinis Krumins: Yes.
Kurt Elster: And you work with a lot of seven and eight-figure brands, right?
Reinis Krumins: That’s correct. That’s correct. And right now, at the start of this month we started our preparations for Black Friday Cyber Monday. Super exciting times. A lot of great strategies we’re gonna be executing, so happy to share those here.
Kurt Elster: Excellent. And you’ve done that for three years, right?
Reinis Krumins: Yeah. Been in the email marketing game for three years now focusing on eCommerce specifically. We’re doing a lot in the U.S., Europe, so a lot of insights from all over the world.
Kurt Elster: Wonderful. And we also are joined by Tracey Wallace, who is Director of Content Strategy at Klaviyo.
Tracey Wallace: Hello. Hi, everybody. I am stoked to be here. I have been in the eCommerce tech world for a very long time. I was over at BigCommerce prior to this, so reporting often on Black Friday Cyber Monday, both before in terms of what data shows, and then of course following up afterwards. I did also own my own direct-to-consumer brand for about five years there. Had to shut it down recently because having two full-time jobs is too many jobs to have. But I am stoked to be here and chat with you all today.
Kurt Elster: And I’m thrilled to have you because we’ve spoken on these topics before, and you are just a wealth of information, experience, and data points.
Tracey Wallace: I have so many data points. I’m so ready.
Kurt Elster: Very helpful. And then our third and final panelist, Lindy Crea. You are Partnerships at Recharge?
Lindy Crea: That’s right.
Kurt Elster: VP of Partnerships at Recharge.
Lindy Crea: Right. Nice to be here. Yeah. Head of partnerships at Recharge. Yeah. Recharge is a leading subscription management service. We help merchants with recurring revenue and really driving that LTV.
Kurt Elster: And how long you been doing that?
Lindy Crea: I’ve been working with Recharge for over two years now and prior to that I was leading partnerships over at Klarna.
Kurt Elster: Oh, okay. Also, another good tool in the toolbox.
Lindy Crea: Absolutely.
Kurt Elster: Those installment payments and having that experience. Okay, so I’m excited to pick your brains. I’ve got quite a few questions prepared here. But before we go deep, I want to start at the top with something high level. I want to know, let’s just define something here. We heard customer lifetime value. This panel’s about let’s maximize customer lifetime value. That’s a KPI we like. It can be hard to measure depending on your toolset. I need an overview of CLTV. I need someone to define it for me. All right, when I want to pull CLTV I get it in my Klaviyo dashboard. Tracey, can you define customer lifetime value for me?
Tracey Wallace: Oh, I will try, because my answer was also gonna be just go to your Klaviyo dashboard and it will be in there. I even looked up an article real quick. I was like, “How do we exactly define this?” Customer lifetime value, though, is how much, so once you ultimately acquire a customer, how much value can that customer generate for your business and organization over time? So, whether that’s more sales, folks try loyalty programs, the point of customer lifetime value is that you are probably spending a good amount of money up front to try to acquire customers. It then behooves you as an organization to make sure that you are getting as much value back from those customers over time so that you can A, either spend more up front to get those customers in and have a good understanding of how well you are able to get repeat purchases and engage those customers that you bring in or lower the spend up front so that you can grow your margins, make more revenue, a variety of different things. Customer lifetime value, though, ultimately affects how much you spend on marketing as you acquire customers, and then of course how you divert resources and marketing both for acquisition and then for retention.
Kurt Elster: Yeah. It feels like with marketing in general, and especially eCom marketing, is our marketing efforts and dollars are disproportionately focused on the top of the funnel. It is so expensive, and time consuming, and stressful to acquire new customers, and so when we look at customer lifetime value, that’s like hey, can we really make the most of all that effort put up front at the top of the funnel by focusing on providing an experience so compelling that customers come back and make multiple purchases? And then we combine that with my favorite KPI, average order value, get that to go up, and suddenly we have significantly more profitable eCom stores without changing our other inputs, without having to acquire even more new customers.
So, okay, I like that. Good explanation there. Now, this is in the context of Q4, so really we’re talking about Black Friday and selling for the holidays. But CLTV is something we would focus on all year, so what’s different about optimizing for customer lifetime value during Q4 than the reset of the year? And for that, Reinis?
