On this episode, we go into retention marketing strategy fundamentals that scale up eCommerce businesses.

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In this episode, we are talking to Jess Chan, Founder/CEO of Longplay, a full-service eCommerce email and lifecycle marketing agency, and Backbone, a platform designed to streamline email marketing for small eCommerce teams. This is Jess’ second time on the show. If you know what it takes to get in this pod twice, you know that Jess is a truly special person or guest.

Jess is one of the top retention marketing experts I know out there and someone I’ve introduced to numerous eCommerce teams. To find out more about her, I encourage you to go back to season seven, episode 23 of this podcast, which I recorded months ago. The focus of that episode was Jess’s background in marketing as a CMO in the eCommerce space and consumer brand space, as well as a deep dive into the lifecycle and email marketing for eCommerce.

This episode, however, is special because Jess has now created Backbone, which is a turnkey eCommerce solution for smaller eCommerce teams that replaces the planning and structure of typical email and lifecycle marketing agency renders to smaller eCommerce brands. I asked Jess to specifically cover retention marketing as a strategy that sits well above lifecycle and email marketing, which, according to Jess, encompasses email marketing, direct mail, repeat purchase apps, loyalty programs, quizzes, post-purchase communication, and even cross-selling.

We also go through her eight essential email marketing flows for brands doing over $1 million a year in revenue or less required to grow to about $10 million plus a year. One more thing, Jess has put together a D2C email flow foundations course on Gumroad. Any brand owner doing $1 million in revenue or less should study this and integrate right away. Find out more about this in this episode or on 2xecommerce.com. If you want to gain valuable insights into retention marketing from an expert with a proven track record, then pay attention. Without further ado, let us get started.

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Jess, welcome to the 2X eCommerce podcast.

I am excited to be here.

I’m excited too. This is the second time you’re coming on the podcast. The last time was in September of 2022.

It feels like an eternity ago.

A lot has happened since then. I wanted to give the audience a refresher on the fundamentals of email marketing and retention. It’s lovely to have you back on. Great stuff.

I’m excited to dive into retention, it’s so much more relevant of a topic in 2023 as it was compared to back in 2020 and 2021 when acquisition was going well. We’re noticing acquisition channels like Facebook, TikTok, and Instagram are becoming a little bit more competitive and a little bit more challenging. Because of that, we’re seeing a huge focus on the D2C eCommerce industry on the importance of retention. I’m super excited to dive into all of that with you.

In retention, what would you say are the macro trends you’re seeing in this space now in 2023?

What we’re seeing is the importance of having multiple retention channels as well as a holistic retention strategy. What I mean by that is the D2C eCommerce industry is hitting its mature stage. In 2022, there was a lot of like, “The sky is falling. We’re going to go into recession,” all this stuff that’s happening. It’s getting tougher but I don’t think we’re going to a full recession right now.

What’s happening is the D2C eCommerce industry is getting more mature. There’s a lot more competition. We’re no longer in a state of the industry where you can launch an ad and we print money and everything is amazing. We have to work for success now in the D2C eComm space. Because of that, acquisition is getting a little bit more saturated. It’s still 100% working but we need to look to other areas of business to be able to build a profitable, scalable, and sustainable D2C eComm business, and retention has become an important part of that.

When acquisitions are becoming more tough, we can’t just grow by acquiring new customers, we’re going to grow by retaining our existing customers, keeping them for longer, and getting more a higher LTV out of our existing customers, and that’s where a holistic retention strategy needs to exist. Years ago, when everyone was talking about retention in D2C eComm, all we were talking about was email. Are you sending out emails? If you do, you have a retention strategy.

Maybe if you’re optimizing everything, you have some SMS going out as well. Whereas now, with retention strategy, having email is the absolute basic, minimum, and SMS is also right up there in terms of you should have a basic SMS program going. There’s so much more to retention than just specific channels.

A large part of it is trying things like direct mail to maintain customers, loyalty programs, and having a strategy to reduce subscription churn or upsell your customers to a subscription product. Platforms like Tapcart, Relo, or Repeat help with your cross-sell strategy and your upsell strategy. There’s a lot more that needs to happen on the retention side and thinking about how you retain your customers by cross-selling them, upselling them, and winning them back. How do you build loyalty programs? How do you get them to refer customers? That goes beyond marketing on a specific channel like email.

There’s a lot to unpick there with regard to all of the elements. You mentioned a lot. You mentioned loyalty programs and cross-selling along with SMS, email, and specific strategies to reduce churn for subscription businesses. That’s a lot. I was at a private eCommerce event, it was a private dinner, and most of the merchants there were in the wine industry. I posed a question there around whether subscriptions played a huge role and they were like, “A resounding yes.”

The one thing they said that has changed in 2023 as compared to years prior is that order value has gone up not only as a result of inflation but as a result of people wanting to relish their purchases. The one thing they’ve realized is that frequency has gone down. If they were getting 6X frequency every 12 months, it’s 4X or 5X. Even though AOV has gone up, that’s been a major challenge with regard to frequency. If we zoom out at Longplay and Backbone, you’re privy to a lot of data, what are you seeing in that frequency bit? After that, we’ll jump into the specific channels within the retention marketing strategy.

What we are noticing is a high-level trend is getting more challenging to get repeat purchases and subscription upsells. Years ago, everyone was a little bit more trigger-happy in terms of starting a subscription whereas customers are a little bit more hesitant these days so it takes a little bit more brand loyalty to build up to it.

