RETENTION GURU, Jimmy Kim "How to Turn Your Shopify List Into a Profit Machine"

23:24It's never going to make you money. Most of the time you're spending it on everything from ads, the inventory, the purchase, everything that comes into place. But retention is when you actually make money. Yet it's the most unsexy of the topics because, well, who wants a, who want, what do you want, a new customer? Or do you want someone who's already bought from you? And the reality is people want new customers because it feels good on the top line. So, you know, I don't intentionally do it, but I think after 17 years, it just flows in my mind all the time. And it's just something I've realized.

23:53And every day I talk about it, it feels like everybody's learning still constantly. And I realized that the lack of education that's in this market. And so for me, I like to talk about it because I believe that I'm helping the people realize that it's really important. And, you know, when we go through a rough patch, it's like we've been over the last maybe 60 days with everything going on in this world, you know, I believe that people leaned into retention real fast because they immediately said, well, what do I do? I need to go tap into my normal customers. And they always come back to it because they realize that it's important.

24:21And that's when it becomes even more popular. And then of course the good times will roll, meta will open up, people will start using things and they'll go back over to acquisition. But to me, I just have a big love for everything that comes into email from the way that psychologically it's written, the copywriting around it, the design, the way the cadence is, every little piece of that, there's an art and a science behind it. And I would say that just when you go do it for so long and you've made so much money with email, you realize the power behind it. And when you can understand and really embrace it, it becomes a part of you.

24:54And so I kind of sit there and I know a lot of other stuff, Jay, but like I end up being pigeonholed in that. And I'm not upset about that. I think that it's a good thing to think about it like that. And, you know, we all have to have our expertise is in life and i'm a good generalist in a lot of things but i will say in retention that's where my expertise lies yeah i am with you 100 man i i did a i think it was 22 were you at some summit in orlando no i was not that one okay anyways i had a talk called the subscription death curve and like when one of the things we notice like with almost we have a subscription app and when almost every brand, like it's like over 90%, I don't know exactly, it's like 93 % of them, they grow, they grow, and then they eventually flatline.

25:37They get to a point where they're acquiring as many new customers as they're churning every month. And that might happen at a hundred customers, that might happen at 10 ,000, but eventually you get to a point where, you know, if you can only pay meta for so many new customers a month and a thousand customers a month, well, if you have 10 % churn at a hundred thousand customers, you're going to flatline. It always happens no matter what. And the only way to, we looked at some stores that didn't flatline and the only ones that truly broke out of it were ones that had this viral coefficient essentially of greater than one where existing customers referred on average more than one.

26:22So some might refer four, some might refer zero, but on average more than one, right? and that starts at retention that starts at the retention practices that you do and you know there's these data points that after a customer reorders from you once they're 26 percent more likely to reorder from you again after they reorder from a third time i think it's like 39 and then the fourth the third reorder so the fourth order it goes up to 48 so each time they reorder, they actually, it's not just a reorder. They're actually increasing their likelihood of reordering again. And then they become more likely to refer friends as well too.

27:06So it's like the heart of this healthy business that I bet you 90 % of brands just hardly, I mean, look at it this way. Like if you look at, I don't know the exact numbers, but it was roughly at the time when I did this talk, I looked at marketing spend and it was roughly 80 % of companies, roughly 80 % of their money spent, resources, cost, advertising was all on acquisition. Yep. And about 15 % or 15 to 18 % was spent on retention. So, you know, some companies actually have a cell phone company, you go to call to cancel your cell phone plan and they'll try to retain you. They actually have a retention team, but it's side thought.

27:52Almost nobody had a referral team, like what their whole budget just focused on like getting existing customers to understand our products and become ambassadors. But then we looked at the impact of, well, what actually moves the needle the most, it's actually should be flipped. So it's I just like, I think it's awesome that you are preaching this because it's so relevant, we should be spending 80 % of our time, money and resources on retention. Sure. And like maybe 15 on acquisition. Yeah. It's, I don't want to. No. And I think what you're driving home is often brands are reactive to this, not proactive.

28:30I mean, that's really what it comes down to when they think about acquisition to retention. And what it's really interesting is that, and you're kind of nailing it to the point, like so many brands sit and focus on the acquisition side before they've perfected their retention side. And that retention side can be anything from just simple as email or SMS. It could be at the product level, whatever it really is. I think the problem that we all have, and you and I probably have the same problem too, is we want new customers, new numbers, big top line growth. But the reality is if you can't understand how to keep your customer, then why are you acquiring new customers?

29:02Because it's just wasting and burning and churning the people that are coming in that door, right? And so to me, a lot of the thought process around retention has always been, and even today, as I start new companies, new things that I'm working on, I am focused more on the retention side. When I think about how do we make sure your customers are happy? How do they go spread the word of mouth and so forth? And you think about the business model where I do see failure in, you know, not just subscription companies, but any e-commerce companies, this, I always say this, right? The whole idea of paid advertising, it's almost an accelerant.

29:33It's basically instead of going off and working on the organic side and working on the word of mouth and all that stuff, use paid to offset and accelerate your growth, right? Get more customers. And if you do a good job and have a good product and a great experience, those customers will stay. Eventually, it kind of exits, right? Your page should go up and then they should start coming down while your retention and your word of mouth and your loyalty and your organic growth takes off, allowing you to spend less money to earn more money. But a lot of brands don't realize that until it's too late.

30:03Until they look back in the rearview mirror or they think back and they say, man, I really should have spent more time on the product, right? And especially at subscription boxes, right? Or like boxes or like their subscription products. You are almost earning your keep every month when you're selling that. And often it's not from your emails, your SMS. It's actually at your product level. Is your product good enough? Is it still serving the problem? Is it still feeling the person, wow, do they feel benefit and value out of it? And that is something that I think a lot of brands miss out on. Because again, they're focused all their energy, 85 % of their energy focused on the acquisition side.