Reinis Krumins: Yeah, I’d say customer lifetime value, it’s something you have to look at not just from email marketing or SMS perspective. It’s something that goes deep into your customer experience. I’d say throughout the year it’s not just you looking at emails and just you looking at marketing, but it’s looking at how your customer support works, how your brand’s packaging is developed and all of that stuff. For Q4, I would say right now a lot of it is giving customers idea. We’ve seen the best types of campaigns, best performance of campaigns is from those where we give customers ideas.
A great example for this is we were having a conversation with a brand that sells skiing equipment, so skiing jackets and pants, and they added shorts to their shop to kind of like even out the seasonality. Their whole idea was to sell out the entire stock of the shorts and not to really sell it during Q4, but I told them, “Look, during Q4 we can increase AOV by if someone is going to be buying your skiing equipment, they’re highly likely to go to a skiing resort. What do skiing resorts have? They have spas. They have swimming pools.” So, then all of a sudden we can give the customer the idea of, “Hey, you need these shorts for the swimming pool.”
So, ultimately it comes down to giving customers ideas and showing how your product improves the customers’ lives. Right now, that’s more important than ever, especially this Q4, because customers in Europe, energy prices, gas prices, they’re skyrocketing, right? So, people are very… They’re gonna get more and more stingy with their money. We really need to show how important our products are in their day-to-day lives, so I think it’s just becoming even more creative and then even… There have been some shops we have conversations with that only have one product, one SKU, and they say, “Hey, if someone buys from me once, they’re not gonna buy from me again.”
Again, it’s all about the ideas. If someone’s gonna buy one product from you, it’s still… There’s still opportunities for them to buy another product to give as a gift for their grandparents, for their parents, for their friends, so a lot of it is yes, in my eyes, giving the best ideas to the customers. So, then you’re not even selling to them. They already realize, “Oh yes. I need this now.”
Kurt Elster: That’s such a great takeaway. Now I’m derailed. I lost my train of thought. Tracey, it’s your turn. You go.
Tracey Wallace: Well, I just wanted to add to that a little bit about why customer lifetime value is super important in Q4, and for me, the way I’ve always thought about it is one, of course Q4 is an opportunity for a lot of eCommerce brands to grow revenue, a variety of different things. But you want to make sure as much as possible that those folks that you are getting in for Black Friday Cyber Monday can also help catapult your success for the next year. And it’s customer lifetime value, or it’s not that alone, but getting those folks to buy again, really building great experiences for them from the very beginning, making sure that you’re delivering gifts on time. That’s an important one to make sure folks like you. Following up with really great email streams. Making sure you’re introducing your brands.
This isn’t just an event, as I’m sure everyone knows, to sell a bunch of products or to sell a bunch of products at discount. It’s to sell a bunch of products, for sure, but also to try to really get those new customers in, give them that great experience, so that for 2023 you’re already set up for success with an even larger customer base that you’re growing that customer lifetime value for.
Kurt Elster: Between the two of you, there’s a recurring theme here. The thread is okay, yeah, you’re gonna sell more stuff, but that is not the immediate forward-facing look here. It is more about the fact that in Q4 customers are wallet out, ready to buy, and if you can provide the compelling reasons and excuse for them to make that purchase, aha, then they’ll make the purchase decision on their own. It’s not for you to just be like, “Here’s some stuff. Buy it, buy it.” It’s more about kind of understanding them and having some consumer empathy there.
Reinis Krumins: To maybe quickly add to what Tracey said… Sorry, I don’t want to make you lose your train of thought, but right now ads are rising as everyone knows, and during Q4 we see that it’s even more expensive to acquire a customer than it is throughout the year, so you might be losing even more money on the front end and you’re able to reclaim those profits solely from your backend.
Kurt Elster: Oh, yeah. For sure. Yeah. Especially trying to… You’re not gonna be doing new customer acquisition with Facebook ads during Black Friday. Or if you do, you’re really gonna pay a premium for it. The holy grail-
Lindy Crea: I just want to add exactly to what these two are saying. It’s a lot about customer experience. This is a great opportunity to give customers a great experience. And to Reinis’s point, the customers have been through a tough year where things have been late, they don’t know if the product’s gonna be available, can I get this gift out to my friend? So, that stability is part of that great customer experience. The speed, the convenience for delivering those products. So, subscriptions is a great way to get those customers in and make sure that they’re gonna get their product on time. You know exactly what you need to forecast for your inventory to have available for those subscribers, so if I’m entertaining, I know I’m gonna get my wine, or if I want to stay healthy through the holiday season, I know that my supplements are gonna be delivered on time, so part of that customer experience is really just providing customers with the confidence and stability that they’re gonna get their products.