That being said, what we have noticed is that, for example, when we look at a brand’s data, we might notice that the number of people who go from making a single purchase to making a second purchase has gone down, and it’s a little bit more challenging. At the same time, we’ve noticed that people who’ve made a second purchase and go on to make a third purchase have gone up or people who’ve made a third purchase and who go on to make a fourth purchase are going up.

What we’re noticing is we’re getting potentially higher AOV purchases on that first purchase but getting them from the 1st to 2nd purchase is a little bit more challenging. Getting them up to a subscription is a little bit more challenging. Also, people are a little bit more sticky once you do get them past that initial hurdle of making that 2nd or 3rd purchase or getting them on a subscription. This is going to be so dependent on the industry, types of products, or types of customers. A general trend that we are noticing is a little bit more stickiness and a little bit more brand loyalty but it is harder to earn that brand loyalty.

My theory from that is purchase one is more like a trial, “Do I like this experience or not?” The ones who churn from 1 to 2 don’t like the experience and they move on. It might even be the price. They might be price sensitive. There are many decisions for them not to make that second purchase. Purchase two seems to me like a vote of confidence on the liking of the experience. They’re more invested in that experience so they go 2, 3, 4, and to infinity.

That purchase from 1 to 2 is where a lot of the initial retention efforts are best spent. We find a lot of brands miss out on the post-purchase experience where the post-purchase experience is not just like, “Thanks for buying.” That used to be what post-purchase was. It’s like, “We sent them a thank you email. We have a post-purchase nurture strategy.” Your post-purchase nurture strategy should be around, “How do we prevent refunds? How do we get them super excited for the product? How do we educate them on how to use the product? How do we set expectations? How do we educate them on using the product regularly?”

Also, painting the picture of like, “If you use our product consistently for a month, here are some benefits you can expect.” Also, potentially driving word of mouth. There’s so much more to the post-purchase nurture strategy. I Tweeted about this because I’m like, “Why is no one talking about post-purchase nurture strategy?” Your post-purchase nurture, before they get the product and right after they order, is probably one of those critical parts of your retention strategy for ongoing purchases to avoid having to win back a customer. No one talks about that part.

Since no one is talking about post-nurture strategy, let’s break it down for the audience. It’s a combination of physical interactions with the product and messaging. I’ll leave it to you to break it down.

One of the thought practices that we love to have our team go through is the question, “If someone buys your product one time and they don’t come back for a second purchase, what are twenty reasons that they might not have come back?” That’s a good start to building a post-purchase nutrition strategy. For example, let’s take the case of a pet food brand. They bought some new dog food for the dog, they bought a bag, and they didn’t come back in 60 days to buy a second bag.

What are twenty different reasons? One could be the dog just wasn’t willing to eat the food and didn’t like it or it was too expensive. Maybe they bought it and forgot about it and it’s sitting on a shelf somewhere because they pre-bought it and they haven’t used it yet because they’re still using their current bag of dog food. Maybe they’re like, “It’s pretty good but is it worth the price? I could get a cheaper one and it’s probably about the same.” Maybe they’re like, “It’s a little bit inconvenient. Now, I have to remember to reorder. I’d rather walk down the street to the dog food space.” Whatever those ideas are.

From there, you can then backtrack into what storyline, what education, or what material. What do they need to hear in order to avoid those objections? It can sometimes be as simple as having a CXT member reach out in your post-purchase nurture strategy. That’s one that we love from an email and SMS side of things. Write a plain text email that’s automated but feels like it’s coming from your CXT member that’s checking in with them.

Would you automate that randomly?

We would automate everything. You don’t even have to make it random. You can put it into your post-purchase nurture flow. You would have like, “It’s Jenny from the brand. I saw that you bought this product two weeks ago. I just wanted to check in and make sure you know how to feed it to your dog and integrate this new dog food into their diet.” It’s more so like writing it from a tone that feels natural. Maybe they need education on how to incorporate ship dog foods because there’s an acclimation period.

Maybe they need some tips on like, “Maybe you can add some toppers to this dog food if your dog doesn’t like these flavors.” Also, maybe they just need to paint a picture of like, “Here’s how your dog’s health is going to improve month 1, month 2, month 3, and month 12 of using this product, and get them bought into the longer term strategy. Maybe that’s through testimonials of customers who have fed their dog food for six months and the differences they’ve seen.

The big thing is remembering the sales process does not stop after they’ve made that first purchase. It’s not like, “They made a first purchase. Now we’re just going to thank them and then we’ll resell them again when they’re ready to make a second purchase.” The sales process continues from the moment that they made a first purchase all the way until you make a second purchase.

The sales process continues. It’s a reinforcement. You need to keep on letting them know the benefits they’re getting or they expect to get from the product so they look for the benefits. As human beings, we have so much success but we look at that one thing. We’re wired to look at the things we can fix, the negatives. If we amplify those positives, they’ll look for those positives and they start to see the value and utility.

I love exactly how you put that, which is to help them look for what you do best. If you notice, “Your dog’s coat is going to get shinier.” Planting that seed, they’ll probably see that shine regardless of whether it does or doesn’t immediately. Play into the placebo effect as a marketer. It doesn’t necessarily have to be supplements because that’s a little bit easier of an example in terms of benefits but even clothing companies. If someone’s buying a piece of clothing, show them five different outfits that they can create with that one top. Get them to wear your stuff regularly.