30:37How do I get a new customer? How do I create new creative? How do I do this? How do I do this sale? How do I do that? But the problem is they're not keeping the people that have already said, hey, I like your product. Hey, I've made a purchase. Hey, I spent money with you. Let me spend more money with you. And people seem to ignore that. And that's just been a problem. And I don't think this is just e-commerce. I think this is an all business. You see this problem happen. And the best businesses in this world do really focus on retention. They realize how important it is. And they spend a lot of time and money on it.

31:05and they spend less time working on acquisition, which leads to slower growth, slower accelerants, but they also become great businesses over time, right? Over the next 10, 15 years versus three, four years. So what is healthy, when you say retention, I think that can mean different things. As a software company, when we think of retention, it's how long you have our app installed. Yeah. But for an online store who sells a physical product, what is retention? So to me, retention is keeping the customer in whatever format it is, right? Keeping them on the software, keeping on the subscription, getting them to repurchase or rebuy, right?

31:43So if I'm a subscription company, retention is very much centered around churn. Very clear, right? Doesn't matter if you're software or physical product. How many people are you losing every month and how long does that longevity? Because that's going to give you that LTV or that user, right? And then you've got the other side where you're looking at a normal company, right? Like a company that sells a one-time product. It's a repeat purchase rate. That's your retention number. That's the only thing that matters, because if you bring in a hundred customers and you can get 30 customers to come back and buy a second time, that again is your profit center.

32:15That's the moneymaker. That hundred cost you all the dollars and you might've made a sliver of dollars on it. But the reality is if you put time, effort, everything else in, you didn't make money. So if you ask me the question, what's healthy? Well, if I look at it on the repeat rate, right? I always tell people you want to see north of 25 to about 35 % of a repeat rate. If you see that repeat rate, it means you're doing a good job, you have a good product, and the retention is good. If it's lower than that, you have a bad product or your retention program is really bad, right? And if you look at the churn side of things and you go over the subscription, right?

32:47On a product, again, it really depends on where you're working, right? In consumer, it's different than softer, right? In consumer, I always tell people, I think the golden standard in consumer is somewhere like five, 6 % monthly churn. If you're higher than that, then you've probably got too much leaking out of the bucket. But it's very rare to see that, right? There aren't that many businesses that are running low retention numbers. A lot of companies, when I talk to them in the subscription space, and you probably know this data better than I do, but they're probably somewhere north of 15 to 18 to 20%, right?

33:16And if you look at a 20 % churn on a consumer good, that essentially means in five months, you are churning out your entire customer base, which means your entire acquisition funnel is broken because you are literally playing for five months of revenue. What's the point of having a subscription company at that point? There is none, which is where software is so exciting for people because you have a two, three, 4 % churn rate monthly or even less. It suddenly becomes a lot bigger because you can see the long tail LTV when a customer is staying for 24, 36, 48 months in a business, right? And that's what you really want.

33:48And so that's what you have to start thinking about because I don't think there's a perfect number. it all depends on your business. It's all a depends kind of thing, right? Yeah. It depends on what you're serving. If you're serving in like the wedding space, well, when they hit their wedding, they're probably no longer going to be a customer. Just on the baby space, you're only going to be a baby for so long. Right. So it really depends where you're serving. But to me, it's very simple. It's two things. It's either turn if you're subscription or it's just repeat rate. If you're just a one-time product sale.

34:16Yeah. That's all you should be aiming for. I had, you know, Jeremy Horowitz. Of course. He was on last week or the week before, and he's investing and acquiring brands. Brands. Software companies, right? Or something like that. Well, both actually. So software companies, but also e-commerce brands. He's been in the e-commerce space. And he mentioned that reorder rate is one of the number one metrics that he looks at. Like, it's interesting because like you said it, everyone's worried about acquisition and new customers. but he's a smart guy and he's acquiring e-commerce brands. He's looking at reorder rate.

34:51How healthy are they coming back? Are they, you know, so. You know, you can have the worst email program or SMS program in the world, but if you have a great product, your reorder rate will still be great. And it's crazy when you see that, right? And you just know there's optimization, but then on the flip side, you can have the best email and SMS program and have a bad product and your reorder rate will still never be good. Yeah. It's the truth of that. Yeah. So what are some of the mistakes that brands make with email and SMS? Let's talk about to not optimize their reorders or in general, like maybe not just on reorders, but in general.

35:24I have a couple of talking points around this because I think there's a lot that goes onto this market, right? So to start, I'll kind of go with the basics. I think there's a lack of education in this space and there's a lack of know-how, right? A lot of times when I talk to people and brands, right? Hey, how did you learn email? Well, I started my brand in 2016 and someone told me to install MailChimp. So I installed it and I just started sending emails. Great. Somewhere along the way, I heard someone to do something around segmentation and I started building little buckets of active emails. Great.

35:54That is like the level of 50 to 75 % of the brands in the market. So if you're listening to this and you hear that and that's me and you go, oh, that's me. The reality is there's nothing wrong with it. It's just what you've been taught. And that's what's been educated because again, to your point, they don't care. They're focused on acquisition where there'll be meta wizards, by the way, there'll be wizards or Google or meta or whatever they're spending their dollars on. They'll be excellent or they're, but they don't think about it. So the first thing starts with the very simplest core, it's audience management.

