POV: Your "Beautiful" Shopify Acquisition Strategy Leads to a Leaky Bucket. 😨

24:00I've been doing this for 15 years and this is the closest I've ever felt to having a full-time marketer sitting right beside me. I have a link for you in the show notes that will give you 30 % off for your first three months, or you can just use code J30 when you sign up, J-A-Y-3-0. If you're ready to migrate from Klaviyo to OmniSend like thousands of others, they will do everything for you. You just show up and all your campaigns and automations from Klaviyo will be set up and running in OmniSend, ready to go. And usually at 35 % less what you were paying Klaviyo.

24:33what is the most effective offer like between skips discounts product swaps downgrades different products if you had to pick one and i know you and the beauty of prosper stack is i know you can do all of them based off of why they're canceling but what's the most effective if you had to choose one yeah so i would say by industry it can vary on the e-com dc side probably like skipping rescheduling i kind of lumped them into one but um yeah skipping or rescheduling is just as a result of having that physical product or too much of it or just need or make them go on vacation i don't need it right now they don't want to cancel but they're just willing to delay that but as a blanket hole across all of subscription probably discounts will move the deal almost but on ddc specifically we find that like skips and pauses it pretty yeah pretty common and then there's the whole other side to cancellation where there's going to be a percentage of customers you can never save.

25:27Talk to me about how brands are using ProsperStack for that and what some of the strategies are there. I think that's definitely a benefit of a platform like we provide is on the flip side, post cancellation, you've got this treasure trove of data and it's not usually until it tends to be an afterthought for a lot of people we start talking to. But then once they've got that data collected and they've been running it for months or years and they're like, we want to go look at this and see what the heck we're seeing. And I've heard it used in all sorts of neat ways internally. We've had people that pipe it into their BI tool and kind of make it part of that.

26:01We've had customers tell us that, you know, Hey, we do a weekly all hands meeting. And every week I print out this specific report from ProsperStack and that's something we go over with C-suite. And so people are taking it seriously. They are seeing the importance of the data that we're doing, but there's just all kinds of neat stuff that you can pull out from it and break it down by cohort of your customer. If you have multiple flows because you have multiple products or whatever the case might be, you can filter it down by that way. And then by date range and compare it to previous periods. So you're looking at trend data.

26:30How are we trending on churn this year versus last year? Okay. We're seeing a spike and you can now correlate that spike and drill down and look at those subscribers that are churning. And we've had people tell us too, you've helped us surface acquisition problems through churn. So we saw an uptick in churn, we dug into it and we realized that we're acquiring all these customers from this new channel that are churning at twice a high rate as previously before, which throws kind of all their acquisition metrics out of whack. But it also showed them that there was a problem there and they have to either figure out how to acquire them cheaper through that channel or maybe abandon that channel altogether.

27:03Yeah, I often say that it's the biggest churn challenge brands have is actually acquisition. The churn is just, it's more like the, that's the result. That's the indicator. It's like when they say we have a churn problem. No, you don't have a churn problem. That's just what happens when you have bad acquisition, bad onboarding, bad product education, bad ways for customers to manage and interact. And then it just ends up in churn. I agree 100%. If you acquire people and didn't educate them properly, there just could be bad fit customers from the onset. And a lot of times we deal with brands that are like, Tony, if we can get them past the three-month mark, we know that they're going to be here for a year and a half or something like that.

27:47And so a lot of times they'll be hyper aggressive early on, but then I always warn them. I'm like, if they want to churn early, it's probably, it could be like a channel problem or it could be like an education or onboarding problem. And just because you're band-aiding it with this to get them to like another two months, make sure you're going back and fixing that underlying problem. Because all we're like, we're not saying again, what we're a band-aid magical fix for everything, but we want to surface issues that you can address in other areas of the customer lifecycle that just happened to result in cancellations, right?

28:14Right. Churn, I often say, is it's a formula of when perceived value is less than cost. An example I often use is Netflix. There is arguably billions of dollars of value in Netflix. If you added up every movie in there and if the average movie is$20 or$30, and if you were to buy everything that's available in Netflix, there's probably a billion dollars worth of content there. But I don't know what a subscription is now,$15 a month or something. But there's some people that they don't pay$15 a month, even though there's a billion dollars worth of value, because the perceived value is still less.

28:54And the reason why they don't perceive the value is maybe they don't watch Netflix for two months. And if you don't watch it, you start to think, ah, there's nothing there for me. We always work with brands. From the second, when they subscribe, you don't really actually even have a subscriber yet. I always say you have a lead and it's your job to educate them and turn them into a customer. Because usually the mindset when someone's buying a subscription is, okay, I'll try it. They probably went to buy it one time, but then they saw the subscribe and save for 20 % off. And they probably thought, okay, I'll click subscribe.