Kurt Elster: You know, what I love about subscriptions is it adds predictable recurring revenue to a business, so you don’t… To try and buffer out that feast/famine cycle. Consumable goods, if you have a consumable good, 100% you should be offering subscriptions. That’s just like they really lend… Those products absolutely lend themselves to the convenience of subscriptions. But with it, can I gift subscriptions to people? Should I be encouraging subscriptions as gifts?
Lindy Crea: Yes. Absolutely. I mean, I think to Tracey’s point, this time of the year with gifting is a great way to expand your audience and introduce new folks to your brands through gifting, and then once they’ve experienced your brand, then it’s a great way to target them and get them to opt-in to subscriptions after they’ve, to Reinis’s point, had that experience with your brand. And you know, depending on what that product is, what was it? Habit hacking? I love that. Habit hacking to understand when should I be targeting this person again to rebuy? If it’s coffee, if it’s a 30-day supply of supplements, really being thoughtful about when we’re reaching out to them again to have them come and try the product again or try another product from the brand.
Kurt Elster: I agree with you. That is absolutely the thing I find makes or breaks it. It’s like getting that frequency right and then being in the right place at the right time for when that reorder is gonna happen. And that’s where predictive date of next order, like Klaviyo could do, is incredibly helpful. But if I’m gifting it, I don’t necessarily get a choice here with Q4. Is there any kind of special consideration there before we move on? Now I’m getting technical.
Lindy Crea: Special consideration for how you deal with a gifter?
Kurt Elster: Well, all right, so the idea is can I gift subscriptions? Yes. But it’s only as good as showing up at the right time. You know, and I guess I’m overthinking it. I’m totally over… We’ll move on.
Lindy Crea: I mean, you probably could, and I love to gift subscriptions. It’s one of my favorite things and I try to do it for only like three months or something at a time, but it’s nice for Christmas, and then things come later, which is nice. I often end up giving them my login so that they can manage it all on their own.
Kurt Elster: Oh, man.
Lindy Crea: Which probably isn’t the right way to do it, but just in case they want to reschedule stuff, or I don’t know, if they move, whatever else it is. I certainly don’t want to be the person responsible for going and updating the subscription gifts that I have given and making sure they show up on time. But yeah, I personally love giving subscriptions as gifts.
Tracey Wallace: And a great gift this time of year are the curated boxes. You know, I think I gave my husband the GQ Box, and that’s a quarterly box where he gets all the man products, and so it really introduces him to fashion, and it’s a great way for brands to get their brand out there to new people, and then drive them back to adopt that brand long term.
Kurt Elster: Inflation is top of mind and supposedly inflation causes people, consumers… I hate the word consumers. It makes us sound like locusts. It causes people to be more concerned with and receptive to discounting and discounts. And you even see this with like if you compare prices at Walmart and Target, they’re the same. It’s the same prices for groceries. But people during a recession will shop more at Walmart and vice versa during boom times shop more at Target.
So, we’re told consumers are more discount receptive this year. I’m gonna assume this is true unless someone has data on this. What are those discount strategies that we should be looking at?
Reinis Krumins: I wouldn’t look at it as something just as discounts. I think it’s a very one dimensional way to look at things. At the end of the day, consumers buy products they want or buy products they need, so I think a more global way to look at it is what is your offer. Your offer just doesn’t include the price. It includes the product, the whole experience around it, so I’d say right now just people are looking for the best bang for their buck, so it can be improving the offer. What we’re doing, for example, with some of the brands we’re working with is we’re creating different specific bundles. And again, making it easy for consumers to buy.
If let’s say it’s a product, we have one brand we work with who sells kitchen knives. We’re gonna be creating a specific gifting bundle, which again has a whole idea to gift, to give the product away. I do agree, people are going to be more receptive to discounts this year. I don’t have the data to back it up. It’s just logical. But I would say discounts is one thing, but what’s more important for brand owners is to focus on offers. And again, make it easy to have an irresistible offer, whether it's by improving your refund guarantees, or handling customers’ objections, those are also, I’d say those are ways that might not… where you don’t need to give let’s say $20 off right off the bat, but you improve the customer’s experience, which in return can increase conversion.
Tracey Wallace: Yeah. 100%. I’m gonna jump on that. Bundles and free gifts with purchase can be super-
Kurt Elster: One of my favorites.
