Latest / Data Beats Opinion / The new retention playbook for repeat purchases

Transcript

The new retention playbook for repeat purchases · Data Beats Opinion

• 0:00
  Speaker A: Here's an interesting question. How would your business change if your success depended on whether or not people bought more than once? That error is getting closer. Customer acquisition costs are skyrocketing much faster than you can raise your prices. That means that each new customer you bring on is worth less and less. And for some businesses, they're already losing money on every new customer unless they buy a second time. In today's episode of databeats Opinion, we're diving into this wild new landscape where retention is king. Our guest is Ishita Agrawal, founder of tap. She's on a mission to transform how brands engage customers. After the purchase, we explore how to shift your customers from liking you to loving you. And how to treat your customers like members and not just customers. And why the first time someone uses your product is such an underutilized touchpoint. If you're ready to unlock a new profit lever in your business, let's start that show. Thanks for join joining us, Ish. And I'm really excited that you're here.
• 1:01
  Speaker B: Thanks so much for having me, Keith. I'm pumped to be here.
• 1:04
  Speaker A: Yeah. So for people who are tuning in, who don't, I mean, we've done the intro. They should know who you are. But give me a little bit of background about who you are. What is tap? How did you come into this?
• 1:14
  Speaker B: Great question. Yeah, my background is a little bit different than I think most people in commerce. So I started my career in consulting, very traditional consulting, like M and A, all that stuff. Learned what it felt like to be a professional in the corporate world and really got honestly enjoyed it a lot and eventually ended up in the emerging technologies team, which was truly a dream role for me. So I was doing projects ranging from things like 3D printing and drones and AR and VR and AI back when AI was simulation and not like all the LLM stuff that we're doing now and really fell in love with the space. I realized that I loved operating at the intersection of not just technology, but also incorporating elements of design and behavioral science that could create really great experiences for consumers. So I did that for a couple of years and wanted to continue to get more expertise in this intersection and ended up going to business school at Stanford and while I was there, kind of took all the design classes from the greats and met all the coolest professors and did all the fun internships like at Google X and like a bunch of cool stuff. It was truly like the best two years. But I really became more and more curious about this intersection and how all three of these disciplines really do come together to create the greatest experiences you and I probably have had when it relates to like technology and the world that we live in. And it was actually in one of our startup classes called Startup Garage. And the point of this class is like, how do you start a business? And we started with something completely different. But as we kind of were researching this other company idea that we had, I stumbled into the world of commerce. And I had never really been in E comm. I mean I'm a consumer, but outside of that I didn't really know anything about the economics or the problems or what's working, what's not working. And something I became curious about as we did a bunch of customer interviews was people kept talking about how they were really excited when they purchased from brands, but then once they bought Obran's products, they felt kind of distant from them, like there was nothing really happening in terms of the engagement. And I just became really kind of obsessed with that space of like, okay, like what does that mean? Why is there an issue there? Like, what's happening? And eventually that curiosity turned into what TAP is today, which I'm sure we'll talk a lot about, but that's kind of the journey that we went on.
• 3:51
  Speaker A: That's very cool. Yeah, it's interesting that you mentioned that because it's one of my huge pet peeves, especially with E commerce, is that once you buy the product and so many E comm brands and E comm stores and stuff, don't think about the post purchase experience. And so a lot of times it's oh well, we have a great post purchase experience. We'll send them a card on their birthday or their anniversary and like we'll send them sales information like every time we're doing a Christmas sale. And I'm like, great, just like every other E comm brand out there. And so this I and this has always been my thing is like at Segmetrics we really focus on that nurture sequence on that post purchase, on that. How do you turn customers or how do you get the data to turn customers into lifetime loyalty loyalists. Right. And this is one of the reasons I was so interested to talk with you and with Tab because that's essentially what you're doing with that going beyond the oh, we just send them a postcard every six months, right? Like, absolutely. What does it do? Like how do you. I have so many questions. I think my first is in a perfect world. What does that look like? What does tap allow E commerce brands to do to create that engagement, I think.
• 5:10
  Speaker B: Do you mind if I actually step back and explain why it's important first?
• 5:14
  Speaker A: Let's do it.
• 5:15
  Speaker B: Because I think that helps kind of frame the conversation a little bit. So when I came to commerce, the first thing I notice, honestly, immediately the first thing I do is I take a look at like, what is the tech stack that's available? Again, I come from tech, so I'm big on tech stacks and kind of like figuring out tooling. And I literally looked at a landscape of E Comm and it was very clear. Even visually you could see that when it comes to the acquisition side of the funnel, there was thousands of tools that existed for brands. And when you looked at retention, there really wasn't a lot. It's much more bare if you put it on a screen. So there's, of course, email and SMS and subscriptions kind of build a foundation of what retention looks like today. And beyond that, there's like loyalty programs, referral programs, and all this kind of stuff. But really what those are targeting is like the top 10% of your customers, right? Like you're rewarding the top 10%. Those are the people that are referring you, the people involved in your communities or the people that already really love you. But there really isn't a lot happening for the rest of your customers. Right. So this was the first thing I realized, A, that there wasn't a lot happening in retention, B, and B, that that retention was happening was for the top 10%. And again, coming from tech, that's not how we approach things. So in, in tech, everything is about retention. We're looking at onboarding flows and habit loops and MAU and dau. For example, if you're working on Instagram, you're not just looking at the top 10% of Instagram customers. You're looking at every single Instagram user and trying to figure out how to get them to engage.