29:25And if I don't like it, I'll just cancel after the first month. And I saved 20 % of my order. That's how customers think I've done it. So they're not really a customer yet. So we think, how many new subscribers did we get today? And if a hundred people signed up, you should say we got zero. We got a hundred one-time orders that we haven't actually turned into a subscriber yet. But now our job is to educate them about the product, our company. And there's a brand, they're a subscription brand. It's actually a charity, Charity Water. And I donate on a recurring amount. I remember when I signed up for the donation, you go on their website and they talk about all the water wells they're building everywhere.

30:04And they're providing clean water to millions of people. and you're like, okay, yes, this is a good cause. I'm going to contribute$50 a month. You go through checkout. And then on the thank you page is a video from the founder saying, thank you so much for your donation. Your money helps build these wells and provide clean water to millions of people. And you're thinking, I know that's why I just bought it. I just went through all your material. But what they know is they have to continually educate people on what they're doing in the world. If I don't get email updates about new wells being built after three or four months, I'll probably cancel my donation because I go, is there any impact happening?

30:43But if I get email updates showing how many people got clean water, how many wells were built, I'll keep it forever. Right. From the second someone subscribes, there's this half life of excitement from when they click the subscribe button and they click order from then to when they get the product. You could probably email them three or four times that first day. like the second they get it two hours later and keep educating on it. But this all goes down to we could do a whole episode on that. But I know that's not the focus of this one. But I think just for those listening, cancellation management is critical.

31:13Like we have seen the massive impact it's made for brands. It's not the root of the problem, though, right? That's the but you absolutely have to have it. So on the gathering of information, learning about it, is it open ended field? Is it preselected questions? Is it like, what does that look like? What's the extent of what brands can gather? We always recommend starting with like your standard list of cancellation regions and then from there branching out. So, you know, a lot of times it could be like, hey, I didn't taste, I didn't like the product. I didn't like, it didn't work for me. Based on those responses, then you can conditionally branch out and say, okay, you selected this.

31:53I'd love to learn more if you don't mind. And that could be done through trying to get a one, one conversation. It could be done through an open-ended field. when you have a lot of cancellations, it's also hard to see all those individual data points or whatever. You know, what we actually try to do, and we'll like, it's not what we try to do. What we do for people is we actually run all open and feedback through like language processing. And we serve common words and phrases that we continually see so that you can run reports on an interval. Because if you've got, to be honest, if you've got 5 ,000, even 500 cancellations a month, like how are you going to sift through all that feedback all the time?

32:27We try to sift like kind of the noise and get the important stuff up to the top and let you see snapshots then and drill into, okay, which customer was that or which customers had said that and what's their common kind of overlapping thing. Yeah. You can do a lot with the feedback you capture within there and it can be all conditional and it could be open-ended, but it's really about having in a usable spot after the cancellation too. Yeah. So I could make it just one open-ended question with a field that's open-ended. Okay. That's what I would do. You could. Yeah. Every time I click those, I just, I pick the first one or I pick something cause I'm just, I want to get through it.

32:59And I think the metric, if you, we get a lot of results, like, but that's the wrong metric. I'd rather have fewer results, but quality data versus if I said, yeah, 80 % of people that uninstall an app give feedback, but it's not valuable. I'd rather have 10 % who care enough to type something like they were that frustrated that they'll actually type something. But it's always been the challenge of then how do you parse all that but actually now with ai that's yeah it makes it so much easier to summarize and bring up the important stuff than really reading through all the noise but any part of it goes into what's mandatory versus optional too and right if you make every field mandatory you're going to get garbage in there and if you make it optional i tend to agree with you and say you know the ones that are more intentional about the feedback they want to give or something happened that wasn't great and they really want to kind event or whatever the case might be.

33:56Like, they're going to be the ones that are typing in there. And that's quite honestly the feedback you need to see, not someone saying NA or I'm typing here because I can't proceed if I don't type of thing. Yeah. And it's just, I mean, be thankful for that feedback too, because if someone takes the time to give that, it's like gold, learn from it. Like that brand that you talked about that reads it out. What are some things that brands get wrong with cancellation flows? some things to avoid or like yeah so i think there's definitely a lot and i think a lot of them are fixed just through some of the principles we talked about earlier but um you know a lot of times we come in and people are just doing blanket offers one size fits all so you know hey everyone's going to get this same offer and we're not going to really care about anything else but by using customized flows and segmenting your customers and reacting to the feedback they're giving you like you're solving that problem inherently i think like more blanket one size fits all style That was really just the big no-no, I think, in today's day and age.

