Growing Your eCommerce Business Through SMS Texting With Osa Gaius

Welcome to the Make Each Click Count Podcast. This is your host Andy Splichal. We are happy to welcome this week's guest to discuss today's topic which is growing your Ecommerce business through SMS texting. Today's guest is the founder and CEO of Parrot, a leading ecommerce texting expert and mobile experience wizard who helps ecommerce businesses increase revenue and customer service retention with texting. A big welcome to Osa Gaius. Hello, Osa.

Hey, Andy, thank you. Thank you for having me today. It's great to be here.

You know, we're excited to have you and excited to talk texting. So let's start with how can a company use texting to increase their business?

Great question. So you know, if you're an Ecommerce business, there are three things we call out that you should be thinking about. The first is how do you announce new new sales, right, you know, you're probably doing a sale once a quarter, maybe maybe less frequently, more frequently. And you're most likely send an email out or you're posting something on social let people know, hey, we've got we've got a discount, or we've got some new arrivals. So that's one way you can definitely use texting just you know, think about your existing communication. That happens once a quarter around sales announced those over over SMS as well that's that's the first place we say we should start. That's kind of level one when you're texting. Level two is announcing new products. So think of the experience that MiShop provides or think of your new hot release, right? We think that you should feature it, send people multiple images of it over text, that way they can feel engaged when a new product comes as opposed to just posting on social or, you know, and the last way we see people using texting to increase their business is by embedding SMS into their existing checkout experiences. So think of Shop Pay, essentially, we think that's something that's really innovative seeing brands leverage, texting as a way to remember who their customer is, and help them through the checkout process more smoothly.

How receptive are customers ticketing text?

Great question. So the the industry stat that we found that we really like is that 90% of consumers have expressed the desire to get text messages or businesses. But as you can imagine, these are these are businesses that these consumers like. So for instance, I like Nike. So I would prefer to receive texts from Nike, I don't really want to receive text messages from brands that I don't care about. And so that's what we're seeing is that consumers really like to get text for businesses, they care about shop at regularly, especially when it comes to things like getting additional support, again, a VIP experience. But on the other side, consumers do not want to hear from businesses that they do not enjoy shopping.

Can you hurt your business with texting? Is there some some really bad mistakes you could make?

Yeah, the first huge mistake we've seen brands make is not owning their phone. Right. So we've seen brands change phone numbers multiple times a year because they have compliance issues. So that's one thing that can definitely hurt your brand. Because when when a consumer sees that you're not texting from the same number, they start to get confused. And then they start to associate your brand with a little less of that of that, you know, VIP experience at Apple experiences they as they should, right, so that's the first thing brands do is they don't really think about what number they are reading at the consumer to consumer with and making sure that feels like a relationship with a contact in your phone. The second mistake we see brands making is using repetitive discount codes. So we've seen some brands, for instance, do a discount code every single week, just to get people to back to their website from text messages. And we think that's bad for your business from a brand value perspective. But also bad for the bottom line is you're having to do massive discount codes 30 to 40%, just to get people to click on your text messages. I think the third thing I'll call out that brands need to be looking out for over the future is you know, making sure that whoever is on your end actually managing these things is thinking about SMS is two way because if you consumers start to believe that it's a one way kind of ad, then they'll start blocking your your text messages because they will realize it's not personalized. It's not about them. It's just about your business pushing things to their phone.

So you made a great point there that businesses need to think of it as a two way communication. Are there any other best practices that that help a company become more successful with a with a texting strategy?

Yeah, I think I think the first thing we tell brands to do from a best practice standpoint in terms of when you're shaping your SMS strategy is to think of texting not as a replacement for email or as a corollary to email. But think of it primarily as a a relationship tool, right a way for you to build a deeper relationship. Well, you know, of course, to maximize LTV, maximize your own brands, you know, revenue. But start start by thinking about what what would you want a brand to be texting you on your phone. And one way you can do this, if you're a marketer especially, is just to go to your favorite brands, go on their website, sign up for their next messages, it doesn't matter if you shop there regularly. And just see that experience for a week. And that will very quickly tell you how you should be crafting the experiences. Because if you like what you're seeing from other brands, that you know what to copy, but if you don't like it, for instance, I sign up for some grants early on when I start paired, and some people would text me at 2am in the morning with a discount. And so I very quickly learned that is not something that I want. And so that's what I recommend for people to think about is when you're creating your strategy, put yourself in a position of your customer on their phone busy driving their kids to school. Do you do you want to get that text from your from your business at that time? Or is there a different text you want to send?

