Adam Pearce is the Co-founder and CEO of Blend Commerce, the eCommerce Customer Experience Agency. Adam and his team have worked with over 200 Shopify retailers to help them provide memorable customer experiences that drive growth in revenue and profit. Adam and I talk about Customer Value Optimization, how to elevate the customer experience, design trends, and much more.
What is Blend Commerce
Adam Pearce: So I guess the big difference with Blend is that there are a lot of agencies out there that will work specifically on things like conversion, re-optimization, and that's all good stuff. It's all good work. But what we found is that working with clients over the course of the past, sort of seven or eight years, is that when it comes to trying to improve the conversion rate, particularly the Shopify store, the problem that a lot of brands have is that they need to have a part, a way of coming up with ideas.
And what we do at Blend is that we use something called convert customer value optimization. And what this basically means is that yes, we do the usual conversion rate optimization activities. But with that, we do a lot of qualitative and quantitative research behind that. That then gives these brands tons and tons of different ideas that we can then implement for them. So that's, I guess, the big difference of what we do is that we're kind of an ideas generator as well as a CRO implementer.
Customer Value Optimization
Alex Bond: So can you kind of break down exactly what customer value optimization is? A little bit more specifically because frankly, for me personally, I'd never even heard of that, you know, strategy or metric until I started to do some research on you guys. So, yeah can you break that down for me a little bit?
Adam Pearce: Yeah, absolutely. I mean, look, we're on an e-commerce, we don't really need another acronym, but hey, I'm gonna throw the park. Essentially what CVO is customer value optimization, it is about saying, for an e-commerce store five, 10 years ago, the focus was all about, we need to bring customs to the site.
We need to get 'em to convert, we need to get 'em to buy. And then kind of, we left them to it. Now, obviously, fast forward, what's happened is everyone knows it's more expensive. It's more difficult to get customs to the site. So if it is more expensive, you need to be doing things on the store that are gonna help keep people there for longer.
And what I mean longer, what I mean by that is that. Increasing the lifetime value of that customer. So CVO, what it does is says, okay, in terms of the Shopify store we have right now when it comes to the onsite marketing, the offsite marketing, what are we doing to give that customer a better experience?
That's gonna mean they're gonna come back for the second, third, fourth time, rather than just trying to get 'em across that credit card payment fee for the first time around. So it's more long-term focus. Then just bring the traffic in, convert them, and then say goodbye.
CVO vs. CRO
Alex Bond: No, I think that makes a lot of sense. So you mentioned already some of the differences between conversion rate optimization or CVO and, I'm sorry, customer value optimization, conversion rate optimization, is one specifically better than the other? Because it sounds like from your experience and the way that Blend is run, you like focusing more on CVO, so you know, why is that specifically?
Adam Pearce: Yeah, I mean, the way I'd describe it is that CRO is a tool that fits within CVO. So I guess, you know, if we look at from that perspective, kind of CVO is the umbrella at the top, and then the tools that you've got under that umbrella are, one is conversion re optimization. The other one is qualitative research.
So things like jobs to be done, surveys, RFM segmentation, and then you've also got, then on top of that, then your kind of retention marketing, so things that are connected with email marketing, SMS, all of those kind of sit under CVO.
So I guess, the way we look at it is that, look, we love CRO, we think conversion optimization is great, but it's only actually one of the tools that brand needs to be using when we're kind of in this period whereby actually we need to focus more on the lifetime value of that customer rather than just kind of the here and now. And that's getting across the payment line.
Alex Bond: And one of the things that I like about, at least what I'm hearing you say, CVO, is that it feels kind of like you're treating customers a little bit more individually instead of with broad strokes and as data sets or general demographics, that feels like a more intimate experience, is that kind of the point essentially is creating a more human to human relationship there?
Adam Pearce: You're banging the money there, Alex, because I think, you know, look, the key thing that drives CVO is RFM segmentation. So, hey, another acronym, but recency, frequency and monetary for those guys that they haven't heard about before.
All that essentially means is that rather than, I guess, kind of the good old days where we would, you know, say our ideal customer is Susan from Ohio, who's got three kids and two dogs, what we're saying is actually now we're looking at how recently did they last buy, how frequently they're purchased, what their monetary value is.
And on top of that, what are the things that they've done on site in their marketing that give us different signals? So we actually group customers on that basis and then market to them both from retention, marketing and also acquisition marketing based on that, because I think a lot of brands have have kind of switched onto this.
If you think about the bigger brands now, they are not thinking about, you know, targeting just that. Man or woman or whoever, which, you know, demographic person it is actually the thing that they need to, the job that they need to do. So, you know, if you think about Apple for example, you know, Apple's always a good example to look at the marketing of their iPhone.