Tracey Wallace: Yeah. It could be super helpful right now. Again, because folks, yes, folks are looking for discounts, but they’re looking for deals, right? They’re trying to get more out of a purchase, so how can you bundle and or set up a checkout flow, or an offer as Reinis mentioned that gives that perceived sense of value? I will say I don’t have data on discounts, but I do have some data to add here that I think will be helpful just around inflation in general. So, Klaviyo on the 11th of October, which is not too far from now, will be releasing a report, but all of you get the data now, or a little bit of it. But we surveyed about 3,500 folks in the U.S. and Canada around inflation. No surprise, 99% of people are experiencing it, are feeling it in their wallets, and 90% of consumers say that it will impact how they shop for Black Friday Cyber Monday.
That said, when it comes to gifting, I’m looking at the data right now, 83% of consumers spent at least $250 on gifts last year. 30% up to $1,000. And 54% of consumers this year are saying that they’re gonna spend the same amount of money. 11% say that they’re going to increase, so that’s 35% of consumers who are going to spend less this year because of inflation, but that’s still a good chunk of people who aren’t really changing the way that they’re shopping just yet, at least as it comes to Black Friday Cyber Monday. So, again, they might be looking more for yes, maybe discounts, but also more of that perceived value, but not necessarily changing a ton of their shopping habits.
Kurt Elster: Interesting. Largely unchanged. Do we expect to be able to use last year as a benchmark for this year?
Tracey Wallace: Maybe.
Kurt Elster: Yeah, it’s a guess.
Tracey Wallace: Yeah, so-
Kurt Elster: What does your crystal ball say?
Tracey Wallace: Yeah. My crystal ball right now says yes, right? Inflation is high. What people said in the survey, that they are primarily spending a lot of their money right now on utilities, transportation, things like gas, and groceries, and then they’re spending less on things, primarily hobbies and out of home and in home entertainment. That’s including decreasing streaming services, not going to concerts, that kind of things, or those kind of things. Folks are also looking to decrease spend on apparel and accessories, jewelry and watches, home décor, but that differs across all of the different demographics and whether that’s generation, if you have kids, if you don’t.
In general, folks it sounds like are looking to spend roughly the same, and then even more than that, of those 11% who are planning to spend more money this year, most of those people are saying they’re gonna spend $500 to $1,000 more this year than they did last, so there still are big spenders out there that you can target and look for.
Reinis Krumins: Yeah, something quickly-
Kurt Elster: … who in this survey, like months before the event, is like, “You know what? My Christmas budget just went up $1,000.”
Tracey Wallace: It’s higher.
Kurt Elster: What?
Tracey Wallace: I know. Here’s the crazy thing. I was losing my mind when I was analyzing this data, like messaging all the people at Klaviyo. I was like, “I don’t know who gen Z thinks they are, but they are either rich or dumb.” I can’t figure it out because they’re going to spend the most out of any of the generations and I’m like-
Reinis Krumins: Buy now, pay later. Buy now, pay later.
Tracey Wallace: Yeah, maybe.
Reinis Krumins: That’s actually what it is, and I think that’s gonna be something we’re gonna focus a lot in the emails, as well, talking about you don’t have to pay everything up front. A lot of gen Z customers, I did look at some credit reports. Yeah, they’re the ones who spend a lot on buy now, pay later, so they don’t-
Tracey Wallace: That’s a great point. That is. They’re not dumb. They’re using new tools and technology. I get it. That’s me.
Lindy Crea: I appreciate the Klarna reference, for sure. That is a big focus, to not discount your brand, right? It’s a great way, buy now, pay later, to not discount your brand but give consumers the ability to break things up. I think also subscriptions, you can offer a discount for having those customers commit to your brand, and they’re basically saying, “I’m gonna have a higher LTV so you can spend more on me. You can give me a discount for committing to your brand.”
So, those are great ways. I also think that the gen Z’ers are not dumb. They don’t have children. They have disposable income.
Tracey Wallace: Oh, that’s helpful. I just assumed that they all got rich off of the Bitcoin, and all of that stuff, and I was like, “I think they all just made a lot of money and they’re gonna spend it.” I don’t know.
Lindy Crea: They’re rich.
Kurt Elster: I think it’s the TikTok hacks. They’re like, “All right, here’s the trick. Buy now, pay later. Don’t pay later. Just do the first part. Done. Nailed it.” For the promos we like, we heard about free gift with purchase, which is one of my favorites because you’re not discounting the core product or brand. You’re adding, “Hey, this free thing.” And ideally, the free gift with purchase a limited edition exclusive, like one of our clients during Black Friday does a different lapel pin for every day of the week that is… The only way to get it is like you gotta make a purchase on that day.