• 6:47
  Speaker A: Because in tech, we live and die by retention. Because the idea is that everyone's buying month after month, and that retention and that engagement is how we continue to stay in business. If we lose that, we lose everything.
• 6:59
  Speaker B: Exactly. And I knew that from the tech world. So something I became curious about. The next thing I always kind of do when I'm thinking about some of this type of stuff is what is the economics? I was like, maybe retention doesn't matter in commerce. Maybe it truly just isn't as important. Again, I don't come from the space. I was very curious about these things. And as you know, that is not true. So LTV to CAC always kind of the key thing for any business of like, how is this going to. What is the function? How, how, how good is this, this business model for you? And the math is not mathing in E. Com anymore because CAC is as high as it's ever been. I'll give you the example. Oh, it's crazy. Like in the beauty industry, for example, the average cost of acquisition at least a couple months ago was $61. Insane. Because it's higher than the purchase price of the product. Which means that these brands are losing money. Yes. On acquiring you. If you don't buy from them again, they've literally lost money on you. At this point, I was like, okay, I feel like I've validated a couple things. Like retention is an enormous part of the math mathing for any E. Com company. In addition to that, I don't think there's anything happening in the world of retention and trying to increase the LTV side of that equation. And what is happening is only focused on a very small subset of customers. So I think a lot of these things were starting to come together and the next question was, I'd. Okay, cool. Like, here's the problem. Why does the problem exist? Like, what is happening? What are people doing? Why are they not doing more? Because I'm never one to assume that people don't know these things. People are very smart, they understand their businesses.
• 8:36
  Speaker A: So why I would often assume that they don't know these things or don't care.
• 8:42
  Speaker B: I think people are very limited by the tooling that's available to them.
• 8:46
  Speaker A: Yes.
• 8:47
  Speaker B: So again, like, looking at the ecosystem that's available, like if all you have access to is like the loyalty program that's going to reward you for buying more stuff, that's all you're going to be able to do. There is not much more that you can do beyond that. But as we dug deeper into it, we found the problem that we think is the core problem, which is that today brands are treating their customers like customers instead of treating them like members of their brand. What I mean by that is when someone's a customer, you have a transactional relationship with them. So you are sending them five emails a day. But the goal of those emails is to stay top of mind. You're throwing discount codes at them because you just want them to continue to purchase from you. But you're really not cultivating a relationship. When you're getting someone to buy from you, you're courting them. You're like, look at all this cool stuff we have and we're solving all your problems and here's all this information. But then once I buy from you, that relationship is no longer continued. You're just throwing stuff at me and hoping that I continue to come back. It's almost like the purchase is treated like the finish line instead of like the starting point of a relationship when someone's a member. What we're realizing is there's this crazy stat that in every single category today, there's six times as many brands as there were just five years ago. So you can imagine the number of the amount of competition that these brands are dealing with. So the crazy thing to me is when someone buys your product, they've chosen you, not the other 50 or 100 brands they could have purchased from. Which tells me that, yes, your product has to be good. I think a lot of brands today rely on their product being fantastic. And yes, product has to be good. But that's almost like table stakes at this point. Like your product has to work. But really why they're buying is there's something about your brand that they're resonating with. I think the brand really matters. The ethos, the mission. There's something about it that matters. So why is it today that instead of inviting you as being like, hey, you've purchased from us, you now have access to this membership experience that is only exclusive to people that are purchasing from us. Why is it that I'm just speaking at you, I'm throwing emails and SMS and discounts at you, and I'm not inviting you to engage with me in any way, shape or form. So that was kind of what we discovered as like, okay, the problem is our retention is. But really the problem is that, like, brands don't have a way to make customers feel special and continue that relationship. So that's all well and good, but now getting to your question, what is the solution? Like, how do you fix something like that? What do we do about it? So what we do is we also know that brands are very busy and, like, don't have a lot of time and resources to be spending on new stuff and keeping things, keeping up with a lot of stuff. So we take content that brands already have. So they have tons of content in their social media, email campaigns, ad campaigns, websites, et cetera. We run it through a bunch of AI models that go out and understand what is your brand, what problems are you trying to solve, who are your customers, what are the journeys that they need to go on to get to where they need to be and what gets outputted on the other end is a web based interactive hub of a bunch of challenges. So we turn those images and videos into tutorials and games and quizzes and polls and community modules that people can actively engage with. And basically we wrap all of that in a programmatic experience. So what that means is if we know, for example, you're a supplement brand and people need to stay consistent with using your product for 90 days to even start to see any benefit from it, you're going to get a 90 day program which every 30 days there's a new set of challenges for you to complete. So you go through and you complete the polls and games and quizzes. They're meant to help you get more out of the product. They're fun, they're delightful. It's more of an interesting way to engage. You get points for doing that. Those points can be redeemed for rewards as long as you continue to stay subscribed or continue to purchase from the brand. But now you've kind of created a program for the customer to follow instead of it just kind of being random communications after you buy. So that's kind of what the tap experience is. It's this like interactive way to help communicate with customers in a way that feels much more fun than what emails and SMS are able to do.
