🏆 SHOPIFY 1% WINS: A $10 Gift Can Beat $70 in Ad Spend (Plus Almost All Loyalty Programs)

0:00OmniSend just shipped something that I've always wanted. You can now connect OmniSend to ChatGPT or Claude and just say, where can my email and SMS campaigns be making more money? And it actually figures it out. It reads your store data, all your campaign details, your store history, and it tells you and the insights are legit good. And even better, you can then say, okay, let's fix that or build that campaign. And it actually does it right from your chat. It's wild. Now, if you're one of our listeners, you can get 30 % off for three months on OmniSend. Just go to the show notes. There's a link there.

0:31Or you can just use the code J30, J-A-Y-3-0 when you sign up. Now, if you're using another email and SMS platform and you want to switch to OmniSend, which is a great idea, they will do the migration for you. Just give them five days and then you show up with everything set, ready to go. Now, they've migrated thousands of stores from Klaviyo. And on average, they're saving 35 % on their email and SMS bills. If you're listening to this show, you clearly care about your Shopify business. If your store isn't backed up and protected, it could all be for nothing. That's why I tell every store owner I know who cares about their business, you 100 % need Rewind installed.

1:07It's a non-negotiable for me. One bad CSV import, one app that edits your store the wrong way, which has happened to basically everyone I know. One bulk edit gone wrong, and now AI making changes for you. Listen, Shopify does not have an undo button. Rewind is the undo button. Go to shopify1percent.com slash rewind for 30 days free on us. Links in the show notes too. Good morning, 1 %ers. Welcome to another quick daily short here. Something I want to talk about today is loyalty. Loyalty. A very interesting word when it comes to e-commerce because some would actually argue that there is no such thing as true loyalty to a brand.

1:59Yes, some brands have very effective loyalty programs and sometimes customers do buy over and over from the same brand, but rarely is it actually because of loyalty. So a good example of that is I was actually talking to someone last week who has bought Converse shoes. I think he said for 30 years. He's about 60 years old and he's bought the same pair of Converse shoes for 30 years of his life. He's actually got six right now, all in different colors, red, blue stripe, green stripe. You would think that this person is loyal to Converse. And so I asked him why he buys the shoes and he said, they just fit well.

2:48why was it there was no other reason there was they just fit well I said well would you switch to a different brand and he said absolutely in a heartbeat if I found another brand that fit as well as converse this particular shoe I would switch in a heartbeat but I just haven't I haven't found another pair of shoes that fits as well as these and so I just you know if I buy it and I stay with it it's kind of like I buy that a certain black t-shirt that fits and you stick with it that's not actually loyalty that's just convenience you find something that works and you're trying to simplify your life and you just stay with it and then also rewards programs they cause an action it's like you do a thing you get a reward but it's also not true loyalty so here's a good example to really illustrate this you know how these coffee shops have the buy 10 get a free coffee punch cards if you buy 10 coffees you go to a coffee shop you get your free coffee you earned that coffee you don't feel loyal to the brand yes that punch card might have affected your buying behavior i'm not saying loyalty programs don't have an effect on on buying behavior what they don't have is they don't have an effect on true loyalty that you're not going to go out to all your friends and rave about how amazing that coffee shop is i bought 10 i punched all 10 cards and i got a free coffee but let's imagine you go to that same coffee shop and they don't have a card program they've got no no punch 10 but they keep track in the back end of how many coffees you bought maybe on their cash register they can see that oh jay this is jay's seventh coffee this is jay's eighth coffee because maybe i don't know they make when i pay with my credit card they just know who I am or something and once I've bought 10 coffees the barista says hey Jay this one's on us today I would be like whoa are you serious yeah this was on the house enjoy a coffee on us today like that would blow my mind and I would probably tell people about it I would probably say wow I am gonna buy my coffee here forever now the difference in the effect that that has on behavior is incredible versus I'm earning my points and getting a redemption versus just a gift.

5:10Now, this is the thing. And here's why. Loyalty comes from someone doing something for you. You don't, you can't feel loyal to a stranger on the street. They've never done anything for you. But if someone has sacrificed time for you, maybe literally sacrificed their body in some way, they've saved you, they've helped you, they've spent time with you, they've done something for you, you will feel loyal to them. That's just how loyalty works. You can't feel loyal to a person walking down the street who's never done anything for you. And so that same principle applies to other areas in life with brands.