And so, they’re really adding urgency by doing that, and they’re not necessarily… They’re adding a bonus but they’re not discounting anything else. So, I love free gift with purchase as a promo strategy. Bundles, oh my gosh, we were talking about CLTV. Bundles, such a great way to give people control, especially ones like a build your own gift set, build your own bundle box. We’ve been playing with that this year. And it increases average order value. Well, that increases CLTV, right? And it gives people control and makes it feel like yeah, I put this together as a gift for you.
The implication there is that straight discounting across the store, there’s a negative connotation there. Discounting has been called a sugar high, so do we have promotions, offers that work, that aren’t discount based that we can use? I like FGWP. What else do we got?
Tracey Wallace: So, things that aren’t discount based, some of the other things I’ve heard Klaviyo customers doing that work really well are like advent calendar things, so kind of creating this online experience where you build that expectation that each day there’s gonna be this new special item. That typically does have a discount included for that item, but it’s like one item for that day.
Kurt Elster: That’s habit building.
Tracey Wallace: It’s habit building. That can be great for customer lifetime value over time, as well. Oh, and then the other one that I’ve seen folks do really well is, speaking of creating that anticipation and those habits… Well, maybe not habits, but the anticipation, is creating landing pages showcasing a product that you’re going to sell soon.
Reinis Krumins: Yes.
Tracey Wallace: Right? Yeah. And getting that anticipation up and then building that email list or an SMS stream and then doing a drop for those products. That can also work really well too.
Kurt Elster: I think hype is the misunderstood piece to a lot of promotions for eCommerce merchants. What you’re describing is like hey, you gotta hype this up. When you do that it makes all the difference in the world. Reinis, sorry, I interrupted you.
Reinis Krumins: Yeah, no worries. I wanted to say one of the biggest life hacks for brands to maybe not even discount, but it is releasing your products. Because what it allows you to do, it allows you to number one, people have new gift ideas and we’ve seen… I had a conversation with another agency owner, they’ve had great success scaling brands from 500K a year to $25 million a year, and every single Q4 they drop new products, and they drop multiple products to keep up the sales even after Black Friday. You have this gap between Black Friday and Christmas, dropping new product, again, it puts attention to your brand. Launching your products before Black Friday, last year we had a company, skincare company, MANILLA. We did 136K euros with one email send just because a week before Black Friday we launched a new product. Great strategy. Always recommend it.
Lindy Crea: I would say another one similar to that is scarcity. So, giving access to limited supply of a product, and a great way to manage that is if you have members, or subscribers, or a loyal segment, giving them gated access to that so that that makes them special, it brings them into the fold and gives them access to that scarce resource.
Kurt Elster: Just yesterday a huge client who does subscriptions and the whole bit, they were saying, “Hey, how can we do a gated promotion for just our VIP customers, and we’ll call it early bird Black Friday?” When you run a campaign like that, you get to run your Black Friday campaign twice. First at the start of November for those VIPs as this customer appreciation thing, and then again the real deal later in the month. It’s a little more technical in implementing it, but such a worthwhile strategy if you’ve got that big audience and list. Excellent suggestion.
Now, fresh in recent memory is the wounds of two years ago when I had clients going, “Hey, we have truckloads of boxes waiting to go out and FedEx told us we’ll take eight boxes total.” And I had multiple clients with these stories, just trailers of stuff sitting. It was Shipageddon. That’s fresh in our memories and customers want to know. When am I gonna get my stuff? That’s the number one customer support request you get is like, “Hey, where’s my order? Where did my stuff go?” So, we know they’re going to ask. Holiday gifting, those shipments, now suddenly this is a mission critical box that has to get moved. How do we communicate these mission critical shipments? Do we give thoughts there?
Tracey Wallace: Yeah. Sure. Or Reinis, you do this regularly. I can certainly answer from the collective of people I’ve talked to, but go for it.
Reinis Krumins: Yes. Yeah. I mean, tactically I’d say it’s being up front and honest and adding some sort of a comedic aspect to it. If you have someone, a copywriter, somebody on the team, something that just comes off the fly. I don’t know, Santa’s sleigh crashed and now shipments are late. Just being comedic about it so you kind of like disarm the people, and then being up front, and you can talk about those issues. Because yeah, they have happened, and if you try to hide them and if you try to delay it for as late as possible, that’s not a good thing. I’ve sometimes had myself gifts that people want to give me, but they come late, and if they know and they can tell me, “Hey, look. I wanted to get that to you for Christmas but it’s only gonna arrive January 1st.” I’m like, “Okay, cool. Thank you.”