• 13:06
  Speaker A: And it's interesting because I've seen strategies like, not for E comm but for info products and stuff like this in the past where you give people access to a free course or some sort of free, like some sort of membership thing. That's a, that's a community welcome. That's a thank you for signing up. That's not, it's not a PDF, it's not something small, but it's also not something overwhelming. And people love them. They, they absolutely. There is this, I, there's this psychological trigger that goes off when you get something like that. That's not a PDF, that's not a mailing thing that, something valuable like that, that's all this information, that's this, that, that builds this community. I think that there's, there's something that triggers, that then ingratiates yourself to the brand. Almost kind of like the parasocial relationships we see on like YouTube and social media and stuff. But it's that same thing. It's that give and take, that quid pro quo quo kind of thing of I receive something now I have a better feeling towards you. Totally, so completely. See how it, how it fits into that. What type of results have you seen from this type of thing? Because it seems like, I think a lot of people probably listening are kind of like, well that sounds great, but how do you get people into it? It's just another email. What's the attraction rate? I guess the acquisition rate, what's the retention rate and how does that translate to sales at the back end?
• 14:31
  Speaker B: Great question. So I guess there's a couple different parts of our funnel that we look at. And the first is how many people are engaging, then how many people engaging actively and are earning the rewards and then how many people stay engaged or subscribed or are buying more, et cetera. So on the first piece of that, how many people engage? We have a couple of different ways for customers to enter into the experience. And we talk about it from simplest to most effective. The simplest is through email and SMS because brands are already doing a lot with that. So we can easily plug it into klaviyo, et cetera. The funny thing is that we tried to stay away from email and SMS for a long time because I was like, I'm not a believer in email and SMS in this industry. Like I think it needs to go away, like goodbye email. But so current CTRs are around like 3ish percent I would say for like normal E comm emails that are being sent out. Our emails focus very much on the program. Right. So it's like hey, like here's this experience, like here's what you can get, the rewards you can earn, et cetera. And our engagement rates just through email are around 20%. So that was shocking for us as well because I was not a believer in email but. And for a long time I was like, nope, guys, like we're not doing email. Wrong decision. Like it, it ended up working pretty well.
• 15:52
  Speaker A: And it was the data that showed you that. Right. And that, and this is for me it's kind of obvious because I come from that creator and that info product backend where our email rates are 25 to 50%. Like that's how, that's how these creators connect with their users. But, and that's always the divide I see between E commerce and kind of the creator workspace or the those audiences is that E comm is very like you're saying, very focused on that front end. And because their emails get 2 to 3% because they're all sales, they don't think that there's value in that backup funnel. But what you're showing is that there definitely is.
• 16:29
  Speaker B: Yeah.
• 16:30
  Speaker A: And 50% is like, I love Your face right there.
• 16:33
  Speaker B: I was like, whoa, I had no idea that people were looking at emails. So that was already kind. And that was just with email. We have even better rates with sms, but it's variable depending on the brand. So we don't talk about those metrics as much just because it's so different brand to brand. And then the most effective is actually why the company's called tap. So we believe in a future where you're actually coupling the software experience with the brand product experience. So I'm sure you've seen QR codes on packaging. Well, they're not effective. They have scan rates of like 1 to 2% for a lot of different reasons. But again, because I come from like an emerging technology background, I am a big believer in NFC tags. So I don't know if you're familiar with that technology at all. For anyone that's not. It's like Apple Pay. So there are these little stickers that can go anywhere on your packaging. So it basically allows you to use your phone. I have my water bottle near me, but you can literally just tap on it and then it launches this whole web based experience that we discussed.
• 17:36
  Speaker A: And I do want to mention here because I think a lot of people who haven't used NFC tags in the past and stuff, they're like, oh, it would be so expensive. You can buy like a thousand of them for like a dollar. Like they are maybe not that cheap, but they are super cheap and they're programmable, they're, they're very cool things. It's very cool technology.