36:21You know, I was on stage recently and I was giving a talk and I said, how many people here know what RFM is? And people kind of stared at me blankly. And it was like two people in this crowd of 200 raise their hand. And to me, when I think back to how I learned email, I learned through RFM, which is recency, frequency, monetization. It's the core of what segmentation is essentially, right? When did they buy? How long have they been on your list? When's the last time they purchased? What's the repeat purchase? All of these data points are right there. And the tools these days are so much easier than before.

36:50In 2009, I would download the list. I would cut it up with Excel, do a bunch of pivot charts, build those things and upload them back and then send an email, right? It used to take me hours and hours to build segments and send email. Today, with tools that are out there, OmniSend or Klaviyo, any of these, dude, there's seconds. Yeah. And a lot of them are pre-built. They're already pre-built. You click a button and they're going to do them for you. And then secondly, the second thing that really comes into place is then they take their bucket of people. And again, this will speak to most of the people that are listening to this.

37:21They'll take a bucket of people and they'll just say, well, you've been engaged for 90 days, let's just send you the same email. Well, there's a problem there too, because, well, the facts are simple. You got your prospect bucket and you got your customer bucket. 80 % of your sales and your repeat sales happen out of your customer bucket. Your prospects, if you think about it, and you know this, Jay, like they come to your list, they opt in. Why? Oh, there's a coupon that they want to get, right? That's not high intent. That's a low intent value action. They go in there and do it. And then if they don't make that purchase, because most D2C products are impulse purchases.

37:54The longer it takes beyond that, the less chance they're ever going to make a purchase. Yet we focus on that list because that's your big list size. You may have 100 ,000 people on that prospect and only 10 ,000 on the customers. So you imagine you smush them together, you send them the same email. So to me, the second part of this is part of the RFM theory, but it's always saying, hey, split your list up. Take those people and understand my customers need to be treated different than my prospects. The only job you have with your prospects is one thing. Do you either get them to buy or get off your list?

38:25Because that's what they're worth, right? They've never sent. And anytime you send an email, it's literally costing you money to continue sending them. Yet, marketers sit here and they boast their big list and they focus on this big prospect list that's never driving them dollars and revenue out of their pockets, right? And then you can go way deeper than that. And that's at the core of the basics of what I see in the market. you get into the next level of segmentation, understanding value. There's so many things, from copywriting to design. There's a lot of ways that people can optimize it. And a smooth running machine takes a lot, right?

38:57It's not just a single person. It's literally impossible to run a great retention program with a single person. I understand that most brands can't have it. So that's where I try to get people educated on just getting something done to continue to improve. It's like, just like a better, be better 1%. Work on your retention program, 1 % a day, do one little action, learn the habit, continue to get better at it. And you'll quickly realize how fast you can move the needle. And if you can just save 1 % more customers to repeat, 1 % less to churn, that is a significant amount of money over a 12 month period that brands, they struggle to see that an operator struggle to see this.

39:35And that's really what I tell people. Like, you've got to start with the core, learn the education, and get out there and learn from people. There's so much free education. You can do paid education. There's communities. There's so many things you can go out there to do. But again, it's an unsexy topic. Who wants to work extra hard for the next 30 days to improve 1 % when I could just go dump more money on Meta? I get it. But the reality is to have a long, sustainable business with a great customer. And to your point, a loyal base that creates word of mouth, organic, repeat purchasing, all that stuff to happen.

40:06You got to work on retention, right? So that's where I go with that. so good what i've probably a whole bunch of questions coming to listeners minds are and i what's how much emailing is too much what are the best times of the day to send should i what was the term i heard one time blow out blow out my 20 like the 20 of the people that will never open do i just like not worry about them and email every day or do i like give me some thoughts around some of those like best practices if you want to call it sure one one One of the things that I kind of coined in this market over the last couple of years that people always joke to me about is I always tell people, send more emails.

40:43Okay. Now, I would definitely wear a t-shirt. It's kind of like my motto in this space. And the reason why I say that it's not to tell people to go spam. There's, that's not what I mean, but what I often see is two things that come into place, right? Number one, people think that they can over email in the space. Jay, how many emails do you get a day these days? Probably like 300, 400 emails. Probably you have know. I don't even know. Yeah. And if I asked you the second question, when's the last time blah, blah, blah emailed you, you'd be like, I don't know. You really don't. The world has changed.

41:12And the reason why I tell people to send more emails, you're either in the noise or you're not even seen. And it's a very simple thing. And when you're a brand, it doesn't matter. If they don't see you, they probably don't even remember you. And so there is no such thing as emailing too much on a given day. Obviously, if you email six times a day, that's a problem. But if you're emailing them every day. So when people ask this question to me, it goes down like this again. If you're a prospect and you've never purchased, I'm emailing you every single day until you either buy or get off my list.

41:42Go opt into any of the biggest brands in the world. They all do that. The true classics, the hex clads, all these, if you're a prospect and you never purchased, they will email you and hammer you until you buy or you get off their list, right? When they become a customer, that's when you slow down because you're trying to build a relationship with them. You're trying to show things, you have meaningfulness behind that. And there's intention behind a lot of those things. But even then, you can still keep the emails up and you should be emailing often, right? And that leads to a lot of things, right?

42:10That helps you with your natural scrubbing of your list. How do people offset and go away? You want them to unsubscribe, take that action and tell you, I am no longer interested in your email. You don't be precious about it. You really want to understand that they don't want to make a purchase of your product. And if they do, they'll come back and they'll make a purchase later on if they really want to. And then the second thing to that That is, when you send, well, let your customers tell you when they want you to send. I always tell people, the data that we have today as email marketers or marketing attention marketers is so much better than we've ever had in our lives.