How I’m thinking about it is if I bought a shirt, it feels amazing, and I’m excited about it. Now, I have five ways to wear it. I’m wearing it a little bit more often. People are like, “Where’d you get that?” I’m talking about your brand more often. Also, that’s going to enforce, like, “I’ve got some good outfits and compliments from products from this brand. I’m going to go and shop again a little bit more.” It’s all these little things where there’s no downside. Continue selling. You can no longer approach retention marketing as a transactional thing. It’s about nurturing the relationship.

I like the bits on the post-purchase nurture strategy, powerful stuff. Another thing you pointed out was loyalty programs. What’s your take on loyalty programs and best practices to integrate to maximize retention and lifetime value?

I’ll start the other way. One of the biggest mistakes brands make with loyalty programs is that we set up the program and then they maybe launch it but it usually lives as a little thing on the footer of their website. Maybe the most die-hard fan will find that loyalty program for themselves. The real value of a loyalty program is integrating it throughout your retention strategy.

Let’s email marketing and a loyalty program. You should be incorporating your loyalty program in your welcome flows, in your post-partition searcher flows, and in your abandoned cart flows. It’s about how you get people bought into the loyalty program itself but also how you use the rewards and the points as different modes of retention.

For example, rather than doing 20% off site-wide, you can do 2X points. It’s things like that. The loyalty program gives you these mechanisms to be able to incentivize purchases while also not overly discounting your brand. You’re not doing 20% off all the time. Two extra reward points still feel like a good deal for your diehard fans and it incentivizes them without having to cheapen your brand constantly. Also, make sure you’re reminding customers to use their loyalty points.

The big thing with loyalty points is it can create this level of FOMO, like, “You have $10 worth of loyalty points sitting here. If you don’t use it, that’s $10 wasted.” They’re probably not going to make a $10 order. They’re probably going to make a $30 or $40 order. How do you use your loyalty program to jumpstart that purchase process? That’s where we see brands missing out with loyalty programs. It needs to be integrated into your retention strategy. It can’t just be slapped on, like, “We have a loyalty program. Here are some points, you should join.” That’s usually where it lives for most companies.

Would you use channels like SMS to remind them? It’s quite refreshing and reassuring to know, “I’ve got 100 points of my loyalty. It’s worth $10.” Do you think SMS is a good nudge channel to communicate their loyalty status with them or would you just stick to email?

Honestly, it should be everywhere, email, and SMS. I’ve seen some brands do a good job of having a custom thing on their website like a banner and things like that. That’s more personalized. That’s a little bit more heavy coding. Treating your loyalty program as its own thing where it gets pushed in all these different channels. You also brought up a great important point of messaging with loyalty points, which is don’t just say, “You have 100 loyalty points.”

Translate it to a way that makes sense for them. It’s like, “You have $10,” or, “You’ve earned a free t-shirt with your loyalty points. You have a free t-shirt waiting for you on your next purchase.” It’s bringing it back to, what is a tangible dollar value or even item that they can claim? When we talk about loyalty programs, I always bring it back to like the arcade. You want to feel like a kid at an arcade where you’re like, “I have all these arcade tokens. I get to buy a pencil. I get to buy a rubber bouncy ball.” Bring that type of mentality back.

For the winnings. That makes a ton of sense. My next question is what brand in your opinion is executing loyalty programs excellently and not just well and why do you think they’re seeing such success?

Dr. Squatch was a brand we worked with for a pretty extensive amount of time, probably three years. We’re no longer working with them. They’re pretty huge at this point. We were working on their loyalty program pretty in-depth and we’ve seen them continue scaling at their program. Their program works well because it’s integrated into the marketing strategy. When they have a new product launch, they might do the typical product launch but also early access might get extra loyalty program points. If you join the loyalty program, you’ll get early access to products.

They’ll run a lot of promotions integrating bonus points into the actual promotion strategy. They’re great at using product launches to drive people to join their loyalty program and also vice versa. They’re great at using their loyalty program to drive customers to purchase new products. They’ll use loyalty programs to boost the strategy on cross-selling. For example, if you bought product A and we want you to buy product B, that’s two extra points you get from trying product B. It’s another mechanism for incentivization of people to either buy more, which retain their customers, or whatever those things are rather than being slapped on separately. They do a fantastic job of that.

Frank Body, I also love their loyalty program as well. They do a good job of tying the incentives to rewards that their customers care about and also, it feels VIP. It feels like there are these different tiers in the loyalty program and you’re getting more and more integrated into their brand. They also have a strong community-built brand as well. Those are probably the top two D2C eComm brands that are doing a good job with the loyalty program. It’s top of mind.

How do you tier out fundamentally? Let’s say we’re a $1 million brand and our next base camp is we want to hit $5 million to $10 million in revenue and we know retention is the clear pathway to achieving our results. When we’re tackling this loyalty program layer in our retention markets and strategy, how many tiers do you think work, VIP, silver, or gold? How would you tier it up at its most fundamental without getting too complicated?

I would start off with three tiers. I wouldn’t overcomplicate things. Tier one is anyone who comes in, they start at tier one. Maybe tier two is you’ve earned a certain number of points. Tier three is you’ve earned more points. The difference between the tier should be how many points you receive on each purchase.