• 17:53
  Speaker B: And they're stickers, right? So like it's very easy to put on your packaging. They're not ugly like QR codes because you can print anything on top of them. Lot of value. And we have some brands that have used us for that. And the TAP rates on these are about 40% so way higher than QR codes. And I think the interesting thing that unlocks for us is omnichannel because when brands are selling in retail, and by the way, 90% of commerce in the US is not done through a brand's website, meaning brands don't know who 90% of their customers are, even let alone trying to have a relationship with them, this I think unlocks this really interesting space where you can start to create that brand relationship even when you don't know who that customer is. So we always say simplest email, most effective, the tags. And depending on the brand and their complexity of their supply chain and whatever, our goal is to move everyone into the Taco experience at some point. But we realized at some point this year in our like all our pivots and positioning that like maybe the tags were something that we need to work towards rather than it be like a core part of our selling proposition. So that's kind of. Our acquisition of like email actually ends up working way better than expected tags. Even better. And then of course you can have like inserts and stuff like that. So there's lots of different ways to get into it. Brands want to put us on their websites and stuff like that. They can because we're a web app. But we actually think that post purchase deserves a separate space. Like your website is meant to buy stuff. This is meant to be a space for engagement. And I think those are kind of two different things that you don't need to muddy up with each other. But again, a brand can do what they want. It's their experience. So there's lots of ways that people get in. And then in terms of how many people are actively engaging within the experience, it's actively around 20 to 30% of people complete everything. So like we'll have like, let's say,
• 19:54
  Speaker A: wow, that's, that's impressive.
• 19:56
  Speaker B: And let's say there's like, I don't know the number I was talking about. There might be like 13 to 14 modules that they're completing now. They're quick. Like, don't get me wrong, they're not like spending like hours on here, but like they are completing the quizzes and the community modules and the games and the tutorials. And beyond the engagement, the brand is getting zero and first party data they've never had access to before. And it's simple things like, for example, again, coming from the world of tech, like it's crazy to me how much data brands don't have access to.
• 20:29
  Speaker A: Oh yeah.
• 20:31
  Speaker B: And I feel I'm like, wow. Like this is like, I want to give you this data as simple as like, why did you buy this product? Like, what problem are you trying to solve?
• 20:40
  Speaker A: They don't get what problem are you trying to solve? Exactly.
• 20:42
  Speaker B: Yeah, they have no idea. But we make it fun. So it's like, take this fun little poll and you can see what other people answered. But really at the end of the day, the brand is getting data on why are people buying this product. And then they can segment their communications and all that stuff from there too. So it's a really core part, the engagement. We focus a lot on how many people. Our North Star metric is the number of points earned versus the number of points available total for the number of people that are in there. And we want to make that as close to 100% ratio as possible. Like one to one ratio as possible. Still on that journey, I think there's ways to make it better, but it's a good starting point.
• 21:24
  Speaker A: And then all this data, are you then using that data to communicate within tap? Are you pushing that back to Klaviyo? Is that something that then they put into their mail sequences? What does that all look like?
• 21:36
  Speaker B: All of the above. So at the end of the day, the data is the brand's data. Right. So we're not going to gate it in the way that Meta or some of these other companies companies do. So it goes to Klaviyo. It's your data to own and you can do whatever you want with it. In addition to that, one of the things we realized is brands are really busy. Like they have a lot that they're focused on. They're doing a lot of different things. So it's hard for them to find time to even know what to do with this much data. So the TAP experience actually personalizes over time. So as we learn, like, okay, Keith bought this product because he's trying to solve problem A and Ish brought about this product because she's trying to solve problem B. And by the way, Keith loves soccer and Ish loves reading. I'm just making stuff up. So the type of content that we should see in here and the types of challenges and like the framing of those challenges should be relevant to us. Otherwise they feel really generic. So that's kind of the path we're on right now creating. We have pieces of this personalization, but we kind of wanted to feel like Instagram in the sense of like you feel like it just knows you. It's like, oh, like you're giving me stuff and I'm competing in challenges and whatever that feel really relevant to me. So I'm continuing to be more engaged. So we kind of use both of those things to create a better experience.
• 22:55
  Speaker A: And this is a drum I beat all the time, which is that personalization in marketing, like everyone has, Ramit Sethi always said, the special snowflake syndrome, which is everyone thinks that their unique situation is completely unique and doesn't relate to anyone else out there. And the main part of sales is overcoming those objections and being able to say, oh, you're a 40 year old school mom in Kansas, this product's for you. Because this other 40 year old school marm in Kansas got Success with it. And it's all about understanding what problems people are trying to overcome, how they're trying to overcome it, then their objections, and then presenting that in such a way that's a natural way that leads to the next purchase.
• 23:39
  Speaker B: Exactly.
• 23:40
  Speaker A: It's amazing. That's amazing.
• 23:41
  Speaker B: Exactly. And I think it seems like a small thing, but I think sometimes where a lot of companies go wrong is what's a good example of this? When I'm building a website, you've made it very easy for me to build a website, but it's so much work. It truly is so much work to create a great website.
• 24:03
  Speaker A: As many drag and drops as you have, as much AI as there is, it's still a lot of work.