42:42And you literally, from your ESP or your analytics or your data or anything, you can tell when people are on your thing. You can go to your social media and look at your little chart and it says, oh, I get the most interactions at 11 a.m. Well, I should be in front of them at 11 a.m. I should be at 2 p.m., 5 p.m., whatever it might be, right? There's a lot of data that shows a lot of the things that people mess up and, oh, I see more opens at 9 a.m., but I see more purchases at 8 p.m. It happens all the time. And the reason why that happens is at 9 a.m., what are you doing? You're getting on work.

43:11You're looking online. You're checking your email. Plowing through. You're not buying. You are opening. You're engaged. But at night, what are you doing? You're sitting on your couch. You're watching TV. And you're like, hey, man, I should go look at that product. And the people who don't, no big deal. They'll get it later, right? So there's a lot of that comes into place, which comes into, it all depends. And you've got to go learn and understand your data around it. So data is more relevant than ever these days. And it's more off in front of you than ever these days. You just got to use it. And people just don't use it.

43:42At the top of the show, I mentioned OmniSend can now talk to ChatGPT and Claude. And I want to tell you why that's even bigger than it sounds. So if you missed it, quick catch up. OmniSend is what I use for email and SMS on every Shopify store I work with plus for this show as well. And you can now connect your AI cloud chat GPT straight to your OmniSend account, your data, your campaigns, your flows, everything. You open a chat and you ask, what should I focus on this week to make more money? And it will come back with real answers about your store, which flow is underperforming, which automation needs improvement, which customers are going quiet, what's missing, everything.

44:21My favorite part though is AI segments. I used to build these by hand clicking through filters forever. Now I just type something like customers who bought twice but ignored my last campaign and it just builds it. And anything it writes already sounds exactly like your brand because it pulls from all your previous emails from your website, your logo, your color, your voice, everything. I'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.

44:56If 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. I heard a great tip today. I'll get your thoughts on it. I can't remember his name. He has, he owns, it's called, I think it's called subjectline.com, but it's a website to like test subject line and stuff. But anyways, he was saying, if you have different types of emails, if there's like announcements or product information or sales or whatever it is, in your brand name, put, so say your name is Figs, whatever.

45:37and then in brackets put announcement or figs in brackets product updates sure the same same email as if it's from a different department almost so then the recipients feel that they're not it's not as bombarding as getting it from the same they see a different it's you know they said he said the most underused area of an email is actually the from name yep we all we think about the subject line we think about the preview text but the from name is actually very powerful offer so like if you send out an offer once a month having bracket offers put in there and then there was one other oh shoot what was it it was on the tip of my tongue another tip he had it'll come back to me oh there was that and and i and then i think a lot of people spend a lot of time trying to figure out how to not end up in the promotions tab and they try to like word their email a certain way to not use the word like sale or offer or free or something like that because it gets flagged as promotional.

46:35And he was saying that they actually see better conversion from emails and promote like we, that's correct. We, we think like, Oh, I don't want to be the promotions tab because no one uses it. But first of all, less than, I can't remember what it was less than half. Yeah. Yeah. Of Gmail users. And now Apple has a promotions tab actually have it enabled, but the ones that do have it enabled, they actually use it to find promotions and And so it's actually not a bad thing to be in promotions tab. They actually saw a higher conversion when it's a promotions in a promotion tab. So on the technical side, it's awesome to actually, by putting it in the promotion side, you don't trigger MPP.

47:16You don't trigger some of the things that happen with the false opens and the bot stuff that happens more in the primary side. So there's like little things that are beneficial. And I'm with you. I've seen this data all the time. Promotional tab is not a bad thing. You are selling something. You should be in the promotional tab and it's okay. Just sell better. Don't make a blame. I think this is one of those things people blame because they think that there's an optimization point here when they should be working on their copy, their design, their segmentation, their timing. There's so many other things to blame and worry about.

47:46Tabbing is natural. It's designed for the user experience and the user experience. There's no hack or secret trick to go around it. You send enough emails and it's enough promotional emails. No matter how tricky or whatever you get, you're going to end up in promotion. But again, that's okay. That's what it's meant there for. Yeah, exactly. And I personally don't open every promotional email, but I see the way my wife uses email. Yeah. And she opens everyone from every brand she shops with. And so we have to remember that there's a segment of people that that's how they that's how they interact with brands.

48:18And that's, you know, so. So, okay, so you talked about retention automations. There's a lot to unpack there, but maybe can you highlight a few key automations that maybe every Shopify store that must-haves should be running? Yeah, man, look, there's only so many that really matter. There's a million you can go produce, but there's only like a handful. There's probably about five of them I can think of, right? So your first one is your welcome email, which is your pop-up follow-up, right? That's supporting acquisition, not retention, but it's still helping your list, right? You're using email to support acquisition, right?

48:51You've got your post-purchase, right? So they make a purchase. You want to welcome them, thank them. You've got your - Educate them on the product. Yeah, exactly. Tell them about your brand. This is when you start building trust with them, not before the sale, but after the sale. There's no need to build trust with them before because they're either going to buy or they're not for most brands, right? You're signing a couple thousand dollar product online that maybe there's a need and warranted. Then you've got your typical abandoned checkout. I'm going to segment this together. abandoned checkout, abandoned cart and browse abandonment, right?

49:20These are browse and abandoned segments. These are people you've identified that have, you have information on them and you're just trying to get them to come back, right? That's pretty easy. Then you got your like shipping notifications and all your other notification kind of things that you want to do. Very important because these are the things that get the highest opens and the highest engagement and people care about them and so forth, right? And that's, I mean, outside of that, it's like, you know, You can do the win backs. You can do the sunsets. You can do the upsell, overrunning. You can do all these other things.