An alternative also is to possibly ask the customers, “Hey, we’re unable to ship your product. We can send you or email a gift card.” So, then with the email they get the digital gift card they can immediately utilize. That might be a bit more difficult from a logistical shipment perspective, but if it’s a huge, huge problem where most customers can’t get their order, they can choose between getting it late, swapping their current order value against a gift card they can give their friends, and again, create an email that’s pretty looking they can either print out or forward someone that can look like a digital gift.
Kurt Elster: Yeah. The other side of that Shipageddon issue is supply chain issue where I can’t even get the stuff in and that could potentially happen again. You brought up gift cards. A clever strategy just if you’re trying to maximize revenue through in Q4 and you have a sold out product. Swap that add to cart button with a, “Hey, buy a gift card instead.” Give them that alternative to make the purchase or at least backorder the item with an estimated ship date.
All right, Tracey, you had additional thoughts on messaging that.
Tracey Wallace: I did. Also, you had mentioned kind of as you set this question up that a lot of folks have this in their recent memory, right? Both retailers from the trauma of it and also consumers. So, even-
Kurt Elster: It wasn’t fun.
Tracey Wallace: No. No, no, no. It wasn’t. So, even if your products are going out great, whatever, you’re still gonna need to let people know when products are arriving, so make sure you do have those flows set up, whether it be in the back end if it was like Klaviyo, with SMS, making sure folks know when things have shipped, when they’re going to arrive, and then also make sure that folks know when the shipping deadline is. So, I just looked it up. It’s December 15th this year for retail ground for USPS. It looks like all the shipping providers have published those dates now in order for things to get there by Christmas.
Be sure to let people know that and then after that point in time, folks can still do Priority Mail, all of that jazz, but that’s probably the time to shift some of your marketing strategies and push more toward gift cards and items that folks don’t have to have shipped to them so they can get it there in time for the holidays. Because there’s always last minute shoppers.
Kurt Elster: And you mentioned-
Lindy Crea: Yeah. And I would just add that with subscriptions, Recharge offers the ability to skip and swap, so for your subscribers if you do come out, if you don’t have the inventory, giving those subscribers the opportunity to swap their product, they can do that through their integration with Klaviyo through quick actions.
Kurt Elster: All right. You had mentioned the like, “Hey, communicate the shipping deadlines.” Communicating the shipping deadlines gives you a very natural and real reason that creates authentic urgency. And so, if you communicate that, just say, “Hey, heads up, wanted to let you know if you want to get free shipping and get this in time for Christmas, you got 48 hours to go.” And you can even put like a countdown timer in the email. I find that is a nice touch.
It's just like for every one of the shipping deadlines I would do that. And we were talking about ways to do promotions without devaluing the brand. Well, offering hey, you could get free upgraded shipping as people are hitting those deadlines, and you attach it to a minimum spend threshold. Obviously, you don’t want to like, “Hey, every order gets free overnight shipping.” We don’t want that. But hey, spend 150 bucks, get free overnight. Okay, that’s a compelling offer, especially as we’ve got those people we forgot to buy gifts for and we’re getting real close to Christmas time.
All right, one topic, this is interesting, we’ve been talking for 30, 40 minutes now. I have not heard anyone… We’ve not discussed SMS yet. And so, SMS, really, it seems like it’s not going away. I know people were skeptical about it years ago, but it’s here to stay. What’s the state of SMS marketing today? Tracey, that’s you.
Tracey Wallace: Sure. Yeah, it is. It is. I’m like wait, sure, should I jump in? Okay, cool. So, Klaviyo also did another study. This one will be coming out in November. I’m just giving all of y’all all the data I’m not supposed to talk about before, but I think it’s okay.
Kurt Elster: We won’t tell anybody.
Tracey Wallace: So, last year we surveyed 2,000 folks last year, again this year. Last year, out of all the folks we surveyed, only 31% said that they had bought anything in 2021 from SMS. This year, 73% of people said that they had purchased via SMS and 53% of those people said that they had done it more than once. So, people are using it, and a good bit, and at a rising clip. Some of the things in that survey folks told us that they like most about SMS is those shipping and delivery updates, anything around VIP, anything that’s really urgent, right?