Now, are there some industries that have more success than others when it comes to texting?

Great question. So in our data, what we've seen is that industries where the cost of the item is, is you know, pretty, pretty negligible, right? So think not Peloton not a car, not an expensive couch, but things like fashion, and apparel, food and beverage, especially consumable, right things that people will use up after a month after a certain period of time, those things work really well over text, because texting can act as a reminder to go shop and buy more. Or it can also act as a way for you to just learn about what's actually happening. Whereas if you think of something like a couch, you're not shopping for a couch every every week, or every month or year, it's probably a couple of years. So you don't really need real time updates via texts, or even just bi weekly updates via text.

So who should the text be from? I mean, you had mentioned Nike. Does it say that it's coming from Phil Knight? Or is it coming from customer service? I mean, who? Who should be the the person signing the text?

Yeah, yeah. So I liked the way you phrased it. Because I think a lot of people skip this part when they're trying to think about texting for the first time because they're thinking, it's coming from my marketing department. So it should feel like a marketing message. And even if that's the case, what we tell people is, you should assume that your customer support rep is the one sending a text. So it should sound like someone is on the other end, even if you know you've got a team of people behind it. Or even if it's just you handling all the responses, you should assume first of all that you should begin response when people when you text them, either it's a thumbs up or an excitement. And that's why we recommend you think about the text coming from the customer service rep. Even if it's a sale announcement of hey, we got a new sale today, it should sound like you know, the person on the other end, it sound like you're talking to them. As a person who wants to serve them rather than the person you call out rather than the CEO of the company just kind of yelling at you and saying go buy more stuff.

Do you recommend giving that person a name, you know, say, Hey, this is this is Sally from Nike, we got some great

What we do, in fact, there's one customer I'll call out of ours who he's the owner of the brand. And so he runs the marketing for the brand. And what he does is he'll say, Hey, this is Henry, and he'll say his first name, hey, is Henry in the text, although the text is going out. So a few 1000 people, right, it's still important to add that in because the person on the other end might be someone who's actually shopped with you a bunch. And so this can be an opportunity for you to make them feel like they're part of your family, part of your brand as rather than just kind of a person who is seeing an ad on Instagram, right.

Now, do you have a favorite success story of one of your clients that you could share? How they use text to increase their business?

Yeah, yeah. So a great example, give us a t shirt brand that makes T shirts we're a faith based group. So they make T shirts for people in the Christian community. Very interesting, because they came to us because a lot of their traffic, something like 90% of the traffic was from mobile. But what they realized was that people who were going to their website on mobile, were not completing their checkout, they had a huge abandoned cart rate. And so what we were going to do for them was actually implement our solution into their checkout process. That way, if someone was about to buy we would actually send him a text message saying, Hey, we noticed about the checkout. Let's help you through checkout. And they would actually use a custom checkout we built for them with, you know, address, autocomplete, and all the all the fancy bells and whistles. And what they were able to see was a double digit increase in mobile conversions in a week just by not not doing any SMS marketing or sales, but just by embedding an SMS into the checkout process. That way folks knew they could save their card on file, and more importantly, checkout. In a more conversational way.

Interesting. And so that took them off of the website onto your platform?

Yeah, well, what's interesting about our solution is we we don't really have our own, you know, separate platform, we, when someone's ready to check out if we embed ourselves into a merchant's website, will actually just send them to their SMS app so that now they are talking to a bot we built for your business. And all that bot knows how to do is collect a credit card and wrap up the checkout. But in this case, they're talking to your brand's phone number. They're, they're buying your product, but now they're in a conversation on context, as opposed to just on your website with your own website form.

Got it. Got it. Now, I would imagine that there are some different rules to texting. What are what are some of those privacy rules? And do you see even more coming in in the next 12-18 months?