5:50You can't truly feel loyal until someone has done something for you. And the problem is, is that's very hard to do as a brand. You can't just do everything for your customers. So then how do you get them to actually be loyal to be like raving fans that they would recommend you to everyone they know go out of their way to buy coffee from you and support you not just if it's convenient because it's on the way to work, but actually like go out of their way. now the only answer to this is you have to do something for them and i would argue there's really two good approaches to this the first approach it maybe three but the first one is think about ways that you can surprise and delight your customers now i'll give you an example of this.

6:45So the coffee one is a great example. You know, instead of the 10 punch card, Chewy sells dog food subscriptions. A lot of people subscribe to dog food. And what happens to everyone who has a dog? Well, they eventually pass away. And what happens when the dog passes away? Well, usually they forget to cancel their dog food subscription and they get an extra bag of dog food the month after their dog passes away. And it's hard to get it. It's painful, brings up memories of the dog. but usually when people call the pet food company they say oh yeah no problem send it back as long as it's unopened and we can refund it what does Chewy do they say you know what we'll refund you just keep it give it to someone who has a dog do anything you want with it and the person says oh wow thank you so much this is such a stress remover that I don't have to ship this back right now and then you know what else they do because Chewy has that customer's address they send them flowers I mean what does that cost$30 so they send them flowers because their dog passed away and what does everyone do who has a pet who has it passes away well within two years I think the stat is like 80 % of them buy another pet so they're where are they going to go they're probably going to be a chewy customer for life not because of the loyalty program not because the points they earned on their pet food but because of the flowers that got sent that complete gesture of kindness that wasn't expected okay now so here's the key it needs to be not expected and this is the difference between intrinsic and extrinsic motivation so if you have intrinsic motivation is you do something because you want to do it because you innately inside of you are motivated to do it extrinsic motivation is you're doing something because of an outside external force so to your kids clean your room and you'll get a cookie you'll get a special treat i'll take you out for dinner if you clean your room that's extrinsic motivation but inspiring your kid to have a clean room by maybe they will go over to their friend's house this actually happened to my kid they go over to their friend's house and they see that their friend has a really clean room and it inspires them and they come home and they want to clean their room not because you're offering them reward but because they're just intrinsically motivated okay so that's the difference between intrinsic and extrinsic now how do you get your customers to be intrinsically motivated to shop with you not extrinsically because of rewards and point systems and loyalty programs well gifts and acts of kindness are really probably the fastest way to get there there is other things you can do as a brand like your alignment with charitable causes and maybe what you do in the world and different things but like some type of act of kindness and so you think about your customer's buying journey.

9:51I guarantee you no matter what you sell, there's some point that you could inject some gift or act of kindness. That might be a month after they purchase or a week after they purchase. Imagine this. Imagine you're buying, I don't know, coffee. I'm going to use a coffee example for both of these. You bought a coffee maker and you have like a schedule thing that goes out and let's say you sell beads as well too so there's like a reason for your customers to come back there but one month after the coffee maker shipped you have an automatic phone call that gets scheduled and maybe it's you maybe it's an email but you say hey we noticed you bought this coffee maker a month ago there is this special add-on for milk frothing that that just came out and i noticed you didn't buy it i'd like to send it to you for free no questions asked the customer would be blown away what do you mean for free well we just noticed that you bought this coffee maker and there's this new addition and we just wanted you to have a great coffee experience that customer would be blown away i don't know what it what maybe it cost 20 bucks but that customer would be blown away and you would have a customer for life and now think about that as a marketing expense okay this is the problem is most people think, oh, I can't give things away.

11:12It grinds away at my profit, my cost of goods sold, but put it on your marketing line item, not your cost of goods sold line. Okay. So here's another great example. Imagine you have a subscription and you've got people subscribed to coffee. What if every once someone had been subscribed for three months or six months, some period of time, you sent them an extra bag of coffee and you put a little handwritten note in it and you can use tools like handy written or different ones to actually handwrite these notes out with a pen so it looks like you're handwriting and it actually is handwritten it's not it's not a printed but depending on how many subscribers have you could handwrite them yourself but the note would say something along the lines of like we hope you're we hope you're loving your coffee subscription I wanted to include an extra bag 100 % for free.

