EP #352] [ENG] - How to leverage product inserts to maximise client retention - Andrew Smith

EP #352] [ENG] - How to leverage product inserts to maximise client retention - Andrew Smith Unknown Speaker: Welcome to The Ecommerce Lab By Ecomcy. This is the place for everything related to Amazon private label and e-commerce. Learn exactly what you need to start or scale your business. Get insights from the top industry experts who will discuss the latest trends and best practices in the world of Amazon. From choosing products and sourcing from a supplier to setting up your Amazon account and marketing your business, you will hear it here. Let's get started. Here is your host, Vincenzo Toscano. Speaker 1: Hello, guys. Welcome to another episode of The Ecommerce Lab By Ecomcy, the place where everything related to Amazon, FBA, private label and e-commerce. My name is Vincenzo Toscano, founder and CEO of Ecomcy. And today we're bringing on a special guest. His name is Andrew Smith and he's the CEO and founder of Swap, where they specialize on everything that has to do with personalizing essentially the experience that your consumer gets when it comes to buying your product and experiencing essentially the whole buying things around your brand. And this is something that I feel a lot of people don't talk about because they all focus around, you know, making that first sale with the consumer, but they don't focus on what do I do after that initial purchase to keep them engaged. I make sure that they keep buying from you because that's really where the money is. And today, Andrew, we're going to be discussing about some of the strategies, some of the tools you can implement when it comes to that. Also, some of the experiences that we have seen working the best when it comes to retaining the customers. So, Andrew, welcome to the show. How are you doing? Speaker 2: Thank you so much, Vincenzo, for having me on and great introduction as well. Like you mentioned, Swap's founder, CEO, located in Boston, Massachusetts, so United States area. You put it really beautifully there, but the way I like to say it is you use Swapped as a thank you to your customers and you use that beautifully crafted experience that you can build in Swapped in order to create some sort of thank you, which then leads to the direct consequences of that thank you that are beautifully crafted are reviews as well as retention. So that's definitely what we specialize in and help sellers with. Speaker 1: Thank you. Yeah, I think it's something that I feel is super important to this age. I think as I was Just briefly mentioning people only care about that first engagement, the first sale, and then they go out there to find the next line. But I don't know that actually where most of the money is made is on increasing the lifetime value of your consumer. Like at the end of the day, once the customer bought one from you, like they already trust you, they like your product. So why don't actually give them something extra to keep them coming back to you? So I guess what I'm trying to get with this is to, I guess the conversation started for today's episode is around when was something, when was this topic starting to become interesting for you? Like how you came to the realization that this was so important? Like it is because done to some personal experience or you've seen companies struggling with that, how everything started? Yeah. Speaker 2: Yeah, definitely. So around 10 plus years ago, I started at an agency that helped a lot of retailers with, located in Boston, actually, as well. They helped a bunch of retailers on ecommerce platforms, mostly at that point, Shopify was just coming up. So it was more Magento or those really old platforms facing. And then also Amazon as well. But there was that old black hat strategy of buy these giant email lists, upload it into MailChimp and then just see the results. Those would be awful. And everyone was trying to figure out ads. Everyone was trying to figure out marketing. Over 10 years ago, and it was a really messy world and no one knew how to do it. So I was trying out all those strategies. I ended up joining a firm really early called Klaviyo, which is also downtown, and joined them because first and foremost, really believed in the founder's vision. But secondly, the product was on target, which is how do you make sure that you can retain these customers? After they purchase and get more from them, and we were seeing brands that were starting with us because of that segmentation and et cetera, that we were able to hit people at the right time. You're able to see brands that were getting these crazy tactics before not working at all, starting to 100X their sales. And something as simple as messaging people, if you're a, I call them PCP brands, pills, creams, and powders, powders, creams, pills. Health, beauty, wellness supplements. People run out of your product in 30, 60, 90 days. Hit them with that email. Hit them with that text at the right time with the product and give them a little upsell, cross-sell and that 80% of your revenue is going to start coming from those customers. Speaker 1: Yeah, I think something that we find even from personal experience, at the end of the day, word of mouth is so powerful. You know, people think that sometimes the key to keep scaling a business is putting more money on ads and going out there and pretty