Also, depending on your brand, it could be early access to new product launches, exclusive access like certain promotions or limited edition drops, or things like that. We’ve seen brands that have a strong brand presence using swag as an incentive between different tiers. It depends on what your customers care about. If your customers care more about savings, then maybe 2X the points and a discount code work best. If you have a strong brand or a strong community, early access, VIP, and swag could work a little bit better than extra points.

Swag is a good thing.

My thing is, with D2C e-Comm, you got to earn the right for your swag to matter. I’ve seen a lot of brands throw the tote bags and things like that. If you haven’t built up a strong enough brand presence, it doesn’t matter. eComm brands like Liquid Death and Dr. Squatch earned the right for their swag to be valuable. That’s always cool to watch from the outside as well.

The other difference between a $1 million brand trying to get to $5 million to $10 million too is don’t overcomplicate it. A lot of brands try to do too much at once with retention in the same way that they try to do too much at once with acquisition. With retention, the same strategy is you need to lock down one channel first and then continue expanding and continue integrating rather than doing email, SMS, a loyalty program, a mobile app, and all this stuff, and none of it is done correctly, which is what we see.

It’s like doing email marketing but you have three flows set up and some campaigns and you’re also trying to manage your SMS as well and you also just built out a loyalty program but that loyalty program is integrated into your strategy. You spread too thin. With retention, the order is to get your email marketing locked down and a machine first and then add an SMS and get that integrated into your emails. Now you have email and SMS working as a machine and then you can start layering things like direct mail and repeat purchase apps. You then can layer in things like a loyalty program, a referral program, and then you can layer in quizzes. Doing too much at once is as bad as not doing it at all.

This brings us in the world of email marketing. For those of you who are not aware, Jess has put together a program like a course. It’s popular. It’s on Gumroad. It’s called DTC Flow Foundations and it’s incredible. It is a standard operation and procedures doc that you can give to your team to deploy email marketing.

I want us to speak to it because there are certain strategies. Without giving the entire thing, there are certain fundamentals you have to get right in your email strategy. Do you want to run down the essential flows? These are outside campaigns that are like Blast. The essential flows for any consumer brand or owner reading that they need to have in their email setup.

Why we built this flow guide in the first place is one of the most important principles when we talk about retention strategy is, where is the highest ROI to be found in terms of your time to effort? We talk about email marketing once we would jump to email campaigns first because they’re like, “This is what we talk about.” We got promotions, we got product launches, and we got seasonality. The truth is if you think about it, spending time on email campaigns is great but it’s slightly lower ROI in the sense that you have to build it, you send it once, and you got to keep doing it every single week.

We always say that when you’re just getting started with email marketing and you’re trying to grow your eComm brand, focus on flows first. Sit down for one week, build out all of your flows, and that’s going to be your automated revenue, and that’s why we built this D2C Flow Foundations Guide. The big flows that are covered in this guide are the most critical, your welcome flow, the browse abandonment flow, your add-to-cart flow, and your abandoned cart flow.

Those are all going to be around converting more website visitors into actual customers. You then have your post-purchase structure flow, which we’ve talked about extensively, your cross-sell flow, your replenishment flow, and as well as your win-back flow. All those flows together essentially cover every area of your customer journey to convert more traffic to first-time purchasers, nurture your first-time customers to come back, and as well as increasing your repeat purchase rate. Those are the absolute basics.

We built this flow guide for our internal team. This was built for me when I was trying to get out of the day-to-day of agency where we need to train all these email marketers on how we approach email marketing for Longplay. We couldn’t find a good email course out there that we felt was aligned with what we wanted to deliver to clients.

This was all built internally years ago. We’ve always updated and grown it since then but this was the first year that we’ve decided to release it publicly. It was coming from a place of we would have all these brands come in that were a little bit too small for an agency but we’re like, “You need these basic ones. Take a week, fill these things out, and this will set you guys up for success.”

It’s like working with a performance marketing agency that essentially scales businesses. First of all, because of their price point, they’re not necessarily attractive to startups or brands at a certain revenue threshold. They expect you to have reached a certain level of scale and then they’ll scale that success with their skill sets.

It’s the same thing here where you equip them with the fundamentals, these flows with email and SMS, and then they’re at this level where retention market is generating X amount of revenue for their brand and they can afford you and you can work and take them to the next level. I want to speak to all of them. There are eight flows. One is the welcome, the other is browse abandonment flow, add-to-cart, and then you have the abandonment cart flow, post-purchase, replenishment, cross-sell, win back, and all that. What are the first principles to incorporate in a welcome flow?

One of the foundations of this guide is most of the time when you’re googling, “How do I build a welcome flow for my D2C eComm store?” You either get two things. One is you get a list of 21 welcome flow examples to inspire the next welcome flow campaign. This isn’t super helpful. There’s so much inspo out there. The second side of it is a bunch of email templates where it’s like, “Here are the five emails up for your welcome flow.” The truth is every brand is a little bit different.

With this guide, because it was built for internal training purposes, we walk you through how to think about building a welcome flow that’s custom for your brand and also giving you some of the basic elements that should always be the welcome flow whether it’s an offer or guidelines on how a header should look and things like that. We’re thinking about building a welcome flow. The first step is to think about, what does your customer need to know about your brand in order to want to make a purchase from you? What are those core value props? We can build a welcome flow first email around that.