The most recent one has actually been a mother who's running around the house trying tie the house up, get the kids ready for school, go and do a job. They're shown the durability of it. So what they're saying is this is a phone, not necessarily just for a mother.
But actually someone who's on the go, who needs that durability, who needs something that's actually gonna stay with them and work well under kind of all these different circumstances. And that's kind of, you know, I guess the vein that we're going down here is that what do those individual groups need rather than based on, you know, kind of traditional sort of gender stereotypes.
Alex Bond: Just to add to that also someone who multitasks or something like that I feel like that's a very, very mother thing as well. And Apple's very famous for, so let's say I've been running a business or a brand and have had a conversion rate optimized mindset, is it decently easy to kind of transition into a CVO from a CRO, or how complicated is that? Because I feel like that's what we're gearing up to.
And again, this is something I hadn't heard before until the day with my very limited knowledge at that. But I can imagine that you being customer experience focused, are paying attention to market trends, customer trends and things like that. So it might behoove us to talk about being able to kind of convert, you know, a brand's business model in mid lifetime a little bit.
Adam Pearce: Yeah. I mean, look, it's definitely a challenge that we come across when we talk to new potential clients because we've had the past 10 or 15 years, everything that we do, being obsessed with conversion rate, you know, your site has gotta convert app between 2.8 and 3%. You know, the usual rhetoric that we kind of, you know, that everyone hears.
But the thing is, when we actually show clients what we do, we use something called the e-Commerce Growth Formula. And what this basically does is that it takes their core metrics, one of which of course is conversion rate, and then we look at all of the different factors like the gross margin. The purchase frequency, their retention rate, and then we boil that all down into their overall lifetime value number.
Now, what this basis shows is that, and when we play around the numbers, for example, if you increase your conversion rate by 10%, this is the impact it's gonna have on LTV. If you increase your AOV by 10%. This is the impact you have on your LTV. So what it does very quickly is it shows in some instances that conversion rate isn't actually the key driver for the long term health of the business.
And that's kind of the way that we approach it of ultimately we have a job, like you said, Alex, you know, no one's really heard of CVO yet. So we, we are in this position where we have to show people and educate people why this is a worthwhile way of thinking. I think, you know, look, clients that come on with us who get it immediately, that's great.
But what you've always got is that, you know, I was talking to a brand the other day, a big UK based strengths brand. They've got four or five people in the meeting. Someone is coming from an acquisition perspective. Someone's coming from retention perspective, someone's coming from a commercial perspective and someone from a brand perspective, that when it becomes difficult because everyone has got a slightly different opinion of what the most important metric is.
But what we have to do is show them with CVO, there's actually something for everyone. In that number, and ultimately it is, you know, it is about the margin and the ratio of that LTV number to the cost of acquisition.
So ultimately those two things, it doesn't matter whether your acquisition, commercial retention side, there's gonna be something in it for you rather than, I guess, you know, with CRO pure. Where it's like, right, it's all about conversion. It's all about getting them from meta to the site and getting 'em to convert.
Alex Bond: It's really fascinating, so I appreciate you educating me on this, and I don't mean to totally beat it to death, but one of the things that I've read is it's about growing that relationship with the client over time.
So, you know, customer value. It doesn't exactly mean how great is our relationship to this specific customer or this type of customer. It's how great can it be? And I think those are kind of two interesting distinguishing factors. It's not kind of like judging where we're at, it's judging what we can or should be. Is that accurate?
Adam Pearce: Absolutely. So it's definitely about looking ahead in terms of the actual implementation, the things you can do. I guess kinda the way of thinking is that, look, if you let's take I guess kind of a typical, you know, Shopify store that is focused on conversion optimization, and then a store that is focused on cbo o and for example, let's take an apparel brand.
Now, most apparel brands, if it's CRO focused, what's gonna happen is you're gonna go to the site and at some point they're gonna try and get you to sign up to their mailing list. And to do that, what they'll do is, they'll give you a 10% discount by signing up. That's the typical kind of play that we, you would have.
You were thinking about a CVO play. What you'd be thinking about here is that when that customer comes to site, we need to do a couple of things here. Well, we need to gauge interest, which is what CRO does, but secondly, what other data can we extract from that customer to then potentially retain them for a longer period?
So rather than maybe a 10% offer for signup, that will maybe me a popup, which takes to an onsite quiz. It would ask you about your favorite colors. It would ask you about your size. It would ask you about brands that you liked. And then off the back of that, then it would recommend you on screen a number of different products that fit exactly what you're looking for. All that data then will go over to email platform.