much sponsor things and here and there. But what about actually the customer that trusts you, that can go to his friend? To a family member, I say, you know, I'm actually having the best time of my life with this product, this experience, like go and check it out. And I think sometimes creating that kind of ambassador culture is one of the reasons why some of these bigger brands are so successful, right? Speaker 2: Yeah, well, being able to contact your customer and having ownership over your destiny is what I call it. There's tons of stories about these retailers, these big box retailers that are shutting down because they didn't focus on that first and foremost. You go in, transaction, you leave Bed Bath & Beyond, they have no sort of loyalty or attention. Speaker 1: Only on pricing. They were focusing on being the cheapest and that's it. Speaker 2: Yeah, exactly. It's a race to the bottom. Speaker 1: Yeah, yeah. Now, when it comes to the whole implementation of this, I guess a lot of people, when they start hearing, you know, all these kind of strategies, when it comes to engaging with the consumer, creating this personalized experience, let's be honest, a lot of people get scared because they start thinking it's going to be very technical and need a lot of knowledge about software, how to integrate this back and forth. But the reality is, even with solutions like yours, it's very simplistic nowadays. I guess, tell us more about the barrier of entry to even create an implementation like this. From what I can see, it's actually not that difficult to create a good experience, right? Speaker 2: Yeah. Yeah. So it's as simple as toggling. So what I started with, right, because the first and foremost thing is you sell in a marketplace like an Amazon, Walmart, et cetera. The first thing you need to do is figure out how to enter people into a funnel. So when someone buys the product, how do you get them to, for example, scan it after they purchase on the marketplace? And that took a few years to figure out, honestly, because what happens is that you have like this boring black and white QR, you start putting them on labels. The easier you make it to scan, The harder it is to get results from it because that importance, what we've started doing is we've started selling the stickers themselves because what it looks like is that first engagement point, it's actually not technical at all, the results, right? Because the results are completely predicated off of someone scanning the QR code. And what we've found is that if you have a really nice sticker, you know, a sticker that feels good, a sticker that looks really good, logo, Got your color in it. We like doing the circles and make this all able to do within two seconds when you start on swaps. That is the way that you get 20 to 25% of people to scan and submit their data or do whatever action, engage, get that thank you. That's how you actually create usefulness. I mean, you know, the tech, the tech is something that we built in and we figured out and we're going to make that easy for you as well. But the first thing that people miss out on is actually the call to action, which is why a lot of people think QR codes don't work because they don't actually focus on optimizing that initial entry point. Speaker 1: Cool, cool. Now when it comes to the whole kind of, we're already starting to talk about the customization and everything around these experiences and the first question I'm sure a lot of people It's like, how do I even know what kind of a personalization or experience kind of my customer needs? Because let's be honest, the one that people might need that when they're shopping clothing is even that people buying some electronics or buying food or whatever, right? They're looking for different kind of touch points when it comes to post-purchase. So is there, I guess, some Maybe guidelines when it comes to this, like how do you know what are some of the experiences that a person buying supplements are looking to engage with after the buying process? Speaker 2: Yeah, definitely. So what we enable in our app is A-B testing. So we give you the ability to give something like a free sample versus a discount versus cross-sell, up-sell, promotion, loyalty. We actually pre-built in a loyalty aspect. So instead of making it Based on points, which I've actually found is a really losing game. If you make it off points, a lot of people don't have to track. That's a whole other topic, but we make it based off more of like a monopoly style, buy more to win, and you get tickets when you win. So what we have enabled with that AP testing is the ability to look at your actual revenue numbers and be able to determine, is this something that actually works based on the LTV increase from these initial customers? And is this something that we see sales spiking up? Because a lot of people don't do that second part. They look at the first part and they say, it's a really cool experience that our customers would enjoy. And like you mentioned, how do you make sure it works? That's something that we really focus on because if you're not looking at how many people engage and how many people go back to re-engage and how much that LTV spikes versus decreases, then you're never going to be able to actually successfully grow as a brand because you don't understand exactly what your customers want and enjoy. Speaker 1: And when it comes to timelines, like when you're implementing this, because you mentioned you need to get the feedback to essentially get a feeling of all of this. How long do you have to test some of these strategies? Because I'm assuming like sometimes a month or two months is not enough to really for you to come to this conclusion. So is there some timelines that you usually recommend people to stick to, to really make a decision that's validated? Speaker 2: Well, this is a big reason why companies need full-time agencies and full-time partners to work with them, because this is something that someone needs to be doing at all times with their business, because not only if you get some strategy down, will things change, but also if you're working with that agency or partner, there's going to be suggestions that they're going to have later on. It is a complicated process that takes time, full-time effort, and you can't necessarily AI how your customers think about your product. It's just not going to go away with the advancement of technology. You're going to need to cater and create strategies around your customer journey forever. And that's a benefit because it is what differentiates you as a brand and it starts creating that secret sauce for you. Speaker 1: Yeah. Now when it comes to the integration, let's talk about that because you briefly mentioned the beginning marketplace like Amazon and Walmart, then really a lot of these things we're talking today is very limited when you don't own the customer. So I guess just to make a quick parenthesis here, do you feel these are things that unfortunately as it stands right now is purely limited to D2C or there's certain things that maybe you can do your pros even if they're in Amazon via QR code or things like that? What is your experience with that, Osmar? Speaker 2: Yeah, yeah. So for example, you have to make sure you're sticking with compliance no matter what channel you go through, which is why, and Amazon is the trickiest one for that, which is why we're focusing a lot of efforts into making sure that our Amazon compliance is Right and proper. But one thing that you have to keep in mind when you're working on marketplaces is that the marketplace technology that you're using to distribute your product is only there to ensure that their sales go up. So they don't care if your protein powder or your cream or your hair supplement or anything like that. They don't necessarily care that. The Ecommerce Lab continues growing. They only care if the entire category grows because they want to make sure that walmart.com gets more walmart.com sales, amazon.com gets more amazon.com sales, which is why you need to figure out desperately how many differentiators you can actually have. Because like we mentioned in the first point of this podcast, it's a race to the bottom if you don't have those differentiators as a brand. Cool. Speaker 1: Now when it comes to, and this is a curiosity actually that I would like to get more your take from you, like with AI now. I feel like now AI potential is bringing a new mix into this because now with AI you could reverse engineer From the information of the consumer, how they look like, what they need and everything, and how you could potentially even personalize things on the go. Is this something you're experiencing on your niche, like now using AI to maximize essentially as close as possible what you know the consumer likes to see after the purchase, right? Speaker 2: Yeah, yeah. Basic demographic information is always important. Obviously, you have that information on the customer and you're able to target them more effectively. One thing that we saw work really well with Klaviyo was the simplest AI thing ever, which was If this person's name is a guy versus girl's name, send them a pink templated email. Yeah. And that is a huge revenue driver. So like you're saying, like AI is starting to do these things, but even the simplest of AI use cases like that is a serious boost. Speaker 1: Cool. Now, let's start diving a bit more into specifics. Like, I know we're talking high level about, you know, high changes from industry to industry, the platforms and everything. I would like to hear more about the type of experiences people can get, right? Essentially, it could be down to loyalty, it could be down to discounts, it could be to a free gift, it could be so many things. And I know for a fact that I'm sure you To some extent, I have seen that data high level. There's some of them that are more towards engagement, more towards retention, more towards increasing lifetime value. Like from your experience, which are the ones you think this is the most half, because these are the ones that I always see working, and which are the ones that maybe are more experimental, maybe you could say. Speaker 2: Yeah, I would say everyone has and everyone should have some element of just discounts towards next purchase. I think that's a great one, but for specific SKUs and specific kinds of cross-sells, so for example, if you know that X percent of people will buy this item after buying the first item, which is really good data that you can get from a few platforms, is that if you have that sort of information and you know that that next product could be worth purchasing, then that's the time you hit with a free sample. With a smaller element of the scale, or if it's not a completely