It could be your product quality and how it’s sourced. It could be how many influencers have used your product. What is the main thing or the main reason that a customer comes to buy from you? That should be your first welcome flow email. Then it might be, what are some common objections that customers have buying from you? Maybe it’s price. Maybe they’re worried about the quality. Maybe they’re worried about, does it work for them. Whatever those things are.

The guide walks you through, “Here are the five questions to ask yourself or your particular brand when building out your welcome flow.” Here’s how many emails should exist in your welcome flow. We say 3 to 5. Here are some basic elements you can probably incorporate into your welcome flow. It could be UGC testimonials. It could be unique value props about your product. It could be product recommendations. It’s about here are the principles and here’s a “template” but also, here’s how to think about it properly to be customized for your brand.

It’s down to putting your best foot forward and showing the benefits, social proof, and proving that you’re best at what you claim to be good at. You’re in the right place. What is the objective of the welcome flow? The first purchase? Is it to trigger a first purchase?

Your welcome flow, the sole thing is to get someone to try your product for the first time. You have an amazing product, you want to get someone willing to make that first purchase, and that might mean that they need to know the main benefit that you’re going to deliver, handle some objections, and also guide them towards selecting their first product. Especially if you’re an apparel store, for example, something with different types. Maybe they’re a little overwhelmed by what product to choose. That’s going to be the first step of the welcome flow.

How does a welcome flow differ from an AOV perspective? This is a personal problem we’re having in the sense that we have a brand that has a $150 AOV off the bat. It is what it is. We’re trying to get a more replenishable product at the $30-a-month price point to integrate that. You’re speaking to two different mindsets, two different needs. How would you craft a welcome flow for something that’s going to be regular versus something that might be once a year, biannual, or even once in two years? How would you approach it?

We always go back to the customer journey and the customer lifecycle first. As a customer, what would I need? What am I struggling with in terms of deciding to make this purchase? High AOV purchases like a mattress or whatever technology thing is typically higher AOV purchases. You’re maybe only buying once or even in the case where something might be bought 2 or 3 times in a year. Usually, your welcome flow needs to go a lot deeper into educating them about your product. You need to go a little bit more into, “Here’s how the product works. Here’s the quality. Here are the different features.” Also, how are those features going to directly benefit you?

You might have a welcome flow that goes into each of the features individually in separate emails and how it relates to what pain point it solves. You might need to do a welcome flow on different customer personas and how those customers would interact with your product because maybe people get different things out of your product. It’s a lot deeper. Whereas with lower AOV products like an apparel store, jewelry, or something like that, those ones are a lot broader.

Where customers struggle is choice fatigue. A lot of those welcome flows are going to talk a little bit less about deep diving on one particular earring. It’s going to be more about like, “Here’s how to navigate our store. Here’s how to choose jewelry based on your skin tone or your style. Here are different ways to wear our jewelry.” It’s going to be about helping to guide them toward their first purchase. That’s a super high-level example. It’s how deep do you go versus how wide you go.

This is why I like bringing you on, Jess. That was insightful. Good stuff. The browse abandonment is the creepy one. This is anecdotal obviously. It feels creepy to me. You’ve done an email capture and you don’t think too much about the email capture and you’re browsing through a few products on the collection page and bingo, you’re like, “Please come back.” Is that it in a nutshell? How should you do it well without giving the creepy vibes for browse abandonment flow, at least for Kunle?

With browse abandonment, consumers are a little bit more aware these days. Active on-site is even creepier than browse abandonment because at least browse abandonment are looking at a specific product. It’s going to depend on the type of brand in terms of do you want to go deep on something or do you want to go a little bit broader? With browse abandonment flows, it’s pretty light in terms of, “Here’s a product you were looking at.”

The first email is usually a gentle reminder. From there, they’re like, “I’ve been looking at this product but I’m not quite sure if this is what I want.” You’re recommending a few other products for them to decide on. You can start handling some objections and maybe they need more testimonials to show that customers love their product or maybe they need a little bit more of a deep dive into the product quality itself or it’s reminding them that it’s gluten-free or keto-friendly or whatever those little icons and core value props are.

With browse abandonment, we think about if you had a retail store and a customer was walking and they were scanning the store, what would be the random things a store attendant might tell that customer? It’s like, “A reminder, our products are all keto-friendly and paleo-friendly.” Maybe it’s like, “Can I help you? Is there something particular you’re looking for? Are you looking for something that’s for dry skin? Here are some product recommendations for you.” Start thinking about what the customer mindset is in their browsing and why they haven’t mentally locked on to a specific product that they’re comfortable purchasing.

What are the trigger points for setting the copy intelligence and the browser abandonment flow? Do you say, “If they have viewed this particular product, it would trigger browse abandonment flow. If it’s this other set of products, it would trigger this flow.” Is it a single browse abandonment flow that has placeholders that cater to wherever they visited.

With smaller brands, if you’re starting with getting a basic browse abandonment flow, we always say build one flow first. That’s not over complicated. Usually, it’s two emails. You’re going to use a dynamic product recommendation or product viewed block. It’s going to dynamically show the products that the customer viewed and which product pages they viewed. At Longplay, we use Show/Hide Blocks and Klaviyo which allow us to show different information for different customer segments. That’s the basics.