• 24:07
  Speaker B: And it's so much like the weekend that I had to build our website website, I was just, like, in such a bad mood and I was like, it's just so much work to, like, figure out how to do this. And, like, little things are always going. There's too much functionality and not enough functionality and all this stuff. So what we thought a lot about with TAP is like, how do we make this in a way that it feels seamless for the brand? Like, they're. They're not going to have the resources and time. We're creating this new category. They don't have, like, time and budget put into doing something like this. So, like, they understand it's important, but they'll only do it if we make it. Almost like, hey, like, you don't have to do anything. Like, it's very easy for you to get this up and running, which is why we've built this whole, like, almost like a White glove service. But like, a lot of. From our end, that White Glove service is AI to, like, get us to be able to do as much as we can in the timeframe that we promise. And I think that's a really core component. It plays into the personalization as well. Right. Because if I give you all the data, I'm like, here's all the data. You can personalize however you want. We're now relying on the brand to find the time and resources when they're
• 25:13
  Speaker A: like, do the work, rewrite the copy, and then you come to them and say, here's your different avatars that we've identified through all the data and the personalization. Now write eight copies of all your pieces of copy. Because we have to have it. Yeah. No, that's where. That's where AI shines. Right? Exactly. Whatever you believe about AI taking existing content and turning it into something else is where it shines. 100%.
• 25:35
  Speaker B: Absolutely. Exactly. Which is like why we want the tap experience to self personalize. Right. So like the brand doesn't have to do a lot, but it feels tailored. The special snowflake syndrome. I like that term. I think that's what we're trying to make people feel where it's like, okay, I'm engaging with this brand and I feel like they know me, like they understand the problem I'm having and they want to help me through it and they're trying to give me like all this fun content but also relevant content and functional and makes me like it makes it emotional and like all the stuff that it's forming. And I think that's what we're trying to work towards.
• 26:11
  Speaker A: It's one thing that we realized early on at psychmetrics as well. So we started this. So we ran an agency for a number of years doing conversion rate optimization. This is psychmetrics was really the tool to be able to do that data. And we were like, we're going to have a tool, people are going to come in and use it and we'll have support, but no services, no agency on top of it. And that was a mistake because it really is. People like you're saying they need this, they know they need it, they know they should have it in their business, but they don't have the time, the effort or even really the know how. If you go to some of these E commerce brands and say, hey, you need a backend engagement platform that questions people, that brings them in, that really engages and gives them all this fun stuff to do, they're going to have like a bunch of like drag and drop quizzes and stuff and not even know how to do that. Right. They don't have the knowledge set to be able to implement that. And that's where I think TAP really comes in with that and is able to say, you know you need it, we know you need it. Here's how we string it all together into a package for you.
• 27:14
  Speaker B: I think at the end of the day it's all about experience. Right? So exactly. The end user experience for sure. But also like your customer is the brand, so how do you make their experience great?
• 27:23
  Speaker A: Exactly. And I want to talk a little bit about, okay, so we've talked about why it's important to keep engagement, why it's important to keep the brand top of mind, how to do that in an organic way that's very personalized through something like that. How does this then translate to sales? Is it top of mind? Is it something more? Is it something educational? Like, even in just your perfect world, what do you see as kind of that next engagement step from, okay, now I'm a part of this community to let me buy all the things.
• 27:57
  Speaker B: So the way that it's structured is every. There's different cadences for different brands. But just for the sake of simplicity, let's say that we're talking about a supplement brand that has a bunch of subscribers, right? So like, let's just keep it simple. So the idea here would be that every month there's a fresh set of challenges that people need to complete. And again, it's kind of following the customer's journey. They're getting relevant stuff for them, like month one looks different than month three, et cetera. And as you complete these challenges, you're earning points and those points can be redeemed for rewards. And those rewards, we always say, like, hey, don't make it a discount code. No one cares about discount codes anymore. Make it merch, make it stuff they can't buy. Like, make it something that's like, hey, you can only earn this if you engage with us in like these meaningful ways. And if you do that, you get it with your next purchase. So that's how we're incentivizing people, the retention piece of it, right? Like, yes, you're getting a bunch of data and that's great. But really you're earning these rewards that you're excited about, but you can only get it with your next purchase.
• 29:05
  Speaker A: So this taps into something. I think it's very, that's a very visceral thing. Like the. Do you know Nintendo Club by any chance? Yeah. So Nintendo Club. I thought it was only in Japan. I think maybe it's worldwide now.
• 29:17
  Speaker B: But anyways, my cousin is very big into like video games, so I know all these random things about that one world.
• 29:23
  Speaker A: Awesome. So when you, whenever you buy a product from Nintendo and you have a number of points and you used to have a little barcode or something like that, and you register to your Nintendo account, blah, blah, you get points. Very common. Yeah, but just like you're saying, everything in that Nintendo Club store is only available in the Nintendo Club store. And it can be small things. It's like I have a Goomba handkerchief. I have like a clear file with I think Zelda on it. But then I also have a. What was it? I had a super Famicom branded Wii controller. And they only released it. Yeah, they only Released it through the Nintendo Club store. They also did a special release of legend of Zelda 1 and 2 on the Gamecube way back in the day. Also only available through the store. So they had these things that. And people. It was so funny because you'd buy a used game and people would always take the code out. Like that was the number one thing. Everyone wanted the code because you could get these things you can't get anywhere else. And it did build a community. It built a. I want to buy these games and I don't want to buy them used. I want to buy them new so that I get that code so I can get more points so that I can get something off the Nintendo Club store. So I think I love that man. That it's. And that brought back some core memories for me, you mentioning that.