free sample, free product, excluding shipping, maybe just free shipping with a bigger discount, just get people buying the next product because you know that you're going to have more people purchasing it. And then the other one that's more experimental, I would say, is always some sort of loyalty. Loyalty is Really interesting because people think they have it down at the points, but you know, you do the data and I've never seen a company have more than a few percent lift. With someone joining the loyalty program, which is really interesting, but versus the average LTV, which is really interesting, but it's something to keep in mind with loyalty, where the margins that you're gaining might not necessarily be worth something more complicated unless you figure out, for example, what we're building with our monopoly style loyalty, where the gains that we're seeing can be up to 70, 80%. Speaker 1: Awesome. Now, when it comes to also deploying this in terms of all your clients, do you see that usually clients will benefit more start testing this all at once with the whole kind of email list? Because at the end of the day, there's different ways for you to deliver this experience. It could be to your email list, It could be to your product inserts. It could be different kind of channels. I guess what I'm trying to get with this is like, which are the channels people should test first? Like do you think email list is the first easy go to give it a try? Or should you first start with the packaging? Because I guess just making an example, the packaging. Packaging requires a lot of preparation. You need to manufacture and everything. And then what if you get it wrong? You don't even have a validation that was actually the experience. And then you have all these boxes and everything. Why people should start experimenting the channel in terms of testing all of this? Speaker 2: Yeah, so that's a really good point that it takes a while to get the packaging up and running but the amount of margin that you'll see different from the packaging is significant which is why I usually recommend going for and it's a tricky one because you're right like you need to manufacture. We usually recommend to speed line the process using stickers So we actually send the stickers to your warehouse directly. So you get those stickers in five to seven days post-purchase from swap. So that's something that I recommend just trying out the stickers. But that post-purchase experience, and that's why Swapped specifically is extremely valuable to brands and why people sign up at the rates they do, which is you don't have this sort of control or any control on a marketplace. And you do on D2C, so you could practice with an email list, but there's only so much lift that you're going to have versus Amazon is 70% of your sales, 80% of your sales. You're probably going to want to understand 80% of your customers and get them to purchase again. Speaker 1: Cool, cool. Now, when it comes to another thing that I usually wonder when it comes to essentially the implementation of all of this is When it comes to also defining the success of this, because at the end of the day, different brands might have different kind of perspectives on what success will look like in terms of after implementing this. Some people might be revenue driven, some people might be awareness driven, some people might be down to how many clients they keep on board. Do you usually have a recommendation for this? Because even from the space I come in, Amazon, sometimes people get too fixated, for example, on ACOS and TACOS and all of that. But there are KPIs you should be looking for. It's not always about profitability. It's about sometimes the rate of growth. It's just about new to brand matrix or things. So specifically for post-purchase kind of experiences, what are some of the KPIs people should be Essentially tracking beyond revenue, you know, for example. Speaker 2: Yeah. Yeah. I, well, this is one that I think is really interesting as well, because the byproduct of what we do, a lot of people that I've seen, like, you know, competitors in space, they force, for example, like a review or something like that. And in exchange for experience, I'm under the guise of like, you should never force your customer to do something. And for anything, you should thank them and then get out of the way. And what we've seen as a consequence of that, is direct consequence of that is review velocity increase. So we've had many brands that have SKUs that actually in an account right now looking at it, there's like this brand has seven SKUs, the three SKUs that they have on us, have 104, 122, and 200 or 279 ratings and reviews, and the other ones have less than 50 each, all the other ones. So going into these brands and just seeing how ridiculous that differentiator is of what the ratings are like when you actually give someone some sort of Post-purchase experience that thanks them versus that doesn't, without any sort of incentives, without any sort of reason to leave a review, it's truly insane. Speaker 1: Cool. Now, when it comes to, and I guess start bringing this now when it comes to also the demographics of things, this is something I wanted to connect with the previous point you mentioned. Are you also seeing some now combining demographic with the seasonality effect? Because of course you have the effect of the