No, I, that's a great question. I think what we're seeing if you zoom out is that a lot of brands are thinking about ways to leverage SMS, right? So there's, there's sort of a new flood of businesses trying to text consumers. But what we're having people think about and encourage you to think about is, well, one, unlike email, you can't you can't buy a list, right? We see brands, buying email lists, and then trying to buy phone number lists, we shouldn't do you should not not do that. The primary reason is the fines that associated with texting, the consumer who has not opted in to your text messages is about $500 per infraction, so per person you text, you will have to pay 500 bucks, and that that can that can cripple your business, right? It can really bad. So the first thing we say is, remember that the phone number is sacred, it is protected by the Telephone Consumer Protection Act, the TCPA. And those regulations are very strict. So don't buy phone numbers, don't try to force people to opt in, take opt in very seriously. The second thing we think about Ron privacy is you can't share phone numbers, right. So if someone's bought from another brand, you know, you can't have a collaboration with them, where you also get the phone number of the person that has the opposite and only to your business. And you need, you need to make sure you do that correctly. And I think last thing I would say is, you know, you, you want to make sure that as we continue to see more people text consumers what we're seeing on on both Apple and Android, as well, as we look out at the carriers like AT&T and Verizon, they're increasingly thinking about how to protect the consumer from getting too many texts. And one thing that we're doing there is it's filtering traffic. So the more texts you send, that are, you know, really spray and pray their sort of massive discount codes, the more likely you are as a business to be filtered and throttled by the carriers like AT&T and Verizon. So that's, that's not as aggressive yet. It's already starting. But we imagine the next 1218 months, as more businesses start texting people, the carriers will be even more strict as to what you're allowed to text people and they will start cracking down on things that are a bit more spammy.

Interesting. So I was just gonna say that's kind of like the spam folder of email.

Yeah, and if you if you've got the iOS, the new iOS update, especially outside of US, we're already seeing iOS filter out text messages that, you know, they tell you and I, they might sound like a good marketing SMS message, but to the carriers, they automatically get categorized as spam. And on your phone now on iPhone, in particular, you'll start to see those automatically get filtered out of the conversation that you're having with your family and your friends into a separate folder.

So let's talk a little bit about Parrot. What problems are you solving for your clients? And how are you standing out from your competition? I assume there's others doing this.

Yeah, yeah. I mean, I think the way we talk about Parrot to be frank is we are not an SMS marketing tool. We we can recommend those we tell people they should think about those. But if you want to send discount codes out to your, your, your customers once a quarter, we're not really the tool for that, that that's not what we we are focused on rather paired helps brands improve their mobile checkout experience, right. So as I called earlier, a lot of brands come to us and say, hey, my abandoned cart rate is really high. People who are shopping on my website on their phone, are just bailing out the industry stat, as you as you know, is 30%. Only 30% of people who start checking out a mobile website will actually finish and there are things you can do there. You can improve your checkout, you could rebuild your checkout as a shop pay is done. For everyone on Shopify, you can rebuild all of checkout to be mobile first. But what we do is we come in we replace your checkout with something that's mobile first that uses the consumers phone number as the primary identifier. That way when they want to check out again, they just put in a number, they get a code they, they're done. They can reply to your text messages now to actually transact because it's their phone number texting your brand. And so we think of it as shop pay for people who don't use the Shopify platform. And it's really around improving your mobile checkout experience. That way your abandoned carts and your repeat purchases are locked down and are working really well for you.

Yeah, no, that's really neat. And I was looking at your website where you offer, like, you can just reply, yes, if you want this product, how does that work?

Yeah, so the, as I mentioned, when we install Parrot, on your website, we collect the consumers phone number instead of their email as the first thing they give you on checkout. So today, you've got a website, you put an email, you put your car, your address, instead, what parent you put your phone number, your address, your card, and now your phone number is attached to your credit card. What that means for your business is you now have a phone number for that consumer, which is private to you in them. And then you will also have a credit card for them, which again, with parent is secured for you. And so now you can text that consumer and say, Hey, I know you bought this shirt last month, I just made this new one. Do you want it? And if the consumer wants the reply, yes. And parent will say hey, do you want to use your safety card and send it to save address? Yes, if not, we'll give them a way to quickly change that. And they're off to the races. For you as a business. That means your website is now a channel the channel you've had before. But also texting is now a channel for you because you can sell over text as well.

So how does your system work? I mean, are you I guess is a business owner, I'm may a store? How do I decide which of my past clients that I email or I'm sorry, email just had to have, did I text to offer them something like that?

Yeah, so a good example, I'll call out as a company we're working with now called back club, one thing they already do is they've got people who bought a bat, let's call it, they bought a bat and generate. And then as you can imagine, their kids are using the bat. So by February, March, the kids gonna need to need griptape, I don't need some new cleats, we're gonna need some new, you know, some new batting gloves. And so what they do is they'll build a segment imperative of Hey, who are all the folks who bought bought a bat, and they'll set up an automation with Parrot that says, After 30 days send the person another item, right, another recommendation either as an upsell or as a complementary product. And so that's how we're seeing brands set this up as though you know, they'll have a list in their system. And then they'll set up an automation with Parrot. And then we will do the work of saying that text message, collecting the payment for it, and then sending the order back into your system, whether it's Bigcommerce, or Magento, or any of the other Enterprise Ecommerce platforms.

