Proven Strategies for Improving Customer Retention For e - Commerce with Brandon Amoroso

Andy Splichal 0:00

Welcome to the Make Each Click Count podcast. This is your host, Andy Splichal. We're happy to welcome this week's guest to discuss today's topic, which is proven strategies for improving customer retention for Ecommerce. This week's guest is founder and CEO of Electriq, a drinks company that scales brands with profitable ecommerce models built from innovative proprietary methods, powered by the freedom and individuality of the Gen Z mindset Electriq has fueled over 35 in house specialists in a range of growth focused strategies, including email, SMS marketing, SEO, content marketing, paid acquisition and web design and development. A big welcome to Brandon Amoroso. Hi, Brandon.

Brandon Amoroso 0:44

Hi, thank you for having me.

Andy Splichal 0:45

You're welcome. Now, I like how you have embraced the Gen Z mindset with powered by freedom and invalid individuality. But I'm curious, how does this translate into an advantage for the businesses you serve?

Brandon Amoroso 1:02

So I think, fundamentally, we take a different approach to just having employees and team members in general, because we give them a really a level of autonomy that that doesn't work for everybody. This, the roles at our company are really for people who are self starters and want to take ownership over projects, be able to bring new ideas to the table, and truly own their not only client relationships, but also the growth of the business both with new ideas and seeing through implementation. So we're not sitting over your shoulder here, making sure that you're getting everything done that you're clocking in from nine to five, or any of that stuff. And so naturally, our team members stay for longer with the company, which leads to just more efficiencies, I mean, companies, I forget what the stat is, but it's like billions of dollars are spent each year on onboarding and onboarding new team members. And then beyond that, we really have a strong buy in from the team because they not not only do they feel like this, but it's really is true that they are helping build and grow the company. So that just translates to better client management and success all around.

Andy Splichal 2:16

And so when a client comes in and works with you guys, are they assigned just one dedicated person or is it a team? I mean, do you have specialists doing all these different things? Or is it one person for each each account kind of thing.

Brandon Amoroso 2:31

So they get a dedicated CSM, which is a client success manager. And then depending on the services that they're doing with us, they'll get a specialist from each one of those areas. So let's say they're doing email and SMS marketing with us, they would have a dedicated CSM, they'd also have their own email and SMS specialist. And then we have internal shared services like copywriters, and creative designers that would be assigned for their account as well. But that's the CSM is there to serve as their main point of contact, and to help route things through the organization.

Andy Splichal 3:04

Got it. And your agency helps ecom brands improve retention and increased customer lifetime value? So let's, let's start with talking about improving retention. How do you go about doing this?

Brandon Amoroso 3:18

So that really depends on a lot of different factors, including, like what type of industry or category is the E commerce brand in whether they're more like subscription focused or transactional, like one shot focused, but overall, it comes down to creating a better customer experience. And it's very like high level and sort of a fluffy statement. But that is really the crux of it. You improve retention by having a better customer experience. When you have basic product quality thresholds that need to be met. Like if they don't like your product, especially if it's a consumable product, doesn't matter what we do from a retention standpoint, they're not going to come back. But when it comes to improving retention, the biggest way that we can effectuate change is in email and SMS programs rolling out advanced automatic flows after that first purchase, that are tailored and personalized to who that customer is based off of the first and zero party data that we have on them to make sure that they're coming back for that second purchase. And then retention looks different for a customer who shops from you on a one time basis, versus a customer who shops from you on a subscription basis. So if you're a subscription customer, we're communicating with you entirely differently than if you're a one shot customer. And there's very like tactical things that we do, especially with the Shopify Ecommerce brands that we work with. That is super in the weeds like moving your transactional emails and texts out of Shopify into your CDP slash CRM platform like a clay vo so that you can personalize the transactional journey because On average customer will check their order 4.6 times, like, where is it? And so there's a bunch of high value touch points there that a lot of brands aren't leveraging. And when you when you start to include brand education and content, get people to make that second purchase sooner, that just has a trickle down effect on the rest of the retention curve. There's a bunch of other like very specific tactical examples as well. But that's just one.