49:50But these are the things that make you money. These other things are small auxiliary things that can help optimize, but they're not going to drive much revenue outside of it, right? Now, you can get more critical. And I would say, don't spend time building all these other flows that don't really generate you dollars, right? I'm generating dollars by focusing on my post-purchase. And I'm thinking deeper about my post-purchase. Is it their first purchase? Is it the second purchase? Is it the third purchase? and I'm going to curate them with different messages. Same thing with an abandoned cart. Is it a new abandoned cart or is it someone who's purchased before and they're coming back and checking out your product?

50:22Different intents, different people. And that's where you should be spending your time and dollars right now. And that's where the needle actually moves for people. And people spend too much time. Again, I have one single post purchase, no matter how many times I buy, I get the same emails every time, but I've got 90 flows running across all these different things. That is inefficiency. And I see that all the time. Yeah. Yeah. Okay. So when you talk about flows are, I use the word automations, same thing. Automations, flows, funnels, whatever the campaign, I mean, everyone names them differently, but same thing.

50:52Yeah. We're on the same page. So between flows and campaigns, where should merchants spend the majority of their time? So, you know, I know you had OmniSend on, so there was a really cool report that OmniSend distributed at the end of last year, at the end of this year, or the beginning of this year, I guess. And they said that one in three clicks and automations drove a sale. And yet we all spend our time in campaigns. Yeah. I think that this is the two hot takes I'll take here. Number one, if you're not spending every 30 days in your automations or your flows, and you're not checking in and optimizing and updating, you're probably leaving money on the table.

51:27Yeah. Right. That's pretty simple. And I think that people aren't doing that. Most people start their business in 2017 and then they forget about it and you're like, yeah, it kind of runs on its own. That's not how it's supposed to be. It's supposed to be constantly optimized and updated, right? And then the second thing comes back to your campaigns, right? Your campaigns are important, but the way that people run their campaigns is broken because they're just sporadically sending emails, whatever. And I think a lot of people don't apply a good marketing strategy around their campaigns. And that campaign needs to tie to your website and all the things that you're doing.

51:58So those are probably the two things I think about. What's more important? I think they're equally important, but automations don't get the love that they need to have. another omni send stat from that report was and it was that i was talking to redis who's the ceo of omni send and he said that roughly two percent of the emails that go out through the omni send platform are automations yep but they account for 40 percent of the revenue generated through omni send like it's insane but everyone just uses it like they used mailchimp back in the day just create a campaign, promote my sale, promote my sale, Black Friday sale.

52:37That's what everyone's using it for, but it's a 20X. Yeah. I mean, if you work backwards on a data, it's one in three people are making purchases, a 33 % conversion, where if you send a campaign, you get a thousand clicks, you get a 2 % conversion on that. Right? Right. It slipped. Yeah. And so people don't spend enough time on it. And so my message has been constantly, and I tell people this all the time. If you're not in your automations, constantly updating, working on it, changing your bestsellers, testing different things, trying to optimize it, you are just leaving dollars and dollars on the table.

53:09Yet again, campaigns are the pretty images that you get to go send out and people care about those way too much. So what about SMS? What's working right now with SMS? I know it's gotten more expensive over the last few years to send. How should brands be thinking about their SMS strategy and email and how they work together? Yeah. So SMS in 2019 was great because it was kind of like a, it wasn't new, but it was new to this space and it was new and fresh. And then we hit the pandemic, as you said, and everyone was home. So you could hit them on email or SMS and they were bored and then the world opened up and then people started screaming, why isn't SMS working?

53:45Well, here's the thing about SMS, right? Here's two really interesting things about SMS. One, if you ever looked at the data point of SMS, all things SMS happened within the first about two hours, right? That means if you send within the first two hours, you're going to either get that action or you're going to get ignored. Okay. Number two, the second thing about SMS, it's really unique is that it is really a now in times tool. Basically it's about a movement or action that you're doing less campaign. So things like the sale is closing or you're shipping notification or you left something in your cart.

54:15These are actions because they're reactive to the actions that you're doing versus campaigns, which are like typically treating it like an email per se, but it doesn't get treated or handled by a user the same way. But the same thing with the caveat to all this is it's also generational. The older the generation, the less effective SMS tends to be. So when you think about how email and SMS work, they should be working supportive off of each other. If I've got a flow, for example, I'm going to send my email out as soon as they opt in, maybe a half an hour, I'm going to probably welcome them with my SMS.

54:47But then the SMS starts becoming a tool to help the close, not to introduce, not to increase prospecting, but to help close, right? Yeah, makes sense. And with costs, the biggest thing against costs is again, and I'll say this again, for 20 years, we've learned how email works. SMS is no different, but yet somehow the principles are not applied across both email and SMS. Think about it, right? 90 day active, for example, is a perfect example of an email characteristic. Why don't we do that on SMS? No one knows, but this is really things that people don't understand. So they need to be treated the same because it's often the same consumer on the other end, right?

55:23And it's part of their journey. I can't treat you like two different channels, Jay. I can't be like SMS over here treating you on one sale and email on this side treating on sale when you're the same single or human. But a lot of brands treat it that way. And I think that's a mistake in this market. I think you should be using it to support each other. It's interesting that you mentioned that, I can't remember what you said. In my head, I heard transactional messages, but you said something else, but like - It's now in the moment. It's now in the moment. now in the moment yeah and i think back on the last few sms's that i've clicked through like i don't often click through them but when i do it's hey this is back in stock or something that's very transactional not yeah big spring big spring say say sale is on now like i don't i don't engage with sms that way but if it's a transactional one where this i don't know this just in goes pairs with what you just bought or something like more of a transactional or your shipping updates or like any of that are the things that people care about.