What kind of conversion rates are you seeing on something like that?

Great question. So the best example I can give is a brand that released, they make reusable, they make consumable men's health products. And what they saw was it phased out a text message out with, with the ability to collect payments, kind of embedded within a text message, as opposed to you know, redirecting the person to a website or something like that. And they saw a 40x return on investment. So they made $1,300, and just four hours, really 90 minutes, just from that that one text message. And so what we're seeing there is a very large increase in in how much money you can make by investing in using this kind of texting. But what I'll call out is when we do go and bed into your old traditional website, and just replace your old checkout with our checkout, we're seeing a 15% lift in conversions. So 15% More people actually go through putting their card putting their address and complete their purchase versus if they were just using your old broken checkout process.

And how is your, how does your fee structure work?

Yeah, Parrot Parrot charges, you know, simple. We think it's very simple. Because brands we talk to get comp get complicated pricing structures, and a lot of a lot of folks in this space. So what we tell brands is we charge you 1% of each transaction, which doesn't include the actual credit card fee you pay. So you pay 2.9% to the credit card companies, we charge an additional 1% On top of that, and then we charge you one cent for every text you sent. So we don't make any money when you know if you tax people more or less we don't make any money. We only make money when you actually collect a payment using our system. So that aligns us with your business. Make sure that you know if you sell more we make more money. But we're not incentivized to make you tax people more in fact, we prefer if you tax people less because we don't make any money on that after tax part.

Now on the 1%? That is. So if you installed your system on the mobile, though, that's 1% on every sale that comes through mobile.

Exactly, exactly.

But you're seeing like a 15% lift on average.

Yeah, yeah. So you know, for most brands, we talked to that, you know, a 15% increase in conversions, on mobile, especially mobile is already your largest source of traffic, can be, can be more than more than enough to justify giving us that 1%. And there are things we can do there to, to help the business kind of really figure out if it makes sense for them by looking at their data more closely. But that's, that's, that's what we're seeing so far.

Now, do you offer any sort of A/B testing or anything like that, where you can compare your checkout versus yours when you're coming on board?

Yeah, yeah. And so the example I called out before the t shirt brand, what we did was, we actually ran our checkout, and their existing checkout alongside each other for about two weeks. And what we're able to see there by saying, hey, you know, person A, will go through your old checkout. Person B, who comes in after that person A will go through our checkout, what that allowed us to really figure out over that TV was, well, one, why is our checkout performing better? And and how much? How much more performant is it? And that's we found at that 50% lift in conversions held across across their site.

And what platform so you guys did a great event?

Good question. And so today, we, we, we integrate really, with every platform, and the reason is that technically, when I when I context as to who I am, before parents, before starting period, I ran payments at MailChimp, the the the behemoth now, right, but when I started MailChimp, it was a smaller company, it's one of the things I did there was build a payments team out. And what we realized was that, it's very difficult if you go to a brand and you try to help them solve checkout, if you cannot directly integrate into their order system and make sure the orders show up. And so apparent, by default, doesn't actually store the orders, we keep them on record. And then when the person tells us the brand and your case, hey, I want these orders to go to Magento, or BigCommerce will simply send those orders over. And so right now we can integrate really with any platform within two weeks. But we're highly focused on BigCommerce, because we've seen that the BigCommerce spaces is quite interesting, because merchants are very desperate to solve that checkout problem. But if you use a different platform, we can work with you within a few weeks to get things implemented. They'll just be a bit more consultation with our team make sure we do it correctly for you.

How does tracking work on mobile?

Um, good question. Do you mean order tracking?

Yeah. Well, I mean, the channel tracking you're tracking if those customers came from Google or Facebook or paid ads, organic? I mean, how are you able to track all that through analytics?

Yeah. So we we don't do really much tracking today to be frank with regards to where the customer came from. Because for us, it's not. It's something that when we talk to brands, they've already implemented some tracking whether it's Google Analytics,

I know, I'm just talking. So if they are going into your system, is the customer still able to figure out where those clients have been coming from?