34:53And that's what a lot of times with the homegrown solution, which is great. It probably looks great in a function for that particular reason you wanted to. But then it gets abandoned because there's other priorities and whatever. And just ages there in place versus being able to something that you can easily update and change and react to new products that you've released, new changes in the market dynamics. Maybe the economy is not doing as well. You need to change things up quickly, that kind of stuff. But yeah, I would say more of a blanket one size fits all approach is the biggest problem I see from a day to day basis with cancellation flows.

35:22Makes sense. And Prosper Stack does win backs as well, too, right? We do. Yeah. So this is a separate actually we haven't talked about this all. So can you explain that? Yeah. So what we do is we have automations that are able to be set up and we call them win back campaigns, which is basically going to try to reengage a customer that has gone through with a finalized cancellation. and a lot of times that can be done many different ways, but like you could reach out to them prior to that. If they've prepaid through a certain period, you could reach out prior to that period ending and trying to reactivate them with incentives.

35:53But it gives us a way to deliver, kind of use that same engine we built in the cancellation flow area where you can segment your customers and use a trigger-based event and then send them an offer that ties into Bold in this case and automatically delivers that offer to email. They click that link and it goes and checks them out automatically restarts their subscription, right? And that can be done with a free product. It could be done with a discount incentive, whatever the case might be, or it could be done after the subscription's over, maybe 30, 60, 90 days post cancellation. You want to say, hey, we're still here.

36:26Is there a need for this product? Here's a quick little incentive to come back and give us another try. Yeah, I love, I get some very compelling win-back campaigns from brands. If I can't, actually I did cancel my green subscription because I thought it was just easier if I ordered it because I couldn't get the timing right. And then after three months or four months or something, I got an email. It was just something like, ready to get back on the healthy train the first months on us. Yeah. I'm like, heck yeah, I'm good. Yeah, I'm good for sure. Yeah. You're probably still subscribing, yeah. Yeah.

37:00Any data on how those winbacks work? What kind of conversion brands see? Yeah, great question. 60 to 70 % is your probability of selling to a past one. So as long as you're doing periodic drips to your past subscriber base, I think there's no reason why you're not hitting 40 to 50 % claim at some point along the, you know, might not be on that first take or that first email, but marketing to your past customers. I think you're like, you have cancellation flow, we can capture 40%. Well, 60 % get through that. There's a good chunk of that 60 % that just got through that can also be one back and to a customer again.

37:34And that's how I look at it for sure just knowing that they don't not want your subscription they just don't want it right now and that's the reason why a lot of people cancel so if you are good to them during the cancellation process and not making it hard to cancel i actually just i couldn't believe it the other day i canceled something and i had to at this i still happens i had to email it was actually SEMrush, which is like a tool for SEO. Yeah, we use it too. And I had a separate account just playing around with, they have a tool called Exploding Topics, which is really neat. I actually, I'm a fan of the tool and I don't mind giving a shout out of the program.

38:13It's like you can track trends and see what the next trend is going to be for certain things. Right. Cool. Yeah. And so I signed up for a 14 day trial, put in my credit card information and everything. Anyways, I didn't have time to really dive into it. Yeah. So I wanted to cancel it and I'll play around with it later. Yep. So I went to cancel and I couldn't find a cancel button anywhere. I finally clicked on the billing thing and it's to cancel it. I had to email. So then I emailed and I got an automated email and said, we've created a ticket. So I waited a day, a day later, no reply. And then three days later, I guess my trial had run up and then I got a charge from the company.

38:49It's a receipt for$49. And I was like, this is so, A, I don't have the time to be emailing to check on this email. I just emailed it back and it's like, look, if this doesn't get refunded within four hours, I'll dispute this charge. I'm going to give you the benefit of the doubt and let you correct this. They emailed back within about seven minutes. Yeah. But now if they send me an email in three months and say, hey, would you like to give it a try again for exploding topics? I would say no because of the experience I had. But had that been a better experience, I would have. I think it's so interesting you brought this idea up because there's actually a name for this.

39:25We've blogged about this before, but there's this concept called a peak end rule where peak and a psychological thing that people, so us consumers, we disproportionately remember brand and our experiences with them at the very peak of our experience. Yes. Also at the end and the end meaning the cancellation and where they dropped the ball. I mean, we're almost in 2026 here and legalities, you know, legal advice inside. You pretty much have to, if you're allowing for online signup, you pretty much have to allow for online cancellation. And yeah, there's loopholes where you can email, but who wants to do that?