So, SMS in general, at least right now from a consumer preference point of view, folks really are liking the messages that come with a little bit more urgency, of course, because their phone is right there. They’re looking at it pretty often versus they are looking at email as a channel where they can kind of get to it whenever and they like those longer messages, maybe even more educational messages over in that channel instead.
Lindy Crea: I’ve got some stats for you, Tracey, since you love them. Recharge did a State of Subscriptions Commerce Report from this year where we surveyed 12,000 merchants, and what we found in that is that the merchants that are using SMS, they’re increasing LTV by 30%. And that’s because they’re empowering customers to manage their subscription offering through SMS and meeting customers where they are, but also keeping canceled subscribers coming back. So, 30% increase on LTV, big impact on revenue and ability to spend more on CAC.
Reinis Krumins: Yeah. I have some quick tactics for people that want to use SMS. I’ll tell you this. SMS and email marketing, you use both. There’s no question about it. Yeah. You have to use both, especially for Q4, because there are gonna be people who check emails and there are gonna be people who check SMS, and you have to align a strategy on both these platforms, so you hit everyone you can.
The tactic I like the most is we talked a little bit about having people sign up to an early bird’s list for Black Friday. Have your email subscribers sign up to the SMS early bird’s list. Now you have their phone numbers and their emails, and then you can even do paid advertisements, have maybe new email subscribers. You can split test this against SMS. So, it’s a great way to grow the list for both email and SMS.
Kurt Elster: That’s a really good tip. Hey, all right, lightning round question here, Reinis. How many emails am I sending during November-December? What’s the right amount of emails to send? Give me a range.
Reinis Krumins: Okay. So, we’re gonna send 45 emails in November on average per brand. Extremely aggressive. And that’s because throughout Black Friday, Black Week, we send two emails a day. So, we send one email in the morning and then one email to people who didn’t open. People are gonna get so many offers everywhere, so we are gonna be extremely… We’re not as aggressive throughout the rest of the year, so during November we just make sure we get most of these customers that we can.
Now, there’s preparation we do before that, so in October we’re doing list warmup, we’re doing health checks to make sure there’s no deliverability issues, so you really have to get that intact before you can send as many emails as we do. But I’d say whatever you’re doing, if you’re doing like 12 emails a month, if you can get it up to 30, great. And it’s partly because also at the start of the month, as I previously mentioned, we are pushing people to sign up to the early bird’s list. We are having people commit to the Black Friday sale because it’s a micro commitment but then they remember about us, they get extra notifications, and we can send them text messages, so they allocate budget to our brand instead of a competitor.
During December, we’re gonna send around 17 campaigns, so throughout the first half of the month we’re basically gonna be sending an email either every day or every two days with Christmas gift ideas. And again, we’re giving people ideas on how you can give this product, who you can give this product to, and maybe like a quick introduction, because something… I like to fall back, back on what I did in school in my arts class. Whenever I would draw something, I would be a terrible drawer, but I would always get A’s and A-pluses because I had story behind it. And if we can lay out a story about the product for the customers, maybe how the product was founded, then it again increases the customer experience both for the gift giver and the gift receiver.
Kurt Elster: You know, what I heard was one, send more emails than you think you should, and you said like we’re doing 45, then we’re doing 20. You’re doing over 60 emails as part of the whole November-December campaign, and that sounds like a lot, but everybody else is doing it too, so it’s just like that’s what you gotta do to stay top of mind to cut through the noise. And it depends I think a little bit on vertical, but for sure fashion brands are like… They’re the ones sending the most by far, and 40 to 60 for a fashion brand during this time really is not unusual. Even if it sounds like a lot.
All of these are direct campaigns, one-off campaigns we’re sending, and there’s some segmentation in there, and maybe we send-
Reinis Krumins: 100%.
Kurt Elster: … stuff to people who didn’t open. But do you change, just like those flows, your automations, like browse abandonment, cart abandonment, that have been running all year long. Do you adjust those at all?
Reinis Krumins: Yes, we do. So, for example, instead of the popup just giving regular offer we give out throughout the year, we typically direct it to the Q4 signup. So, if someone’s going on the site, we direct them to the Q4 signup, so we grow that list even farther. With some of the flows like browse abandonment, site abandonment, depending on the brand we might turn it off because if someone is shopping and then we’re sending them 45 email campaigns, and campaigns during December, they might be looking at different products, so they’re just genuinely abandoning stuff, so we would turn some flows off and primarily focus on campaigns. Because campaigns are gonna be more relevant than flows right now, and that was actually a really good question.