12:02Our hope is that you give it to a friend in your life that also loves coffee. We're trying so we can spread our passion for good, good roasted beans, something like that. And so now that customer, that subscriber is going to find someone who also loves coffee, give them a bag of coffee. And now maybe in that bag of coffee is another postcard of some sort with welcoming and telling them about the coffee, telling them about how the beans are grown, how they're roasted, the special treatment you do to them to get the special flavor. And there's a QR code to scan and get your first month free of a coffee subscription.

12:44That would be huge. now a that first customer that first existing subscriber is going to feel very grateful they're going to feel gratitude that that was just a surprise and you know what even if they keep that bag of coffee and they don't give it to a friend maybe they don't have a friend in their life that's also not the end of the world either that's a very nice gift that would probably keep them engaged at you know five to six months for a lot of subscription brands is where churn starts to happen so sending a gift out at that point is maybe a potential turn turn reducer so but what is that coffee customer going to do he's going to find someone else who loves coffee okay they're going to find the ideal customer profile for you they're not going to just give it to someone who doesn't drink coffee they're going to give it to their friend who loves coffee okay so So you're actually getting a super quality potential customer versus if you spend money on Instagram, you're going to get traffic.

13:43But the quality of that traffic and those customers, who knows what it is? They might not drink coffee. They might just be trying to quit coffee and they want to buy one more bag, but they're not going to be the perfect customer. But a friend giving a bag of coffee to someone who loves coffee is almost 100 % of the time going to be a perfect customer that you just now potentially will acquire for what is the cost? What is a bag of coffee? And just say it's$10. People are willing to spend$60,$70,$80 customer acquisition cost on Instagram, but they don't want to give away a$10 bag of coffee to acquire a customer.

14:23And what do you think the conversion is going to be on that QR code where it says, if you love this, try a subscription, never run out first months on us. It's going to be high. I'll tell you that right now. So you're getting an ideal customer profile, your ICP, also with the best form of an influencer. Now, influencer marketing, we know works. People on you follow on social media, you see what they buy, you buy it. Do you know what the number one type, the number one best influencer is? It's your best friend. There is no better conversion than your best friend recommending something to you like, oh, the skin lotion has been amazing.

15:06Oh, Ben, you should try this coffee. Oh, I'm trying this sleep vitamins. There's no better recommendation than a personal friend. So now you've got the highest value influencer giving to the most perfect ICP, ideal customer profile, who loves your, who are, who you know, loves that product or has a need for it. Maybe it's like skincare and they get another bottle and they give to someone like they've got a need for some skincare. Okay. So like this is just a bit of a, I guess a bit of a hack here. Maybe I'm kind of going on a tangent. So I'll wrap this up, but you're doing two things with this.

15:43you're creating a loyal customer and you're potentially getting a new customer so it's a win-win but even if you don't have subscriptions and you just sell products one time i would experiment with some type of a gift or an offer that goes out in some kind of an automated way like every time somebody you can run a report for all the orders of a certain product last month and then automate some kind of reach out to send them a gift. Do something. That is how you get true loyalty. Do something for your customers. I saw someone post the other day on LinkedIn. They were flying JetBlue and they sat down in their seat and there was a handwritten birthday card in the little flap in front of you or the pocket.

16:29And it said, happy birthday. What does it say? Something about being a mile high JetBlue. shoot I can't remember there was a catchy kind of like pun on it but anyways it said something like from all of us at JetBlue and they and they signed it the flight attendant signed it and they posted it on social media and this person wasn't sitting in first class they were backed by the bathroom and and they still the flight attendants left a handwritten card and I don't know how long that takes what do you think on the average flight there's maybe one person that has a birthday maybe two it doesn't happen that often they have the birthday information of all the passengers.