• 30:45
  Speaker B: No, it's true. I give a very different category, but similar example. There's a workout here in New York and in some like I think big cities in the US Called Solidcore. Are you familiar with them at all?
• 30:58
  Speaker A: I think I've heard of them. Yeah.
• 30:59
  Speaker B: It's like this like Pilates meets hiit. Like it's. It's. It's a crazy workout. But I. They do this thing every holiday season called the Solidays, which is basically in a period of two weeks. I think you have to go to 10 classes, which is basically like all week. You have to keep going to Solid core, which is kind of figuring like it's a lot. That's a lot of Solid core in a period of two weeks and you're paying full price for like every class. There's not like any crazy discount or something that they're giving you. All you get if you accomplish that is a hoodie at the end of it that you cannot buy. So like you. There's no place for you to go purchase it. You can only earn it if you basically like kill yourself doing this for two weeks. And I have not been able to book a class in the. In these two weeks. Like and the wait list is full. And the wait list for the wait list is full. Like it's crazy how much people love exclusive stuff that they cannot get unless they earn it.
• 32:03
  Speaker A: It's interesting because when, you know, when we talk about. I'm trying to think of how to phrase this. When we talk to E commerce brands and when we talk to people about like post purchase experiences and stuff, I think people don't realize the breadth and the amount of fervor that goes into some of these things. Like the like the Solidase, which by the way, great naming and like the, the Nintendo Club and stuff like this. I think people think of it like, oh, it's just a content place. It's just a. It's just this. It's like more emails and I, I was just talking with, with someone and they were mentioning that more than data, more than ideas and explanations, people really respond to these stories and the solid a story and the Nintendo Club story and like these things are like these are tangible things that people get, get super excited about and they're not that hard. Right. That's. And I think that's the magic. So when someone thinks about, oh my per. My post purchase content experience and all this and they're. And they're thinking like, well, what does that look like? It doesn't have to be this crazy thing. It just needs something to leverage it. Something like tap and then something to pull that data in and to really understand your customer base. But that's. Yeah. Yeah.
• 33:25
  Speaker B: Tough thing to do when you don't have the tools for it. It's hard to do.
• 33:28
  Speaker A: Yeah, it's hard to do. And I think that people overthink it as well and people just go crazy over a sweat. Like something as simple as a sweatshirt. Man. We give out yeti tumblers that have our logo and data beats opinion written on them. People love them. Absolutely. Like, I've had mine just hanging around and people are like, where can I get those? And I just have a giant sack of them that I give out like samples. Like a weird yeti Santa Claus, but so good. It's crazy. Like, yeah, people love them. I have, I don't just going off on ransomware. I have a, an Apple sweatshirt that you can only buy at the Apple store. Inside Apples.
• 34:08
  Speaker B: Yeah.
• 34:08
  Speaker A: And like, it's such a stupid thing. Like I went there with a friend who worked at Apple and I bought the sweatshirt. But it's like, I really like this. Knowing that you can't get this sweatshirt anywhere else is really cool. It's fun.
• 34:20
  Speaker B: Like for sure, for sure. And I think like, for example, one of the brands we work with is a Nootropics brand, which basically helps people focus, etc. And one of their first prizes is a hat that says thinking Cap. And I'm like, it's just so good, you know, like, it just is. It just so it needs to be on brand. It's fun for people. Like, you're right. It doesn't take a lot, but it does have to be, I think, like, where a lot of brands go wrong is, yes, there is discounts and stuff, but now the new cool thing I think is milestone rewards. So it's like if you make five purchases, then we'll give you a cool reward with it. And I do like the concept behind it, but I think where it falls short is people are not surprised or delighted by it anymore.
• 35:08
  Speaker A: Right.
• 35:09
  Speaker B: Like, they feel like they deserve it. Right. So, like. And it's fair. Right? Like when I'm subscribing and you're giving, telling me like every two months you're going to get this reward, it just feels like part of whatever I've purchased. Like, it doesn't feel like something extra that you're giving me as a consumer. It feels like it's already priced into whatever the price of the subscription is or the product is, whatever. And what we found is it's the same thing because at the end of the day you're just like rewarding people for continuing to buy from you. But they have to earn. Makes a huge difference. It actually then makes them feel excited because they're like, oh, I earned this. Like, this is something that not everyone else got, only the people that earned it got.
• 35:50
  Speaker A: Well, it's kind of like the IKEA effect, which is something that you work for, you are much more attuned to. Right. So there's something about putting together the furniture yourself that you like that a lot more than something you just bought and brought into the house. So, like, one of the things that I think is interesting here is that. So do you know the number? What is the percentage of E commerce that happens on Amazon versus off Amazon?
• 36:17
  Speaker B: It's gotta be like, I think, okay, I looked at these numbers a year ago, so they might be different now, but back then it was 40% of e. Com is done through Amazon as a large percent. Yeah.