56:24And that's where that channel is used in effect. We get way already way too many SMSs, just like we get too many emails now. It wants to click on it because it's not like you can sit there and I know there's tools and different things you can have conversations and different things with, but the reality is like, you're still going to click. You're still going to go somewhere. You're still going to have to go browse a site and you're still going to have to go buy. Like it's not different. An email is actually more convenient because it's your mailbox and you are expecting that. In an SMS, it feels disruptive unless you're feeling helped or helpful, right?

56:52So that's where I see that change. And so SMS continues to evolve. I think it's an important channel. It's here to stay, but it also, a lot of brands waste a lot of money because they don't think about it in the channel that it's actually useful for. Totally. And I'll just give a plug to OmniSend here, who's one of sponsor the show but it's so easy to do that i use it and it you can it's one of the benefits of having everything in one platform is the intelligence of not overlapping and conflicting and you don't want to send things at different times but it really does make it easy so you co-founded commerce table did we talk about that on air did we talk about that before this i don't remember maybe before this show that's the problem when you know anyways but so so you're the co-founder first of all tell me about commerce roundtable and i want to dig into a little bit i love what you're doing there.

57:41Commerce Roundtable started as an internal event at Sunlane and I acquired it out of the company about a year ago now at this point when I left. We started it because I felt that there was not a good centralized event that was really focused on the content and education in this space and it was never focused on community. So what's been interesting about that journey has been we've been congregating, we've been building this thing for now three years, right? And so we started back in 2023, I guess now at this point, and we put this little event together, super boutique, very focused on content education, getting some of the greatest people in the market to come hang out and learn and talk to each other.

58:17And it's been evolving since that. We're on our third year now and we continue to grow. The unique thing about Commerce Roundtable is none of us, I always joke about this, none of us in the Commerce Roundtable, except for our event director, we don't actually make any money. It's not designed for that. What it is designed for is it keeps us in the know-how, it keeps us fresh, it keeps us in the network, it allows us to be thought leaders in the space and allows us to do something we love doing, which is to serve the community. So Commerce Roundtable, it happens now twice a year. We did a Miami event recently.

58:46We'll be doing a San Diego one on September 22nd and 23rd. But it's unlike the typical events you've been to. It's not a stuffy corporate conference. We don't have multiple tracks running. We don't have the traditional booth setups that you might expect. It's very black and white. You got two rooms. You're either in the speaks or you're in the networking area, which does have sponsors, Of course, someone's got to pay for it, but we've got these two rooms. And when you're at the conversation level, it's not Nike preaching you high level things about what you would do as a billion dollar company.

59:15It's real brands, real people are on the ground floor talking about actionable things that they're doing today. And so we really focus on that side of things. And yeah, it's been an interesting journey and we'll continue to build it. And, you know, we're excited about what we're doing with it just because again, it's the biggest unique thing about our event is that we're not here to make money off of it. Making money would be nice, but it's not really the focus. It's not how we make money. What we want to do is serve the community and continue to learn. And it actually empowers us, man. You just like you go to conferences, Jay, like we go because we want to learn, not because we want to go off and sell things or do anything.

59:50We're here to learn. And we've found a way to learn for ourselves. Yeah, I love it, man. It's good for you for doing that. I hope it continues to grow because it's, you know, there's these large events like Shop Talk is great. But at the same time, you nailed it. Like all the talks are by the CFO of Walmart and, you know, this. And it's just, you could maybe say it's somewhat inspirational, but it's not really practical. And then the other talks and the other track rooms are all sponsored talks by, to be honest, it's vendors like us who sponsor a talk and they get 10 minutes or 15 minutes of a talk.

1:00:29And it's, they're often good, but they're very, they're promotional. So like to just have good content to help brands grow, I think is amazing. Yeah. And we've cut out a lot of that stuff too, like the tech talks and all that stuff. I love tech companies and they're important for everything, but we found ways around it so that they're not leading the stage and ruining, not ruining, but they're slowing down the vibe of the experience of a conference. We really, people come, especially at a brand side, when you're coming to these events, you're spending time and money to be there. And the thing you're there for is so you can do something and take it away from my business.

1:01:04Learning about a tool is not the way you're going to go build your business. A tool does not, and this is always the thing I always say, I don't care what tools are used. The strategy is what matters, not the tool. The tool is just a vehicle to employ your strategy, right? And that's where people should be thinking about. So you've been in a lot of conversations with a lot of really smart people, really like founders at these events. Yeah. What's one trend or insight that you're seeing in marketing, retention marketing that like maybe no one's talking about right now? Wow, no one's talking about, you know, one thing that, you know, at our recent - Maybe it doesn't have to be that no one's talking about.

1:01:38I think the continuous, as you, we've just kind of mentioned about diversification of channels, right? On SMS, retention is starting to continue to expand out, right? Push notifications are pretty freaking cool. And there's a lot of value behind it. WhatsApp is becoming more and more popular these days. Like more and more channels are becoming more relevant. And I think when you think omni-channel, cross-channel, whatever channel, whatever your name, you want to call fancy channel, you want to name. I think the biggest trend that's occurring right now is you have to be where the customer is, regardless of what your preference is yourself personally, creating a lot more work for a lot of more retention things.

1:02:15But you got to be on Instagram. You got to be on TikTok. You got to be on WhatsApp. You got to be on Facebook Messenger. You got to be where your customer is ultimately. So to me, that's probably the biggest changes that is happening in retention where in the past, everyone was okay with a single focus, right? I'll focus on one thing, but now it's becoming, you got to chase your customers around because if you're not doing it, someone else is doing it. Yeah. I heard a term that I love the other day. We often refer to it as the marketing funnel, the customer funnel. And I think we've got to stop using the word funnel and start using customer lifecycle.