Yeah, today, we have a little bit of UTM tracking implemented for some of these things. But that is a place where we're investing energy into increasing the amount of analytics we have. So you can tell this person checked out using Parrot but they came from.

Right, exactly. Exactly.

Yeah, good question. Yeah. Great question.

So who is the perfect client for your service?

Yeah, great question. So the perfect client for us is an Ecommerce brand, making over $500,000 a year. And the reason that's perfect for us is because at that scale, you're already thinking about one to 3% differences in terms of conversions. Right, you've done that math already, you know, your AOV you know, your LTV, you know, ideally, what a phone number attached to a credit card could do for you for repeat purchases, but you also know it in the first instance, how many people do I need to actually get from the homepage, the website to the order confirmation page on a website, and it's our job as Parrot to help you get get them there as fast as possible. The person we're looking for at that organization is usually the VP of marketing or the head of finance, essentially, anybody who cares about making sure conversion rates are constantly improving.

And if someone is looking to start using SMS, why do you think they should choose Parrot?

Good question. So what we tell people is, it's important to think of SMS not as a marketing channel that I spoke of earlier, but as part of your mobile experience. And so if you're looking to use SMS really as a way to drive, you know, sort of people to your website to do sales. Again, we're not the right solution for you, right. But if you are looking to improve your checkout experience, that's where you should think about Parrot, because Parrot not only allows you to collect the payment with the phone number the first time, but then we use that phone number as a way to very easily get your consumer to one click Checkout, whether they're on their couch eating potatoes, potato chips, that they can reply yes to buy the new thing you're releasing, or if they're on your website, again, looking at stuff, they put their phone number in, the checkouts done, because Parrot, you know, knows who they are already. Those are the those are the brands that that should be thinking about us. And what we'll say is, you know, if you're, again, if you're looking for something like SMS marketing, there are better tools for that. And then if you're looking for something that's, you know, a simple checkout solution that only uses email addresses, for instance, there are other tools for that. But if you're looking for something truly powerful, they can help you treat the phone and the phone number as a as a way to remember your customer and give them some some additional experiences that they couldn't get otherwise, then you should really think about using Parrot.

And how can an interested that listener learn more about working with you?

Yeah, the best way to get in touch with us would, would be to go to getparrot.com. And to try a demo. So you put in your phone number, you actually try buying something with a fake credit card. So you can see what the pair experience is like, at the end of that you'll be able to, you know, schedule some time with my team, or you can simply reach out to us at help.getparrot.com.

And what is one piece of actionable advice that you could leave the listeners with today, if they were interested in starting to test some texting?

Yeah, the first thing I'd say is, one, put yourself in the position of your favorite customer. So who's your VIP, and, you know, pull out a piece of paper and write a text message from you, as a company, right or whoever you know, you want to and your company, whether it's customer support person or your head of your your head of marketing, write a text message on just on paper from yourself to that VIP customer that you think they'd be excited right to read. And I think that's the first thing I'd say to people is that that can help you start to craft your SMS strategy from a more personal sense, rather than trying to start from you know, trying to improve, improve, click throughs. The second thing I'd say is, you know, go on your phone and try shopping on your own website. Especially if you haven't done that a long time. Try shopping on your own website. With just your phone, don't use your computer and try checking out something without using like a safe credit card so you can feel the the true mobile checkout experience that you have and then decide for yourself. Do you want to include texting as part of that? Or after that? Or do you just want to leave it the way it is? I think that will help you think about texting more, more holistically.

Yeah, no, that is some great advice. Is there anything else you would like to add before we wrap it up today?

I think the last thing I'll say is, you know, one, thank you for having me on the podcast. But I think if you're if you're an Ecommerce, this is a very exciting time to be in Ecommerce and, you know, trying trying to optimize and trying to, you know, to borrow your phrase and make every click count is extremely important today because ecommerce is not going to stop and it's a very exciting time to continue to invest in this space.

Well, this has been great. Thank you very much for joining us today, Osa.

Thank you.

For listeners. Remember, if you liked this episode, please go to Apple podcasts and leave us an honest review. And if you're looking for more information regarding parent or connecting with Osa, you will find the links below in the show notes. In addition if you're looking for more information on growing your business, check out our all new podcast Resource Center available at www.makeeachclickcount.com. We have compiled all the different past guests by show topic and and included each of their contact information in case you would like any information on any of the services I have discussed during the previous episodes. Well that's it for today. Remember to stay safe, keep healthy and happy marketing and I will talk to you in the next episode.