Kurt Elster: Do you ever go through… One thing we do is like right before Black Friday, we just go grab at the minimum, we take that browse abandonment flow and that cart abandonment flow, and just crank those down. If that was a weeklong flow, you’re getting that whole thing in like 36 hours.
Reinis Krumins: Yeah. Again, depends on the brand. If it’s a brand with a lot of SKUs, we would turn browse abandonment off, because they might just be looking at different products. Something we encourage before Black Friday is we make people, “Hey, go in the cart and add the products you want to get in your cart.” So, as we roll out the offers, or for example, if it would be a discount, you already have what you want to buy. You already have a wish list pre-saved.
Tracey Wallace: I think also the other point he made was the storytelling. Telling that story that’s relevant to this point in time and what’s happening in people’s lives at the holidays and making it really relevant.
Kurt Elster: And again, it’s about… It’s going back to empathy. Stories are how we relate to each other and how we interpret our lives. If you think about the success of someone like Disney, it’s because they own our stories, right? All their acquisitions, they’re just buying up our stories. Well, why can’t you do that? Why can’t you be your own Walt Disney if you’re a brand and just tell simple stories? Because it works. You know you love stories. And writing’s not that scary. If you went to school, you’re doing it for, what, 10 years? You know how to do this. I promise.
Tracey Wallace: Plus the holidays are a perfect time to tell stories. People are already wrapped up in nostalgia, and thinking about family, there’s so much storytelling that happens naturally around the holidays, so folks are really in the moment for that.
Reinis Krumins: Yeah. To give a quick tactical tip, whenever you tell stories, a big mistake brands do, they make their brand the hero of the story. If you imagine, a great example for example is Rolex. If you imagine someone that would wear a Rolex, Rolex doesn’t make their stories as something like, “Hey, we’re the hero of the brand.” Instead, they position themselves as a tool people who scuba dive, people who for example rock climb, whatever it might be, a tool they use. That’s how you can position your brand, as well.
Kurt Elster: Please don’t take your Rolex rock climbing. Yeah. Oh my gosh. But no, you’re right. All right, we gotta wrap it up. I’ve gone over on time. But I do… I want to hear one quick tip, one key takeaway. For sure, we’ve heard tell stories, right? Send more emails. Let’s go, Tracey, what’s one thing you wish everybody would do?
Tracey Wallace: Oh, goodness. I mean, definitely send more emails. There’s a lot of competition in the inbox during the holidays and folks are not going to see every email that you send naturally, so definitely send more. I love Reinis’s idea of send it again to people who didn’t open. That’s a great one.
Be careful with your discounts. You certainly do want to offer discounts where it makes sense, but one thing that we are seeing a lot of the brands on Klaviyo talk to us about is how they’ve made mistakes in the past where they will do a week before Black Friday like, “The biggest sale of the year, 50% off,” though it’s probably not that high. And then for Black Friday it will be an even higher percent and their customers get really upset, because folks had bought before. So, just again, tell stories, work on your strategy, but remember that your customers are paying attention. Customer lifetime value is something you want to build. A lot of that is about loyalty and building loyalty is about trust, so make sure you are telling trustworthy stories to folks throughout.
Lindy Crea: I was gonna say the same thing. Build trust. Use this time to build trust, which builds affinity with your customers, and Reinis, what you said about the subscription landing page, really demystifying what’s happening with the subscription, and using Klaviyo to really allow customers to manage their order, to see when the shipment’s happening, or when there’s stock outs, that all builds trust. Knowledge leads to trust and trust leads to affinity.
Reinis Krumins: Yeah. I would wrap up with install Recharge so you can have subscriptions. If someone takes them, free money for you. If you don’t have them, again, free money for you.
Kurt Elster: All right, we gotta end it there. Reinis, Tracey, Lindy, this has been a lively and fantastic panel. The best I have moderated. And I’m not kidding. This really… I gotta rewatch this recording. It’s so great. Thank you all. I appreciate it. And let’s get a round of applause. You guys were so great.
Sound Board:
Kurt Elster: Fantastic. Good work, folks.
Lindy Crea: Thanks, everyone.
Tracey Wallace: Thanks, everyone. Bye, y’all.
Reinis Krumins: Thank you. Take care.