1:02:50It's not about top of funnel, moving them in, moving them down, getting them to buy. it's getting them to buy again and again, and then refer and buy. And it's like the marketing life cycle is, you know, so. There's another one I heard before. The new one is a tornado. Think about like a tornado. It's just everywhere. There's no, there's this sporadicness, right? But you're trying to keep them inside of this thing that is going to tap in. If you think about a tornado, it's spinning and they're hitting different channels, different markets. They're on Amazon, they're on TikTok, they're whatever.

1:03:20That is where the world is heading. And well, Well, we got to adapt as marketers. That's all we can do. We can't change their mind. We must conform to what they want to do. Yep. Yep. And tornadoes pull everything in. That is true. Right? Pull it all into the center, which is to get them to buy. Oh, Jimmy, this is, we could talk for hours, man. This is fun. I want to do our lightning round because we're - Sure, let's do it. Like we're over time already, but I don't care. That's fine. And I'm going to add a question in because you inspired me to add a question that I'm going to ask you and then ask from now on too.

1:03:51So I'm going to start with the question that's not even on the list. The question is, what's your favorite AI use that you're using right now in your life that you like the most important thing you use AI for? I mean, it's content still to this day. It's just helping me. It's literally my VA, my assistant to just talk to, right? Like I used to, I'm a conversational person and I like to talk it out. And I find that AI is a great way to just talk it out with different. I do a lot of things with AI, but that's probably where I use the most right now. So, hey, I'm going to go design a podcast. It's not that it's going to write the podcast for me, but it's going to allow me to bounce ideas and get ideas.

1:04:30And it allows me to have that conversation. And instead of going off and talking to all my hosts about it, for example, it allows me to kind of conform. So that's my favorite use right now. I like it. What's one book you'd recommend every e-commerce or founder read? Man, you've probably heard this a thousand times, but it's The Lean Startup, man. I mean, that's just a simple book that really explains how you got to think about business when you start. And it's a good one. Like you can't, yeah, a hundred percent. There's one I'll just want to throw in here too for listeners. Do you follow Pat Flynn at all?

1:04:59Yes, I do know Pat Flynn. Yeah. So he's got a book called Lean Learning, I think it is essentially. So it's kind of a, it's not a spinoff. It's inspired by, but the premise is similar to Lean Startup, but in how you consume learning, how you grow personally. And anyways, I just thought of that when you said that, so I'll throw that in too. What's a sacred cow in e-commerce you think merchants need to shoot? Oh God, a sacred cow that I didn't even see that question before. What do they need to shoot, take out? Sacred cow that they need to rethink. Something that brands are doing. I'm going to say the thing that people are going to say, branding.

1:05:39I really think that people overemphasize their branding and design. Yeah. Yeah. Interesting. Oh yeah. I can see it. Yeah. What separates, oh you're this, I'm interested on your take on this one. What do you think separate separates like a one-time buyer brand from ones that create lifelong customers? What separates them? It's just a great product, man. It's great. That's interesting. The last one I had was the exact same thing that they said quality product. Yeah. It's a great product experience. Unboxing. Like it's just product. Yeah. What's one underrated Shopify app you think more merchants should be using?

1:06:14Man, I'm going to go off into a side, since we're talking about retention. There's an app called Raylion.io. I don't know if you know what that one is. No, I don't. Okay. So Raylion.io is AI segmentation, RFM, basically taking all that stuff I talked about, automating it because they've figured out data and all the stuff that happens with the data. So big bullish on them. I like what they're doing. Nathan is the founder over there and he comes off a$7 billion IPO and now he's building this new product and I'm bullish on what they're doing over there. So that's probably the most underrated tool that people aren't talking about today.

1:06:49Awesome. I love that. I'm going to check it out. R-A-L-E-O-N.io. Okay. Awesome. Thank you. That's a great one. If a merchant has one hour per week to spend on their business, we're all busy. Where should they spend it? Probably on your product. I'd still go back to the product thing. I think that not enough brands work on their product and building the differentiation and building their star. And I mean, everything that centers around it. I mean, I think again, if you build a great product and you spend enough time on it, you'll eventually get the right customers to it. Yeah. And I, you know, I think I was reading this somewhere today, they, someone was, you know, everyone's got their AI predictions, but as AI becomes everyone's copywriter and everyone's video creator and everyone's website creator, the real differentiator is going to be the product.

1:07:38Like that is going to be more and more important than ever. Everyone's going to have beautiful websites. Everyone's going to have great AI influencers and it's, the product is actually going to be more important than it's probably ever been. Correct. I've always believed that, but it's becoming more. Yeah. To your point, like you can't, you know, obviously there's drop shipping days where you can just go white label something. There's not saying it's gone, but it's continuously being challenged. And the reason is if you just have a great product, man, word of mouth, happiness, everything comes along with a great product and people just don't spend enough time on their product.

1:08:10They think that it's good enough and you can't be good enough. You have to be great now in order to be successful as a direct to consumer brand. Yeah, totally. Last one. What is one e-commerce metric more brands should obsess over, but they don't? It's probably their CAC, their CLTV to CAC ratio. Just knowing your data points. I mean, actually, I always say that if you want to get more broad, just know your freaking finances. That's something that you just see a lack in this market. But if you're going to drill down to a single element, it's your CAC and lifetime value. Basically, what's your CAC, lifetime value to your CAC ratio?