• 36:31
  Speaker A: So that means that. So Amazon is notoriously a black box. Right. And so this seems like a way that you can then connect with your customers outside of that black box where you're no longer part of a fulfillment machine. You are still able to keep your branding and to keep your experience even through a mass market channel like Amazon or Walmart or something where you don't get that experience.
• 36:58
  Speaker B: Yeah, absolutely. And I think, I think there's a huge opportunity there as well. And then just to clarify, the 40% is just in E Com. So not physical Vita.
• 37:07
  Speaker A: Yeah, not physical. Just E Comm.
• 37:08
  Speaker B: Yeah, just E Com. And actually that's where Tap started. Like, the problem we wanted to solve was this crazy number like hey, 90% of commerce is done not on your website. Meaning you don't know who these people are, which is why we came up with the tags and we're like, doing all this cool stuff that we think the world should work towards. And there is, like a huge opportunity there, right? Because when I'm buying you in Amazon, like, there is no relationship I have with you. And again, to go back to the statistic of there's six times as many brands in every category. So if you're emailing me five times a day, they're also emailing me five times a day,. Trying to get my attention and give me discounts and incentivize me to steal me away from you into whatever their platform is. So I think a big part of what we want to create is this, like, gravitational pull into the brand. And yes, like, I think part of it could be like, hey, here's a reason that you should shop in dtc. Because we have this whole experience, but ideally for us at some point, like, this is your brand experience. Like, I think it's kind of wild today that a brand's website is really where the brand lives, right? Like, the brand, if you were to put it like in one place, it's on your website. And I think websites are kind of old school. Like, I don't enjoy being on websites. Like, I really don't.
• 38:30
  Speaker A: Like, it's not especially brand websites. Yeah, no, it's.
• 38:33
  Speaker B: They're. They're bunked for shopping, which is great. Like, when I'm trying to shop, it's great. But like, I think because brands have a very limited set of platforms where they can bring their brand to, like, they have social media and like, yes, that's great. But how many people are following you on socials and are seeing you? Probably not as many as you would like and your website, but outside of that, like, what do you really have where you can bring your brand to life? So one of the things we hear a lot from our customers that they're really excited about, they're like, whoa. Ish. Your team just brought our brand to life. I see it on this page. That's so cool. I can engage with the brand and I've never seen that before. We've never been able to help customers actually like, feel like they're engaging with our brand in any way for everything. They're just consuming or like buying from us, but that's it.
• 39:25
  Speaker A: I think there was a. There was a quote by Bain Co. That I was just looking it up because I love this quote, it says an increase in customer retention rates of 5% increases profits by 25 to 95%. And so it doesn't take much to really boost that. People who love you, they really love you and they will continue to buy from you. And like I think anyone who doesn't think that way should just go onto a subreddit for any brand, any brand that you can think of and just look at these, this super passionate group of people who are just like constantly talking about these products and constantly. And these are the people that you really want to touch, to find and to look for and to cultivate. So it isn't just an email, it is something more for them.
• 40:11
  Speaker B: Yeah. I would take it even one step beyond that because I think those people will always buy from you. Right. Like the, the point here is like how do you increase LTV and.
• 40:21
  Speaker A: Across the board.
• 40:22
  Speaker B: Across the board, yeah. And it's like, it's great because these people love you. They're obsessed and like of course we like them too but like really what we want tap to do and what we're building towards is the middle 30 to 40%. Right. So like the people that like you because they bought from you from the at some point but they don't love you yet. They're not the people in the subreddits like talking about all this crazy stuff.
• 40:45
  Speaker A: Right.
• 40:45
  Speaker B: But how can we nudge them from liking you to loving you? Like how do you, how do you,
• 40:50
  Speaker A: how do you up level them to someone who is just a fanatic about
• 40:54
  Speaker B: so excited about you? Yeah. And I think that's where a lot of the tools that exist today fall short because they're focused on just the top 10%. But what about like the, the low hanging fruit of the 30 to 40 that you could probably nudge up there? Maybe you make that 10, 20%, maybe you make it 30%, who knows? But that's kind of what we're hoping to like be able to enable brands to do over time.
• 41:17
  Speaker A: So I want to have, I have one kind of final kind of collecting question that I want to ask which is other than people e commerce brands not doing nurture on the back end and doing nothing on the back end, which you talked about, what is the other biggest mistake you see direct to consumer brands making that they constantly make fam.
• 41:36
  Speaker B: We've talked about so many of them.