From there, sometimes we’ll segment off of like, “Are they a non-purchaser? Are they a returning customer?” You can segment off of the product type as well. For example, if you have a quiz on your site, you might show them different browse abandonments off of their quiz. This is a level of complexity that you get into as you go from a low 7-figure to a high-7-figure to an 8-figure to a 9-figure. These segmentations can get more complex. First, we always say set it up with 2 to 3 emails max and get these emails going out.

Get the basics out there. Why should you have an add-to-cart flow and then an abandoned cart flow? What are the key differences? Why should you have both?

This is a quirk of Shopify stores, which is what most D2C eComm brands are on now. Add-to-cart flow targets customers who add a product to cart but don’t start checkout. Whereas your abandoned cart flow only targets customers once they’ve clicked the start checkout button. They might have started entering billing details but they didn’t complete their order. We find a lot of brands missed this add-to-cart flow.

As a fashion apparel, any brand where there’s a lot of similarity between things, for example, choosing between a green t-shirt and a white t-shirt, it’s all preference. Shoppers can start using your add-to-cart as a wishlist. I know that’s how I browse when I’m shopping in apparel stores. It’s like, “I have $1,000 worth of things in my cart.” I’m just adding a bunch of things that I’m interested in and I’ll sort through what I want to buy. Without the add-to-cart flow, you’re missing out on that relatively warm buyer intent because they haven’t started checkout yet so they’re not getting your abandoned cart flows.

A key difference is the cart abandonment is to recheck out and drop off the back. I’m going to skip the post-purchase nurture flow and also the replenishment flow. It’s self-explanatory. People should buy the course, DTC Flow Foundation Guide. Do you want to speak to the objective of win-back flow and top-level first principles on setup?

With your win-back flow, these are customers who have made a purchase before, they could have made 1 purchase, they could have made 3 purchases, and they have not come back in a significant amount of time. The first thing we always say is your win-back strategy should start before you lose the customer, which means your post-purchase structure flows, your replenishment flows, and all that is a “win-back” strategy because you’re preventing yourself from losing them.

By the time they get to a win-back flow, they’ve gone through all of this stuff, and they’re still not converting off of content or value props or relationship building. Win-back-flow is a little bit more of an aggressive retention strategy where you’re typically throwing up some level of discounting and getting them to come back. From a mindset sample, we always think about, “What could get a customer to buy once, buy twice, and not come back in a significant amount of time?” It could be that they’re not seeing the benefits of the product. They switched brands. They completely forgot about your brand.

Especially with apparel companies, for example, they might have made an impulse purchase on an Instagram story and then they’ve forgotten. No one is keeping a mental track of all the brands they bought clothing from. Maybe they are interested in some products but they haven’t found ones that they loved.

Your win-back strategy is more of an aggressive discount like 20% to 25% off their next purchase. It’s going to be around guiding them toward that next purchase that makes the most sense for them. It’s going to depend on how do you want to go broad? Do you want to go deep? Custom product recommendations typically work well there as well as deep diving and like, “We were recommending this specific product for you because it helps with these particular pain points.”

It closes the loop on their CLTV and repeat purchase. We’ve covered sufficient ground on email. I want you to quickly speak to SMS, don’ts first, the must-halves, and the synchronicity between email and SMS. Let’s get started with the importance of SMS. What’s the best way to start collecting cell phone numbers?

With SMS, most brands launch SMS after they’ve launched their email marketing. The best initial way to grow your SMS list is through your email list. The first step is incorporating it into your website pop-up so the email capture pop-up that you’re going to have on your site. AB test having SMS in there. In addition to email, A-B test that because either way you do want your email address first. That’s going to be the first step.

Also, driving email subscribers over to your SMS list. You might have in your welcome flow that your email welcome flow might say, “Opt-in to our SMS list for an extra X percent off or an extra free gift.” You might also include SMS capture into your post-purchase nurture flow. You might include it in cross-sell flow, subscription upsells, and things like that. It’s about how you use your email list to drive SMS list subscribers.

Good strategies are SMS list subscribers get early access to things, you got VIP perks, additional discounts, or whatever perks will resonate most with your audience. That’s probably the most missed opportunity that we see is people treating email and SMS as two separate channels. Retention strategy is everything need to be integrated. How do you leverage your email list to build your SMS list? The second step, which is what you brought up as well, is that email SMS needs to be integrated.

With our team, we never say, “What’s your email strategy and what’s your SMS strategy?” We always say, “What’s our customer lifecycle journey? What messaging do they need to receive at what stage of the customer journey and which channel makes the most sense for them to hear that from?” Is email the best channel to deliver that information to them or is SMS the best channel to deliver that information to them? It’s similar but it’s about flipping the script back to the customer journey and the customer experience.

I like what you said with regard to what is the right channel to send the message. The first question is what is the message and then the second is where do we send the message through? The point I was trying to make, which you probably mentioned, was more around incentivizing your customer base to share their cell phone numbers, to opt-in to your SMS. You mentioned many ways. One thing I was going to ask was more around loyalty programs. Do you give them more points for opting in? Is that something you’re seeing?

Exactly. That’s why we love loyalty programs because it gives you so many more leverage to pull when it comes to incentivization. Rather than having to be like, “You get an extra 10% off.” You’re stacking discounts on discounts. You can say, “You’re going to get a bonus of 100 points,” or, “You’re going to get 2X points on your next purchase,” or, “We’re going to bump you up a tier.” You could even say, “You get to skip a level.” There are many more ways you can play around with it but loyalty program and SMS is definitely a great integrated strategy for sure.