gender, the age and all that, but I also see, especially working with so many brands, that that also gets even exponentially more complex when you combine that, for example, with Halloween or specific seasons of the year. That is all a different mixture altogether because the behaviors get all kind of shifted in different ways. So how does the seasonality play some effect here? Because then maybe a person looking to buy a product in Halloween would be kind of different than during Valentine's Day, right? So what do you see as well? Speaker 2: Well, I see actually a bigger differentiator from age demographics and regional demographics. So, for example, I know that someone, if you're selling to majority of people in LA, well, it's more like region more than age, actually, because if you sell to the majority of people in LA, the amount of QR scans you're going to get is actually higher than if you sell to South Carolina. Interesting. Yeah, it's really interesting in terms of like. Speaker 1: I guess the behavior is more embedded. They have been educated more that QR code brings you something, I guess, right? Speaker 2: Yeah, yeah. We found that like Europe and Asia are actually higher than most of the US states as well in terms of scans. And I'm here to talk about engagement, which is really interesting. There's some areas of the U.S. that you get very, very, very high, the highest, and then some where you get the lowest. And as someone in the U.S., that's like my primary focus, but we have insane metrics for someone scanning in France and in the U.K. as well. So definitely all over the board with location basis. I would say the biggest differentiator. Speaker 1: Cool. Awesome, Andrew. So I guess to start coming to a closure, like whatever it may be. So maybe mistakes you would recommend people to avoid when implementing something like this. And then it would be good to also conclude like how solutions like Swap can help with executing all of that. Speaker 2: Yeah. Yeah. So I think the biggest mistake I see brands make every day is they try to do something that is a little more undercover. They'll do something where it's like a very difficult QR code to find, scan and whatever for this or that reason. If you're doing a strategy like this, it's already hard enough to get people to look and scan at the code. So if you're doing a strategy like this, make sure that it's something that actually works in scale. That's one thing that I always say. If someone mentions to me they're doing this QR code or this QR code campaign, I say, what does that QR code look like? And they'll show it to me, I can tell you in two seconds how many scans that QR code is going to get over how much period of time. And it's a really interesting thing because it never changes. It's always around that same metric. Speaker 1: Cool. That's a good one. Yeah, I think at the end of the day, I mean, it's all about the visuals, right? Like you need to pursue, like, why do I need to scan this one and what I'm going to get behind? Speaker 2: Yeah. Speaker 1: Awesome. And I guess to conclude with everything, tell us more about how your solutions can help with that, because at the end of the day, everything we're discussing on today's podcast can be simplified so much with your solutions. So tell us how does it work and how people can essentially test it. Speaker 2: Yeah, yeah. So when you start with Swap, you sync your Amazon store right away, and we are able to link the ASINs directly to your landing page. So when you, as a customer, submit your email, et cetera, or just go through the landing page, you mark the ASIN that you purchased or the product ID that you purchased if you're just doing another marketplace or Shopify, and that automatically links that customer to that product. Send them to your attention marketing channels if that's an option that you choose. And then also starts helping that customer walk through the journey and helps us get that information, that data that we're talking about collecting to help them post-purchase and repurchase more often. Speaker 1: Awesome. Speaker 2: Cool. Speaker 1: So what I'm going to do is leave the link down below so people can find it. And in case people may want to have a deeper conversation with you in terms of technicality, how people can find you. Speaker 2: Yeah. So very active on LinkedIn. If you're putting the link down below my, it's swappedqr.com and I'm Andrew. It's just easy to remember. Andrew at swappedqr.com. That's an easy one. So we also have a demo button that I'm very responsive to on the website. So feel free to reach out and thank you for having me on. I really appreciate it. Speaker 1: Awesome, Andrew. It's been a pleasure. Thank you so much. I'm looking forward to having you in the next one. Thank you. Speaker 2: Yeah, likewise. Thank you very much. Unknown Speaker: I appreciate it. Speaker 1: Bye-bye. Speaker 2: Bye. Unknown Speaker: Thanks for listening to The E-Commerce Lab by eCommC. Be sure to subscribe so you don't miss an episode. While you are at it, we would appreciate it if you could leave an honest rating and review on Apple Podcasts, Spotify, or wherever you listen. That will make it easier for others to find out about the show and benefit from it. Want more? Visit our website at www.ecomc.com where you can get your first consultation for free. Or find us on Instagram, Facebook, and LinkedIn at ecomc.