• 41:38
  Speaker A: I know there's so many problems e comm
• 41:44
  Speaker B: but I really think it's not the brand's fault. I really think it's, it's not it's the tooling. Yeah, the tooling just doesn't exist. So, like, you can't expect them to create a company for themselves to do it. And some people do. I think the biggest mistake that brands make is that they, I think they think their customers don't care about them. And then, like, I think they think that customers want to have a transactional relationship with them, right? Like, they think that the thing is that's going to incentivize me is take 60% off. Because in the world of acquisition, that works beautifully, right? Like, you give me 60% off for sure, I'm going to try the product. Like, that's cool. But once I've already bought it once, like, that discount is not going to make me fall in love with your brand. What's going to make me fall in love with your brand is, hey, what you do know for sure when I buy your product is that I'm trying to solve a problem, right? Like, whatever your product is trying to do, like, there's a problem that it's trying to solve. There might be two or three. But you're the world of like, what I'm trying to solve for, you know. So, like, why do you assume that I don't care? Like, I do care. Like, I'm trying to solve a problem. So become the place I can go to that I can trust to get everything that I want that I could ever need about that problem, right? Like, you are the expert and there's so much misinformation out there. Like, I'll give the example of like, magnesium, right? Like this hot, sexy product. I like, hear about it all day on TikTok. But, like, once I've bought from you, magnesium brand, like, become the, my source of truth. Like, become the place I go to to like, know more, educate me, make it fun, like, make it interactive. But, like, help me engage with this problem in a way where I feel better walking away from it. So you assuming that I don't care, I think is a mistake. Like, I do care. Like, I've spent money, I've, like spent my cash to buy this product and solve this problem. But you're just assuming that the discount is what's going to incentivize me, which doesn't make sense.
• 44:01
  Speaker A: I fully agree with this and I think that it is. I think there's a societal view that the consumer is very fickle, right? And that they'll go wherever the pricing is or whatever it is. But I think you're exactly right at the top end, it's not fickleness, it's not understanding. It's not. There's so many choices out there and we have a lack of curation at this point where product A is the same as product B, as product C, as product D when I'm first looking at it. But once I've made a decision on that, my fickleness is now gone. Right? Because I've made a decision. So now I don't. I'm probably not going to jump ship to another product, a similar product unless there's a problem. But what I am looking for is more information on how to use this product better. I think Weber grills did a great job of this. They release a Weber cookbook and all it is is how to use your Weber grill to the best of its ability. It's just because they know the more someone is grilling and the more someone is using that Weber grill. Oh, now I want a rotisserie and now I want new brushes and now I need this and now I want a smoker. And like you just up level through that experience and that I made the decision to get the Weber. I'm, I'm in the Weber ecosystem now. So now teach me how to use and, and you were talking about how this is in tech. It's the exact same thing in tech. When I sign up for a piece of software, I've made the decision I'm in. I want you to teach me how to use this software so that I'm getting the most out of it. We signed up for bug tracking, project tracking software and I just, I wanted to get on a call with the salespeople and I just want to know what is the best way to. I've already made the decision. I'm using the software. What's the best way to use this software so that we can be productive and we've been using the software for six plus years at this point. Right. So that's like you're saying in it, in tech this is obvious, but it's not. It's the same thing when you're dealing with a physical brand and people don't. It doesn't grok to them so totally.
• 46:15
  Speaker B: And with your Weber example, I was just thinking like, wouldn't it be so cool if they were putting out challenges every like, like month? It doesn't have to be all the time thrilling. Which you're like, yeah, like this is the grill challenge of the month and upload a picture or video of you doing it with your family and friends. And now it's like cool. Like, this is the community. These are all the people that chose Weber and not all the other girls I could have picked from. And now I feel like I'm a part of something and it really doesn't take a lot to do that.
• 46:42
  Speaker A: It doesn't take a lot. And here, here's the interest. So I don't know if you're on Reddit or anything, but on this has been trending on the top of Reddit for like 2 months. At this point. There is a person that's just cutting up chives. They are cutting up chives and they're asking Reddit to approve or disapprove of their quality of cutting up the chives. And they're up to like day 70 at this point, every day.
• 47:03
  Speaker B: That's so cool.
• 47:04
  Speaker A: They cut up a bunch of chives and take a picture. It is at the top of Reddit. Like if you log out of Reddit, go just as a regular user, it's at the top of the freaking Reddit every time he posts. It's crazy, but this is, it's something like that. It's just showing what you're doing. It's, it's. People love talking about themselves and to then tie that together with the brand, like, yeah, yeah.
• 47:29
  Speaker B: Makes a lot of sense. Makes a lot of sense.
• 47:32
  Speaker A: Ish, thank you so much. This has been absolutely a wonderful conversation. I've loved going into this. I love, I love that you're doing something about backend and nurturing an e comm because it frustrates me so much that people don't focus on really warms the cockles of my cold dead heart. Where can people find you on the Internet?
• 47:53
  Speaker B: You can always go to our website that I know I painstakingly made over all weekend, TheTap IE. So TheTapp IO you can email me ish TheTap IO and can definitely find me on LinkedIn.
• 48:07
  Speaker A: Awesome. Ish. Thank you so much for your time.
• 48:09
  Speaker B: Thank you so much, Keith. This was so fun. Really appreciate you having me.
• 48:12
  Speaker A: Definitely. All right, talk soon. Cheers.
• 48:14
  Speaker B: Talk to you later.
• 48:14
  Speaker A: Bye.