Funny you mention it, I don’t think many brands use the benefits of their loyalty program as leverage enough as much as they should in their lifecycle marketing campaigns. There are many ways to skin proverbial cats. That’s interesting stuff. The do’s and don’ts of SMS. How often should customers want to hear from you? How often should you message them? What should you be messaging them? What shouldn’t you be sending to customers via SMS?

SMS is much more sensitive as a channel than email. I realize it’s a generic or vague way to describe it. From a frequency standpoint, it’s a little bit more sensitive. If you could get away with three emails a week, you probably can’t get away with three SMS a week. It’s usually less lower frequency than your email. With a $1 million brand, let’s say, we might say start with one SMS every two weeks. If it’s still going, maybe one SMS a week.

You typically max out two SMS per week becomes pretty aggressive. If you’re saying the number of times someone gets a text from you, obviously once you’ve layer in a lot of segmentation and things like that, you can always have a little bit more. An individual customer probably shouldn’t be receiving more than two SMS from you per week unless they are bought into your brand. Also, with SMS, there’s a lower character count so you have to be direct with your SMS.

You can’t be typing essays. There’s a little bit brandness that you can incorporate there to get to the point. Also, we have been testing using SMS to deliver more valuable content. You might do, “Three tips for your Fourth of July celebrations.” Something that’s a little bit more relevant. I’m like, “What would be a fun and useful text that you would get from a friend?” That’s dependent on specific brands. It has to be relevant for your brand or else you’re sharing random content. Those are high-level tips that we have seen work well with SMS.

In the world of direct mail, really quickly, what are your quick bullet point guidelines for direct mail? When do you bring that into the mix? It seems like you start with email SMS and then direct mail.

We usually do email, SMS, and direct mail mostly because it’s a probability of this channel working for this brand. Email marketing works for every D2C eComm brand. SMS is you got to finesse it a little bit more and then direct mail, you got to finesse it a little bit more. We always optimize what’s going to get the highest ROI the quickest and then can we build on the strategy? That’s why we do direct mail last.

With direct mail, most brands are not testing it as much as they should be. Definitely run a test. We’re not saying direct mail is going to work for every single brand. It’s going to be dependent on your demographics. With direct mail, it’s quite effective as an acquisition strategy. PostPilot and Poplar, which are our preferred platforms, both have pretty good lookalike targeting type stuff. It’s a good thing to test in small batches.

We also use it for retention and repeat customer stuff first. Targeting customers who haven’t come back in a while, who aren’t super cold but it’s probably about time for them to come back. We’ll use it to introduce new products. We’ll layer it onto a promotion or product launch. When we’re doing a product launch, it’s not just announcing the product but what’s our email strategy? When do we want to layer an SMS? Also, can we use direct mail to make sure that they’re getting hit simultaneously understanding your brand everywhere during a big promotion or during a big product launch?

We’ll also use it to get people to trial new products that they haven’t tried like cross-sell strategies. Even using things like a founder letter to build VIP loyalty as well. It’s cool if you buy from a brand and you get a handwritten letter from the founder saying thank you. Those are a few top-of-mind tests that we typically run with clients when we do direct mail.

There are many other variables. We’re going to do a full direct mail podcast around it because there are many variables to work with. Is it going to be a postcard? Are you going to send a flyer or a handwritten note from the founder? Which would work? How do you test? How do you iterate? There is devil in the detail there. Good stuff. You mentioned repeat-purchase apps. I’m thinking Tapcart for mobile apps. What are the must-have repeat purchase apps in your stack?

Tapcart, Relo, and Repeat we also really like as well. They’re quite similar. Relo has some cool stuff. Relo is a little bit better with brands that don’t necessarily have a subscription. There’s a little bit more you can still do there if you don’t have a subscription product whereas Repeat is good for brands with subscription products.

Both have a magic cart, for example, so you’re streamlining the actual purchase process. Rather than recommending additional products, you can just drive them to a cart and the cart auto-populates with cross-sell items or upselling them to a subscription. They have strategic timing-type stuff like predictive timing in terms of sending a reminder email at a time based on a customer’s purchase pattern and things like that. Those are two apps that we like. Honestly, those are the big ones.

How do quizzes help retention?

Quizzes help with retention. It helps a little bit more with acquisition in the sense of turning website visitors into first purchasers. It helps reduce choice fatigue. It helps guide the customer toward their first purchase. Those are the biggest two benefits with quizzes. It also provides additional customer data to, in the future, retain customers a little bit more. For example, with a skincare brand, you might have 25 different products or even a makeup company. Using a quiz helps narrow down and simplify that purchase process where they can just plug in, like, “Here’s my skin type. Here’s what I struggle with.’ Here are some pain points.”

You’re recommending 3 or 5 different products specifically for them. From there, you have now also collected your customer data as zero-party data. Now you know their pain points, now you know their skin types, and now you can build a post-purchase nurture strategy specific to, “Here are different skin care tips for dry skin.” Also, when you have your cross-sell strategy, you can cross-sell the products specifically for dry skin. That’s the level of depth of the quiz. One, it helps them making their first purchase, but more importantly, you’re also collecting zero-party data to customize the rest of your retention strategy for the customer.