Andy Splichal 5:24

Yeah, no, that's great. Why are you moving the emails you said to to personalize it, that's why you're moving on from Shopify to to Klaviyo?

Brandon Amoroso 5:36

Yeah. So I mean, email marketing, we always have coming out of Klaviyo but transactional emails historically have come out of Shopify, you have like your standard order confirmed order delivered. But we can't see any metrics on it. Like what was the open rate, what was the click rate, we're not able to test the email either. So whether it's subject line or the actual copy itself, or imagery to be able to increase the click through rate. And then we're also not able to drive them to an order tracking page that has information on it beyond just where the order is. Because if you've seen a standard Shopify order tracking page before, it really just shows you where the orders at, but it's a huge missed opportunity, because our brands see 15 to 20% of their website traffic going to those order tracking pages. So they'll send it to a custom order tracking page, not only can you tailor the content to be specific to who that customer is. So easiest example is a one shot customer versus a subscription customer. If it's a one shot customer, we promote the subscription program pretty heavily on that order tracking page, because Sure, we're showing you where your order is. But then hey, by the way, did you see all the perks about the subscription program, and then here's some additional blog content, here's some other products that you might like to try in your second order. And all of those are really high value touch points that are missed out on if you don't move those transactional communications outside of your standard ecommerce platform.

Andy Splichal 6:59

Yeah, some great tips. Now, besides the email transactional, changing those, what are there any other ways that you would recommend that a ecom business could improve their customer experience? Where else do you focus?

Brandon Amoroso 7:16

Yeah, so a big one is implement SMS marketing, but have it staffed with a team member or team members that are able to actually reply and engage with the customer. We've seen a substantial increase in lifetime value for customers that engage via SMS, or via text with our brands, but you actually need to have somebody on the other line or on the other end to be able to respond and to engage. And you can really make an informal and casual conversation and start to push through this more of a one to one relationship. We've had a lot of success with that. Another area is making the reordering process seamless, especially if it's a product like skincare or food, where you're either using it or eating your way through it. If let's say I ordered five different types of skews from from a skincare brand. And then in 90 days, that's typically when the quantity starts to run out. If I get sent an email, that takes me to a landing page that has my cart pre populated with all of the products that I had already ordered before, so I don't have to hop around the website and figure out where they are and add them to my cart. And then I see additional, like cross sells that could be relevant for my skincare routine. And all I have to do is press one button, and then that order has gone through. So that's like a two click process to reordering versus if you just sent them to the homepage and sent them on their way. I mean, the experience is extremely different. So making it as frictionless as possible to continue to purchase from your brand.

Andy Splichal 8:54

Now this focus that you have on customer retention and improving the customer experience is a bit different than other agencies. How and why did you decide to make improving customer retention, your focus?

Brandon Amoroso 9:08

I was never a huge fan of paid acquisition to begin with. I was always a lot more interested in like just the ecommerce ecosystem and how you can you leverage all these different apps to push a ton of first and zero party data into like your CRM system. And then use that to segment and filter and slice and dice your way to personalized emails and SMS. So that was always sort of in the back of my mind to begin with. And then we started to see the writing on the wall a little bit with the iOS updates and the fact that the the E commerce landscape was just becoming so competitive because more stores were created in 2021 than ever before, I believe. And so that coupled with the iOS updates really made it an untenable environment for paid acquisition. So in about a year As early to need 2021, going into 2022, we completely stopped doing anything that had to do with customer acquisition, and instead focused entirely on customer experience and retention. And that not only was sort of opportunistic in timing, because of the fact that paid ads are becoming so increasingly expensive over the past year. But also, it helped a lot in terms of focusing our agency and allowed us to scale a lot quicker, because we were just so hyper focused on this one area, and you can't be an expert in everything. So that that helped out a lot.

