The TL;DR:
- Let’s Chat D2C: Was Yotpo just three years ahead of everyone with consolidation and becoming an all-in-one ecommerce marketing platform?
- What I’m Thinking about this Week: What is the True Value of a Customer?
- The D2Z Podcast: Agency Partnerships, Retention, and Team Member Diversity with Megan Blissick of Retention.com.
- App Highlight: Retention.com and how Electriq uses it.
- ICYMI: My Analyses of Shopify Editions Winter Report and Recharge’s 2023 Subscription Commerce Report.
- Upcoming Events: I’m at Shoptalk in Vegas today until Thursday morning! Let me know if you’re in the area and want to connect. I’m also presenting my “10 Steps to Building a Retention Program” at ChargeX in D.C. from 4/26-4/28 and have discounted brand tickets if anyone wants them.
Random tip: Research how AI can reduce your workload, especially on routine and repetitive tasks.
Let's Chat D2C: Was Yotpo just 3 Years Ahead of Everyone?
Where We Started: Best-in-class Point Solutions that Integrate
When I started Electriq in mid-2019, the Shopify ecosystem was all about single-solution apps that were all integrated. You went with a best-in-class provider for email, SMS, reviews, quizzes, subscriptions, and so on to create your marketing stack. Everyone integrated with everyone.
But, at a certain point, how much more can you iterate on a single product? At what point does investor pressure to grow, business needs for profit, and merchant desire for a bundled solution lead to these tech platforms encroaching on one another and disrupting the historical MO?
Products are becoming commoditized. The most obvious example here is reviews.
A quick search on the Shopify app marketplace for “reviews” leaves you with over 550 options to choose from… You can’t tell me that the difference between the #1 app and #10 apps is that significant.
Where We're Headed: Product Line Expansion through Acquisition or the Commoditization of Other Platform’s Products
It’s why Okendo now has Okendo Connect (a direct competitor to our existing survey solution in our tech stack - Fairing), and Yotpo started getting bigger quickly (but more on this below).
Let’s focus on the Shopify Plus Certified apps. Each one is looking around and asking itself how much more growth is in the current product offering for us and, for example, how long “just being a point SMS solution” will be enough for merchants.
It’s not like they’re just doing this for the sake of profits and growth, either. Merchants are demanding a more integrated approach that is simplified and also produces some cost savings. And does it make sense to have email, SMS, push notifications, and direct mail from different platforms to your customers? Talk about a nightmare roadblock to creating a cohesive customer journey and experience.
The Yotpo Example
Yotpo saw this writing on the wall, albeit earlier than the rest of the ecosystem and arguably too soon, and chose to get bigger FAST through acquisition. Let’s take a look at their current product offering:
- Reviews: Reviews Product - How Yotpo started in 2011
- Visual UGC: Instagram Widgets & Galleries, Etc. Product - Built in-house in 2018.
- Swell Rewards: Loyalty & Referral Platform - Acquisition in 2018
- SMSBump: SMS Marketing - Acquisition in 2020
- Subscriptions: Subscription Platform - Built in-house in 2022.
None of these solutions was my #1 choice in their respective category. I think the innovation of the acquired products halted as efforts were put toward integrating them into the more extensive Yotpo Ecosystem of products. This is why I remarked that they might have been a bit too early in their efforts. Still, it could be downright visionary, as they’re now significantly ahead of the rest of the ecosystem when building a complete bundle of ecommerce products.
There are really two types of tech companies right now:
- Category leaders who were best-in-class for a specific function (i.e., Attentive for SMS, Klaviyo for email, Okendo for reviews, etc.) that are now branching into new product line extensions (i.e., Attentive launching an email product, Klaviyo launching SMS, Okendo launching surveys, etc.)
- Software aggregators like Yotpo already have a bundled suite of products that weren’t necessarily best-in-class, but now that they’re getting closer to being cohesively integrated and doubling down on product investment, it’s become a completely viable option for an agency like Electriq to use.
Let’s see who comes out on top!
My Ideal World
In my ideal world, there’d be four software companies (and maybe even just one in the future):
- Zero Party Data: Reviews, Quizzes, Surveys, etc., all live under one roof
- Upsell/Cross-sell and Personalization: Like a Rebuy
- Retention: Email, SMS, Push, and Direct Mail
- Commerce: One-shot and Subscriptions
There’s a lot of upside to having platforms that cover multiple areas for us to create a more integrated experience. For example, zero-party data. Right now, we use a separate solution for the following:
But we’re asking customers the exact same questions. For a skincare client, we ask what their skin type is in the quiz, but then we’re also asking in the post-purchase survey and the review request process. Why? Because these disparate systems don’t talk to one another, we can’t say, “Hey, this customer already answered this question in the quiz, move on and ask another question we want to know about in the survey.”