We’ve covered a lot of ground from a perspective of retention marketing. I want to go back to email marketing and SMS and your platform, Backbone. Do you want to give a quick synopsis as to why Backbone simplifies or helps smaller eCommerce teams streamline their email marketing? You mentioned about eight essential email flows and there are many other factors to bear in mind. There are many other layers to this. In a nutshell, what value does Backbone give smaller eCommerce operations looking to operate mid-market eCommerce businesses out there? I’ll hand it over to you.

We’re super excited about Backbone. I’m excited to chat about it. With Backbone, we built it for that stage in building an eComm company where you don’t have the time and expertise to manage your email marketing. You’re a solo founder or you might have a marketing manager. Neither of you guys are experts in email marketing. You’re running a 6 or 7-figure eComm brand and you are spread thin. You’re probably putting out fires and trying to keep up every single day.

You don’t have the time to sit down and be like, “I’m going to learn about email marketing and I’m going to plan out our whole email marketing calendar.” You’re trying to keep up. You also don’t have the budget to hire an email marketing agency as we’ve talked about. There’s a certain scale where it makes sense for an agency to come in. We found that this is the most challenging and also stressful place for an eComm agency where you’re stuck.

You need email marketing to grow to be able to hire someone to do email marketing but you also don’t have the time or the expertise to do email marketing yourself. Backbone was built for that. Backbone was built around the concept of you can’t afford to spend hours a week doing email marketing. How do we shortcut this process for you?

With Backbone, you essentially can come in, and we build 5 or 6 different algorithms that are custom to how we think as an agency in building a strategy for email marketing for an eComm brand. As a brand, you can come in and plug in your brand details and you can generate an entire month’s worth of email marketing campaign ideas and flow recommendations in seconds and as well as custom email templates for each of the emails in seconds. You can pass it off to us for us to design for you.

All of our users with Backbone, the main thing has been like, “This is saving me so much headache and so much time each week because I no longer need to go learn about email marketing. I don’t need to hire an email marketer. I can run my email marketing in minutes.” You can plan out a whole month and generate all of your campaign topics and generate all of your email templates in a quick sit down. That’s what we built that for.

I was blown away when I saw the demo. You gave me a glimpse into how the platform works. I saw the email calendar planner. I saw the email layout planner. There was a flow recommendation. All the flows, when you fill in all the details of your brand in there, it recommends the flows and number of emails on there. It gives you sometimes even email campaign recommendations like ideas. The clincher for me was the fact that you could export your Figma design. You design your emails in Figma and then you import it there. From an ESP standpoint, you have support for Klaviyo. Beyond Klaviyo, what other ESPs do you integrate with?

Klaviyo and Sendlane are our top recommendations when it comes to D2C eComm. There are other ones out there. We talked about Omnisend. There’s Drip and things like that. Klaviyo and Sendlane are the ones that we feel comfortable backing in terms of quality. That’s where we would typically start. When it comes to generating ideas and things like that, with Backbone, because there are so many ESPs out there, we always say, “Backbone is not meant to be another ESP.” There are enough ESPs out there. Backbone is helping to replace the job of an email marketer.

Our vision with backbone is to essentially do to email marketing what Facebook algorithms have done for Facebook ads and media buying. In 2015, media buyers were bidding and selecting audiences and doing all the manual strategic work. Whereas now, media buyers get to focus on high-level creativity and strategy. The same thing for Backbone, we’re automating the strategic thinking and we’ve essentially taken all of our expertise as an agency and turned them into algorithms. We have a tool that can do the thinking of an email marketer for you.

I noticed you didn’t mention AI.

We are doing some AI on the backend. My perspective on AI, I could probably do another whole podcast on that. With our algorithms, we focus on our algorithms first, and then we’ll evolve it into machine learning and then we’ll evolve it into AI. Sometimes people throw an AI into tools when it’s not necessary.

I was blown away with how it replaces an email marketing executive, an email marketing manager, or what have you. You put in your brand details and the entire strategy and framework are there ready as a template for you to implement. You’re plugging into the system that set it all up for you. That would be hours, if not days of work with regard to planning. Well done on that. I believe you’re out of Beta now with Backbone.

Yes, we are out of beta. It’s always exciting to build something and have it come to life and also see users using it. Regularly, we have users who are jumping in it daily and it’s part of their workflow. We also have some users that we see jumping in for a month. They do all their work in a month in one sitting and then they come in again afterward, which is also cool to watch as well. I’m excited to continue bringing on more users and continue growing.

Great stuff, Jess. I want to thank you again for coming on the 2X eCommerce Podcast. You’re active now on Twitter. What’s your Twitter handle?

It’s new for me. My Twitter handle is @jjesschan.

It’s always a pleasure catching up with you on the pod. For those who want to find out more about Backbone, it’s GoBackbone.co. Your DTC Flow Foundation Guide and all the very rock-solid guides. For brands, they could pair up the insights from the DTC Foundations Guide and plug all those insights into the templates and the structure set up by Backbone. It’s incredible how you’ve been able to move from an agency to a SaaS solutions comp. Even with the agency, that’s for another pod. The way you’ve built it out from a business operating system itself is worth talking into so people can get insights. Jess, it’s always a pleasure to connect. Thank you.

Thank you so much for having me. This was so much fun. I feel like we covered so many topics where we’re like, “We could go down a whole rabbit hole and do another hour-long podcast on this five-second segment.”

Cheers.