So if you guys aren't working with your clients on the customer acquisition side, what are they doing to drive traffic to their websites?

they might have a third party agency, or they have an in house media buyer. Those are typically the two ways that they're getting traffic to their website, or I mean, some brands that we've started to work with, they have like very nominal advertising budgets at this point, because they have quite a large customer file for us to work with. And a lot of organic traffic coming through their website as well. And, and so there's other ways that we help them, like get creative with customer acquisition, in a sense, like, will it help implement some pretty robust referral and influencer programs, which have components associated with that customer experience, because we're taking their customers and sort of turning them into advocates. So that helps as well. But it really it depends on the brand. I mean, we have some brands who quite literally stopped spending money on acquisition in the past year, and they just start focusing on expanding their retail footprint and maximizing their existing customer file, and really honing in on that customer experience.

Now, how much do you think most companies are spending on customer retention strategies versus customer acquisition?

I would say, I mean, the most I've probably seen a company spend on customer retention would be anywhere from like 25 to maybe $50,000 a month at the absolute most. And that would include, like working with an agency to put in some of these programs, the app costs as well going into your retention program, and then any sort of like product costs, but you have companies who spend millions of dollars on on acquisition. So the sort of the ratio is really out of whack, in my opinion. Because you're spending so much money and pushing so much money through these advertising platforms like Facebook, like Tic tock and so on. It would behoove a lot of brands to spend more time focusing on that, that customer journey. And it's so much easier to get revenue out of those customers. Like I can't tell you how many times I've logged into a play do count. And I'll just create a segment of all customers who have ordered 10 times or more. And even for some of the small small brands that we we've worked with in the past, like startups, you're looking at, like 1000 customers who have ordered 10 or more times, and they've never received an email or tax that's personalized in any way whatsoever. Yet, they've still ordered from you 10 times like imagine what they would do if you took the time to engage with them on a more personalized level. It is such a low hanging fruit for every brand out there.

Now how do you measure your results.

So we primarily look at email and SMS revenue on a on a month over month and year over year basis. But then we're also tracking sort of leading indicators of success, like net new number of subscribers to the program. tracking things like our opening and click rate, though open is pretty much a vanity metric at this point. And then we're a little bit different than most traditional, like retention email, SMS agencies in that we're tracking things like the repurchase rate, how many days is it taking typically between order number one and order? Number two? What does the product journey look like? As in if you purchase this product? First, what products are you most likely to purchase seconds. And then sort of the end all be all metric which is LTV tracking it on both 3090 180 and 365 day basis, to make sure that we're making incremental improvements to that because that's the most important metric, like all the other things that we're doing and all the other things that we're tracking lead into having a customer that spends more over the course of their life with a brand.

Now, you touched on this a little bit with the increased competition and some of the iOS updates. But if you could see into the future another 12 to 18 months, where do you see what do you see happening with Ecommerce, Ecommerce Industry?

So I mean It's gonna continue to grow. It's just that it grew too quickly. And you had a lot of investment money going into it. And so there were a lot of brands that were being by Vc dollars that didn't necessarily merit it. And then you also see why not? I would say, almost every category, but there's some more, it's really extreme, like, how many coffee brands can you have selling direct to consumer on Shopify, for example? At some point, the market is so crowded, how do you handle being able to differentiate yourself. So we've already started to see it a little bit, there are some brands that just aren't going to make it through the next 12 to 18 months. I also see some consolidation happening, some of the bigger players seeing some opportunistic buys of some of the more creative, fun, like startups that don't necessarily have the wherewithal to make it through this from a financial standpoint. And I think it's, I mean, with with any of these things, there's there's opportunity, though, there's going to be an opportunity for brands who have a retail footprint to be able to leverage that pretty significantly, because customers shop omni channel, and so the brands that are being impacted the most right now are the ones that are purely direct to consumer. And I've see a lot of opportunity for brands to leverage, like a unified POS and E commerce platform. So that way, you can have a connected customer journey, whether you're shopping in store or buying online, like when I go to marine layer, to buy a t shirt or something in store, they have my full order history, including my loyalty program, what I've returned, what I haven't returned, what I've purchased before, all from the E commerce platform, and being able to tie those two together makes it such a better customer experience.

Now you seem like a pretty young guy. Has there been any business books out there that has inspired you on your journey as an entrepreneur?