17:04That's a very easy thing to do. And it totally made that person's day. They posted about it. They will probably feel a bit more loyal towards JetBlue in the future. And when they're booking flights, they might lean towards booking with them because let's face it, often, I don't know about you, but I earn points with all the airlines. I choose the airlines not because of the points programs, but because of how I'm treated, how they treat me, what they do for me. One time a flight attendant gave me an extra pillow because they, oh, why? Just because they, I don't know, I was sleeping and I guess my head was on the side and they said, would you like an extra pillow?

17:37I'm only supposed to give one, but we have lots. Little things like that. So think about your customer's buying journey. Where can you inject some acts of kindness, some gifts? Oh, the last thing I want to say on this is often the number one time for this is when something goes wrong. Okay. So usually if someone just buys something, you go to a store, a coffee shop, actually this happened to me, I'm going to use a real example. If I just go to a coffee shop, I order my coffee and my sandwich and I get it and I eat it and it's good. I don't rave about it on the internet. I just, that's what I expected.

18:16Right. One time I went to a coffee shop, we went through a drive-thru. Uh, we got our coffees and we got sandwiches for the kids. it was actually my sister-in-law and it was all like in a bag we didn't open up the bag and we got home opened it up and it was missing two sandwiches and one of them was wrong I think they gave us someone else's order I don't even know but it was all messed up but we were at home and it was like 20 minutes away from the coffee shop and so she posted on twitter like the coffee shop is Tim Hortons up here in Canada. Thanks at Tim Hortons. You couldn't even get a sandwich order right.

18:56Now I have to drive back out to get dinner for the kids. Something along those lines. Well, what Tim Hortons did is they didn't just reply to the tweet and say, oh, I'm so sorry. It is our sincere apologies that this happens with, oh my gosh, those types of replies I just hate but you know what they did they dm'd her and they said we would love to drive the correct order to your house if you'll send us your address we'll have someone drive it over right away and she was floored and she gave him the address and one of the employees drove it to their house and i've personally told this story probably a hundred times i might have even told it on this podcast before she's probably told even more people and but that's an example of when something goes wrong it's an opportunity every single time a customer is mad at you sends an angry email in or something that is a perfect opportunity and i know it's tempting to want to lash back when someone emails in all caps and they're furious and it has been six days where the heck is my order can't you get anything right is it that are to put a product in the box and ship it out It said four days delivery on your website and it's now day six.

20:12Explain yourself. I did my son's birthday. We missed. I expect better. Like it's so easy to reply in an angry tone saying this is not our fault. UPS has it and I'm sorry we're not the delivery man. We shipped it. This is out of our hands. Here's UPS's phone number or you could take ownership and you could say I am so sorry about this. I'm going to tell you what I'm going to overnight one out right now. you keep that other one when it comes you give it away to someone else or oh i'm so sorry we missed your son's birthday is there anything we can do here's a gift card for nintendo online for him to download a game on us a 20 gift card i don't know games games can be 15 20 bucks but whatever that customer because the same type of customer that has strong emotions they say there's like people who hate hard love hard it's just those those like people who have strong emotions have them in both directions.

21:08And so often just when someone's angry, we think, oh, this is just an angry person. But they're actually not. They're just a strong emotion person. That same person can love your brand more than any other brand in the world. And that same person can hate your brand more than any other brand in the world. The people that are just indifferent and never email and aren't emotional about a brand, they probably, even if you do something super amazing from them, they might not go out of their way. But that person that does get angry, they probably will go out of their way and brag about you and be loyal for life.

21:46So don't discount angry customers. I'm telling you, I've seen it so many times. It's hard, but man, do they turn into great customers when you make something right. I'm sure you can think of times in your life too where something has gone wrong and that brand did something to make it right and went out of their way and you became a loyal customer for life. So that's it for today. Find ways that you can do good, give acts of kindness, something for your customers to create true loyalty. Go ahead, have loyalty points programs. I don't care, but I'm just telling you that doesn't create true loyalty.

22:24That might reward them for their actions that they're taking, but it doesn't create true loyalty. Find ways that you can do something, give something, some act of kindness for your customers, and that will create true loyalty. Okay, that's it for today. Thank you so much for listening. This was a little bit longer than normal, but I'm very passionate about this one. So thanks for staying here till the end. See you on the next one.