40:00That's not consumer friendly anymore. But if you have that end experience and poorly, like you just said, now you're hesitant to resubscribe to them, recommend them to other people because that end experience is now disproportionately affecting regardless of if that product and those topics or whatever were like, man, he's hit it out of the park. But now you're like spoiled by this last experience you had. it. And I think it's such a fascinating psychological thing and it is totally true. And I've, so many people have talked about it before and I've experienced it. And I think it just makes total sense when you hear about it from other people.

40:34So you've blogged about that. I'll put a link to that in the show notes. That sounds interesting. Yeah. Yeah. Yeah. Peak and rule. I can throw you a link to the notes. Yeah. Anyone can be nice to someone when you're meeting them and courting them and wooing them, but it takes a real person to be nice as you're ending your relationship, right? Like how many times have you salesperson, like nicest person in the world, but then when you say no, all of a sudden you see another side of them. Oh man, I could probably, I don't, yeah, I'm probably, I'll share the story another time, but I had a really poor experience just like that with a product that we were evaluating to buy the other day.

41:09And once they found out, I won't name names, but once they found out we were going to buy, they basically said, why are we on this call? Why are we wasting, why are you wasting our time? And there goes any chance of ever, ever, ever recommend you or buy from you ever again. Jeez. Unbelievable. Yeah. I've had similar experiences. Yeah. Okay. Let's give a real quick, before we run out of time here, I mentioned at the beginning of the show, but just in case anyone missed it, we are hosting a webinar where we're going to dive deep into cancellation flows. We're going to show them up on the screen, how to set them up, the AB testing, everything.

41:41If you are listening to this and you want to learn about how cancellation flows work, there's going to be a link in the show notes register it's free it doesn't cost anything even if you can't make it still sign up because then we'll send you the recording and a lot of people listening do use bold subscriptions and so i this is not to promote bold at all i'm very usually black and white about that i this is but i'm gonna say it here because this is very specific to this and i'm excited about this that prosper stack and both subscriptions have a native connection where if you're using both subscriptions you can now turn on ProsperStack and have the best cancellation flows, I think, out there.

42:19You're the market leader as far as I'm concerned. We like to think so. Anything else you'd want to say about that or any last things you want to say to the listeners? Yeah, you know, I think for sure. I think if that all sounds interesting to you, like we'd love to dive further into this space and explore it on the webinar on December 16th. We're equally as excited about like this partnership with Bold. It's like taking it to another level with a subscription platform like yourselves. I just think you guys are really forward thinking on the importance of retention and wanting to have a top tier solution in the hands of your customers because it's only going to benefit them.

42:53It's only going to make their business healthier. And in turn, when that happens, like we're all benefiting, right? Definitely excited to see what the future holds with our partnership and helping other brands with their retention needs as well. Awesome. Tony, where can people find you? It's the website and then what social, any social platforms you're active on? Yeah, absolutely. So you'll find us ProsperStack at ProsperStack.com. I myself am pretty active on LinkedIn. So I talk a lot about retention, a lot about these ideas, concepts like peak end rules and riff about that. From time to time, you can find us, find me on LinkedIn at Tony Sternberg as well.

43:25And yeah, we'd love to interact with you there. Awesome. Tony, this has been a ton of fun. I'm looking forward to December 16th and hopefully see some of our listeners in person. And hey, listen, if you're listening to this podcast, you can ask questions during the webinar. You can ask questions during the podcast. You're probably at the gym or in the car right now, but join a podcast and you can ask Tony any question you want, because maybe I didn't ask the question you wanted me to ask him today, but you'll be able to during that webinar on 16th. So make sure you sign up for that. Tony, thank you so much.

43:51Appreciate it. Jay, it's a blast today. Looking forward to it. Okay. Now, as you know, at the end of every episode, I like to give a 1 % tip on how you can improve your store at least 1%. Now, today's going to be a little bit different because it's a video. So these often don't show on YouTube. They only play on the audio versions of our podcast on Spotify and Apple. But today I want to show you visually something, how to do something. Now, you know how much of a believer I am in the importance of treating your best customers extra special, your true fans. There's a ton of data about why this is important.

44:25They're the ones that actually go to bat for you on social media. They're your raving fans. They're your tribe. They're the ones that will promote you. They're the ones that will recommend more people. They're the ones that you can build case studies, get testimonials from. having true fans and treating them really well is really important i think most people know that now i'm such a big believer in that that's why we built our bold custom pricing app it lets you give vip pricing to your best customers you can you know gold silver bronze platinum i've talked about that before on the show but that's not what i'm talking about today i actually want to give you a different tip another way that you can treat your best customers really special this is really easy to do and it's something that every single store should do.