And in this current state, we have a bunch of duplicate data in Klaviyo as well.
My recent quote highlighted by Klaviyo in How to do better with email: 8 email marketing tool must-haves in 2023 sums up why data aggregation is so crucial, “The ability to ingest data from your ecommerce platform and all other third-party apps is crucial. If you don’t have all of the data on your subscribers in one place, you aren’t able to effectively deploy an email segmentation and personalization strategy.”
What the Future Holds
In the next five years, I see 3-5 dominant software companies in the Shopify ecosystem. I’d be willing to bet Klaviyo, Yotpo, and Recharge will be three of them, but let’s see!
What I’m Thinking About This Week: What is the True Value of a Customer?
For the past few years, I’ve been hammering on the importance of LTV and why you need to be focused on increasing it. And historically, we’ve used this metric to create VIP customer segments to target for special messaging and programs.
But is LTV the only way to assess the value of a customer? And is this even giving us the whole picture?
A year ago, I might’ve said yes. But, more and more information I’m coming across is forcing me to see that it is truly far more nuanced than that.
Referred Friend LTV
After meeting with Mention Me last week, we discussed using the LTV of referred friends to understand the true value of a customer. For example, let’s say you have these two customers:
- Customer A: LTV of $500, referred one friend with an LTV of $80
- Customer B: LTV of $200, referred three customers with a total LTV of $800
Historically, if we were defining VIP customers based solely on LTV, customer A would be a VIP customer, but Customer B wouldn’t. Obviously, that’s not ideal, so I’m starting to rethink how we actually go about defining VIP customers. And maybe we have two separate types now, VIP purchasers and VIP advocates!
What Other Ways Are There?
This week, I’m thinking about other things I might be missing out on when trying to assess the true value of a customer and, subsequently, what criteria should be used when defining what a VIP customer looks like.
This Week’s The D2Z Podcast
#53 – Agency Partnerships, Retention, and Team Member Diversity with Megan Blissick
🎧Listen Now 🎧
In this week’s episode, I sat down with Megan Blissick, Head of Agency Partnerships at Retention.com. Specifically, we explored the following:
💰 Partnership programs and how they operate within the ecommerce ecosystem.
📲 Tracking technology to convert potential customers across devices.
😎 The differences between working at a large company versus a startup and the importance of building processes while navigating sunk-cost bias.
🚀 Tips and tricks on growing and scaling a team, including hiring tips for diversity.
App Highlight - Retention.com
❓What is It: Browse Abandonment Identity Resolution, Cross-Device Identity Resolution, and Meta First-Party Re-targeting
🏅 Differentiator: Retention.com leverages an expansive ID Matrix and identity resolution technology to help brands re-engage their site’s highly-active, high-intent visitors. Our tools immediately unlock new revenue for e-commerce brands with almost no lift, utilizing existing automation tools and campaign creative to re-engage their site visitors in critical moments across the customer journey. As industry leaders in customer recapture marketing, our product is built to capture this data in real-time and work with a brand’s existing tech stack.
💰 Starting Price: $500/month w/ an annual contract and a 60-day opt-out period.
🚀 How we use it: Three Main Ways!
- Cross-Device Identifiers allow us to engage with an additional 50% of our client’s opted-in organic subscribers by stitching together multiple device IDs for the same person.
- Meta integration allows us to re-target up to 80% of our client’s site visitors, re-building the bridge that collapsed with the new cookieless policies.
- Retention.com’s browse abandonment tool allows our clients to re-engage via email with up to 30-40% of the most highly-active anonymous visitors of any given landing page.
ICYMI
My Analyses of Shopify Editions Winter Report and Recharge’s 2023 Subscription Commerce Report
If you missed it, check out my in-depth analyses of Shopify’s Editions Winter Report and Recharge’s 2023 Commerce Report! Lots of exciting takeaways from both of these reports, including where Shopify is focusing investment to what sort of subscription trends merchants need to be aware of in 2023.Upcoming Events
Shoptalk & ChargeX
I’m at Shoptalk in Vegas today until Thursday morning! Let me know if you’re in the area and want to connect. I’m also presenting my “10 Steps to Building a Retention Program” at ChargeX in D.C. from 4/26-4/28 and have discounted brand tickets if anyone wants them.
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