1:08:44Yeah. And okay, customer lifetime value to customer acquisition cost. Yeah. You got to know your number because you need to know if you can afford the customer you're doing or you're just spending money and burning it into thin air. Too many companies are burning it into thin air, unfortunately. Yeah. And when you say CAC, all in CAC, like marketing spends, not specifically like a specific channel, but all in. You got to look at it all in. What does it cost? Every little piece of it and realize it. Because when I look back at my brand and where we failed in a lot of things is where we couldn't make money is we couldn't create, we couldn't balance that metric basically.

1:09:16And we couldn't outrun the fact that we weren't selling the product for enough and we weren't creating enough lifetime value for the amount of dollars you're spending and we're running on a treadmill and you can run on that treadmill for a long time but yeah eventually that treadmill ends and growth hides problems sometimes you can be growing you can have unhealthy numbers you're a cack and but you can outgrow it but you can't do that forever right so that's correct jimmy this has been a ton of fun thank you so much where okay so here you're all over the place i was gonna say where do i send people You know, look, I spend most of my time in two places, either on X at Yo Jimmy Kim or on LinkedIn at Jimmy Kim, right?

1:09:57So those are the two places that you can find me. Jay, you mentioned already, I post a lot. I share a lot of information. It's all free. That's where you find me. And then from there, you can find all my resources from all my pods to my community, to my courses, whatever you want to get into. But that's where you'll find me main and every day. Awesome. I'll make sure to include that. Thank you so much, Jimmy. I'm looking forward to seeing you. I don't know exactly when this will air. Sub Summit, right? I'll be at Sub Summit. Okay, yeah, I'll be there too. I think this might come out before then, but might be listening to this after, but really looking forward to seeing you in about a week and a half here.

1:10:30And I guess two weeks? Yeah, it's really soon. Two weeks. Two weeks, officially two weeks, yeah. Are you going to Shopify Editions? No, because that's... No, that's literally right at the same time or a day after or something. Yeah, there's no chance I'm going up to Canada. Yeah, it's too bad at the same time. Yeah, there's a lot of stuff going on at the same time. Yeah, spring's busy. Yeah. All right, man. Well, thank you so much. We'll see you soon. All right. Thanks, man. Okay, and now time for your 1 % win tip. As you know, at the end of every episode, I like to share just a real quick tip or idea that can potentially improve your store at least 1 % because if you improve at 1 % every day at the end of the year, it's 3 ,700 % better.

1:11:11It's mind-blowing, but that's what 1 % compounds to. So the idea I'd like to share with you today, and I think this one is timely with Black Friday fast approaching. I think it's about six, seven, as my kids like to say, six, seven weeks away. I don't know if you're following the TikTok trend, six, seven. Anyways, it's about six or seven weeks away. But what I would do right now is make sure you kind of are starting to let people know that you will be doing something for Black Friday. And a really good subtle way of doing that is change your email collection form to instead of saying anything about joining our mailing list, just make sure you're a Black Friday VIP this year or get the VIP Black Friday pricing this year.

1:11:54Enter your email below plus a 10 % discount today. Of course, don't like maybe take that away, but get your 10 % discount today plus be a VIP this Black Friday. Now, I actually think you should make them VIPs. And if you listen to the last episode we just released with Jordan West, if you listen to the 1 % win at the end of that, and actually the last, we did a full 15 minute episode on this. It was episode 37, about 15 minutes long, where I shared a whole strategy and the actual way that you would implement it on your Shopify store to actually turn customers into VIPs where when they log in, they get VIP pricing.

1:12:32So I won't talk about that today, but I'm not just saying call them a VIP, actually make them a VIP. But today I would turn your signup forms into something with the messaging saying, become be a VIP this holiday season, this Black Friday. That's it. Very simple. But that little subtle message lets them know that like you're doing something this Black Friday, something is coming. And I think it's really important to start it early. So you started about a month before you actually can reduce your sales a bit. So I don't know if you noticed, but when Amazon does their prime days, have you noticed they started promoting it two months ahead of it?

1:13:11They used to promote it three or four weeks before. Now for two months before prime days, they start changing the website and it will say on the homepage prime days coming July 18th or whatever it is. But it's two months before it actually happens. You actually want them to be a little bit numb to it because you don't want it to affect their buying behavior now. So if you start really heavily promoting Black Friday, like October 15th or end of October, people will stop spending because it's close enough to Black Friday. If they say, oh, you know what? Black Friday is three weeks away. I'll just hold off on my purchase and buy it all on Black Friday.

1:13:49But if Black Friday is two months away, you know what? I maybe don't want to wait. So I'm going to continue with my regular purchasing behavior now, but I still get to know that you're doing something for Black Friday without it affecting my behavior now. And Amazon knows this, and that's why they start promoting Prime Days so far in advance, because they can promote it, but it's so far in advance that customers don't give up on a purchase they're about to make to wait for Prime Days. So there's a bit of psychology there, but that's the tip for today. go turn your signup form into something that promotes your Black Friday VIP status, however you want to word it.

1:14:27Thanks so much for listening. And just real quick, I always mention this, but genuinely if you're getting something from this show, and I'm blown away by how many emails I get, I just want to say thank you. There's a lot of people emailing. I sometimes put out a message saying, hey, if you have a question about this, people are emailing, people are asking questions, and I'm getting such amazing feedback. So I, of course, can't name names, but you know who you are. There's been so many of you. Thank you. That means a ton to me. I know there's a few I still have to get back to. I haven't been able to reply to all of them, but I will very, very, very soon.

1:14:59But thank you for that. And it means a ton. I would, if you don't mind, would you be so kind as to leave those positive reviews in Spotify or Apple Podcasts, wherever you listen? It would mean a lot. And if you can write something there, that is awesome too. So thank you so much. And we'll see you on the next episode. You