45:05So I'm going to actually show you right now how to do this. So if you're listening on the audio version of the podcast, I will put a link in the show notes, just a link that will just open the video and you can actually watch how I'm doing this. You might just get it from listening along or if you're on YouTube, you'll of course see it. Okay, so the 1 % tip for today is create a segment of your top 100 customers and send them a special offer this holiday season. Whenever you're watching this, it doesn't have to be for Black Friday. It can be New Year's. It can be whatever, but do something special for just your top 100 customers.

45:38And the goal is to be able to send them an email that says, you are one of our top customers. We're not kidding. We have an email. We have an offer just for you. You're in our top thousand customers, our top 100 customers. This will only work for you. You can give it to a friend. It won't work for them. We're thankful for all you've spent for us. And we've created a special offer that's more than our normal black friday offer or our new year's christmas special whatever it is okay here's how here's what we're going to do in your shopify admin uh there's a lot of different ways you can identify your top 100 customers one of the easiest ways to literally just go to your customer list and sort by amount spend shopify shows by default 50 customers per page i just click on the second page i go down and i look at what the spend is i can see here that it's around$2 ,400.

46:27So I know that my hundred customers around the$2 ,400 range. Super easy. There's other ways you can do it. Now I'm going to go to customers segments. Now I'm going to create a segment and you used to have to write queries in here, but now I can just literally write customers who have spent more than$2 ,400 and it will write the query for me. This is just a recent update and it's amazing. It makes it so easy to create segments. So here we go. I've got my segment. You can see here that there's actually 101 customers in it. I guess there was a customer that was just above the threshold. So I've got my list of my top 100 customers.

47:00Now there's a number of things I can do here. I can click on this and if I wanted, I could just come over here and I can export this. And there's a lot of things you can do with this export. You can bring it into whatever email software you're using. You can retarget them on social media. You can do all kinds of different things. I'm going to save this segment. I'm going to call it my top 100. Remember these lists are dynamic. So tomorrow, if someone spends$5 ,000, they would be in this list. It changes every day based off of that. But for now, I'm going to click here. Now, one of the things I love is you can actually sync this directly with OmniSend, who's a sponsor of the show.

47:33That's my preferred email software. So I'm gonna create a segment in OmniSend. I'm gonna click copy segment. Now, what this does is it actually syncs it live to OmniSend. Now, if I click in here, I can go in OmniSend and I can see my list here and I can create an email campaign just for those top 100 customers. This is a really, really important thing to do, to do something special for your best customers, top 100, top 500, wherever you draw the line. Now, another thing you can do is come over here and click apply discount. And so you can pick any type of discount. You can do buy one, get one, store wide sales, product sales.

48:10And the key is when I create a discount code here, I want to, of course, give them something very special. So I'm going to do 45 % off because I'm running 25 % that off on my website and we're going to apply it to a customer segment. So you can see here, I've got the customer segment, actually it pre-selects it of my top 100 customers. And so that's the segment that will, this coupon code will work for anyone else. This coupon code won't work. It will only work for customers in this segment. Now your mind's probably going, there's more things you can do with segments. Of course, there's a lot, but this is a 1 % win.

48:44This isn't a 10 % win. But this is something that is very easy to do right now. Go in your store, create this segment, and whatever time you're watching this, run a campaign just for your top 100 customers, 500 customers, whatever you want it to be. I guarantee you this will pay dividends because these are your best customers already. You want to treat them special. You want to keep them engaged. They're also probably your highest referring customers. So just more reason you want to keep them engaged. So thanks so much for watching. I know this will help. Uh, let me know your feedback when you implement it.

49:19Uh, I'm all ears. I love getting emails. I'm surprised how many emails I'm getting from, um, our listeners. I absolutely love it. I read every single one, J J A Y at Shopify 1 %.com J A Y at Shopify 1 %.com. And let me know how it worked. Let me know if you have any questions. Let me know if you came up with some other ideas and maybe I'll feature that That is a 1 % win on the next episode. And if you liked this idea, make sure you leave a review. That's the way you can say thank you. Leave a five-star review in Apple Podcasts or Spotify or wherever you listen. Give a thumbs up on YouTube, wherever you're watching right now.

49:52That's all you have to do to say thank you. And I hope it works. See you on the next episode. Thanks for watching, everyone.