Yeah, I mean, I, I would say I read a little bit in the beginning. And then I dove so headfirst into trying to get the company up and running that I that I stopped reading. But I actually started the forest myself about two months ago, now to read a book a week into take notes and try and take those notes and turn them into actionable, like items that I can try and implement at electric or just in my personal and daily life. And that's been that's been really valuable as well. And pretty fun, actually. But one of the first ones I read was called Building a brand story by Donald Miller, Donald Miller, yeah. And are Building a Story Brand rather. And that was really helpful when I was trying to architect the electric messaging, everything from the website to our one pager, what we're communicating not only internally with the team, but what we were representing ourselves as externally. And it was, really, it really took me aback, because up until that point, I had been creating the website in a vacuum, like, I didn't take a step back and think about, hey, if you're somebody who has no idea what you are, as a company, seeing this website for the first time, are you really going to have any clue what the hell we do? And the answer was no. And so that was a really sort of illuminating book in that it helped me pull myself away from the business and think about how it could become more clear and concise to those who are who are seeing us for the first time because that first impression is super important, both from the website to the one pagers to everything. And that happened in tandem with our positioning as a retention as a service agency. So those two lined up very nicely for us.

Now, do you have a favorite success story of linear clients that you'd be willing to share?

Yeah, I mean, probably the one that I be most proud of is our continual relationship with with Soylent. And the reason why that one has been so exciting is because they have like a pretty recognizable brand name and they have historical customer file for us to work with. And we've been able to help bring our sort of more scrappy, like in the weeds, deep Shopify expertise and knowledge to help them roll things out like SMS marketing, for example, to transition those transactional emails and texts over from Shopify into Klaviyo and the results are significant and in fast when you are dealing with a brand of that scale in size. And so that's probably my, my favorite success story and the ability to have our hands in different components of the business like helping out with SEO and content, helping out with website design and development, helping out in the email and SMS side of the business truly being that like all in one customer experience retention, consultant consultants and partner for them.

Now, who is the perfect client for working with your agency? If they're out there listening, they should absolutely check you out or contact you and give you a call.

Yeah, I mean, if you're a Shopify brand, trying to improve your retention, that's really the baseline. We, the strategies and concepts that I deploy, in tandem with the rest of the electric team are broadly applicable across e commerce. But where we really differentiate ourselves is that we are experts in the Shopify ecosystem. So we are...

Do only work with Shopify?

Yeah, for the most part, about 90 95% of our brands are going to be on Shopify. And we're taught to your partners with the best in class apps within the Shopify ecosystem. And so where we really stand out is in our ability to integrate all these different Shopify solutions together to create these cohesive customer experiences. But if you had to get industry specific CPG, skincare and beauty, any brand that has an influencer or celebrity backing it with an audience that we can help them harness via email, and SMS. And then, as a part of our of us getting acquired earlier this year, we also work quite a bit with the alcohol industry as well now.

Now, how can an interested listener, find out more about you and what is available?

So electriqmarketing.com, but with a Q, instead of a C at the end of electric, and then you could reach out to me at my website as well, BrandonAmoroso.com, or find us on LinkedIn, I'm happy to chat through and be a value add wherever we can be. We also have a ton of just free resources, not only on YouTube, but PDF guides, like we just published, a 10 part retention marketing program, sort of step by step, here's 16 pages of what you should be thinking about if you're rolling out or trying to optimize your own retention program. So there's just a desire from us to continue to try and help the industry.

Well, this has been great. Is there anything else you'd like to add before we wrap it up today?

Um, I guess the one thing I would say as we go into the holiday season here is it's very important to plan obviously, your promotional calendar and and everything else that you've got going on. But just go through your website, make a purchase, see what it looks like as that first time purchase or experience after the transaction takes place. Because you really want to maximize this, this time that you have like the holidays, or when you're going to be getting the most net new customers out of the entire year most likely unless your business with some sort of like a new year new you component. And so to really set yourself up for success in 2023. As ads continue to get more expensive, you're going to want to retain as many of these customers as possible. So really focus on that post purchase experience and make sure that customers are going to want to come back and purchase from you after the holidays are over.

Great tip. Well, this has been fun. Thank you for joining us today, Brandon.

Thank you for having me. It's fun.

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