We use Klaviyo, obviously either is available, but what Klaviyo would then do is personalize your welcome flow by only showing you products that were in your size, in the colors that you want. Using the brands that you want. So that, I guess for me is a good way to kind of explain the difference in the mindset is that you are playing from the outset to have that customer as a long-term customer to sell more to rather than a pure, right.
Let's get the email address. Let's just try and sell, sell, sell, product, product, product. And that's why there is a little bit of resistance sometime because it feels like a longer play. And it is, but ultimately it's one that's gonna be more profitable for that business. Particularly when, you know, cost for acquisition is so, so high at the moment.
Services that they offer
Alex Bond: I wanted to talk about the nitty gritty a little bit in terms of specifically what services that Blend provides.
Adam Pearce: So we provide to our clients our managed CVO service. So what does that actually mean? Well, okay. It will usually start out, but we will tend to do a pretty significant audit of everything that's happening in that business.
So looking at obviously the metrics for the store, the design of the store, how users are experiencing it, the marketing of that business, and from that, then what we'll say is right here is a list of priorities of things that you guys need to do on site, and we'll prioritize those using something with a PTI framework.
And all that basically means is that we're prioritizing on how, how easy something is and what the impact of it is, and then how effective we think that's gonna be. So that's the first step. After that, then on a month-to-month basis, what we'll be doing is starting with the highest priority task. And you know, that might be, for example, something as significant as redesigning the product page.
It might be actually something as minimal of actually changing the configuration of a couple of apps. So we are working through those and then month to month what we're doing, we're tracking back and saying, right, based on the changes that we've made here, what have been the impact on the metrics that form LTV?
So for some clients it might be, look, we're look at seeing an uplifting conversion rate because that's the most important metric. Drive LTV, others AOV, others purchase frequency. And in terms of implementation, we obviously do the design work, the development work, and also work on the email and s m s marketing as well.
So not only, you know, is it okay the analysis at the start, it's then implementation tracking back to that, and then continually helping to reprioritize what is most important and what's working. So it's kind of something, you know, that that ebbs and flows it moves.
It's not just, you know, kind of clients come in, we have a list of things we're gonna do, and then we do them over six months. That list will change. Because we'll see different things happening. We'll have different priorities, and it's just a bit more kind of free flowing in that respect.
How Blend Commerce started
Alex Bond: And I like kind of that you have your arm in these different camps of what I'm hearing is design, marketing and growth development. So it's nice that, you know, you can't just blame one of those other things because you're kind of helping all three of those you designed the site.
So it's not like, it's not doing as well as it should. And the client's like hey, the design you did is, is it really working? And you go, oh, that's the marketing agency that you can't really pass the buck, is what I'm trying to say. Was that by design and how you started the company?
Adam Pearce: No, not at all. I mean, look, me and my business partner starting an agency the way most dumb agency owners do, and they sit around the table and go, hey, we can do an agency. It does everything. We'll do SEO, we'll do PPC, we'll do design. And then, you know, you kind of realize after about three months that you're not a magician.
You would actually also like to be able to sleep at night. And you kind of sort, sort that niching down and times Alex look for the first, you know, year or so. That's what we did and we were just like, look, we can't do this. So we then moved into kind of just doing development work and design work.
And then as time went on, Shopify when we started was kind of, its infancy. Brands obviously got bigger and we need to be more flexible. So we kind of went through a monthly retainer model. So, hey, here's a list of things. Go and do them. We'll report back. And then, yeah, about 18 months ago, we were like, look again.
The market's changing. The brands are changing in what they need. There was a shift because of everything that was happening with Facebook and Meta and iOS and all this stuff, and it was like actually this kind of acquisition cheap traffic heyday is going. We need to have something that's more long-term focused. And yeah, as I say, about 18 months ago, we kind of switched to this mentality of CVO.
Alex Bond: One of the things that I appreciate about essentially your brand's pitch is that it's described as a customer experience agency in terms of services you provide for clients. So what made you decide that that customer experience should be your foundation instead of something very simple that a lot of places do, which is, you know, Growth or sales or marketing? What was the decision there?
Adam Pearce: A lot of that was really down to what we were hearing from both existing clients and also prospects when we were kind of talking to them in calls, because I think prior to that period, we had this kind of boom of drop shipping, you know, 5, 6, 7 years ago. And in that time everyone was very product focused.
It's all about how do we increase sales for now? What do we do with the site to increase conversion on this particular product? And then you start getting these brands that start doing very well with kind of things like community building getting them to be longer term customers. And because of that, we then say, well, actually our clients are asking us about this.
Well, what do we do about these customers who, you know, have only bought from us once? We keep seeing this trend that people buy a second product. And then they, they go away. And what we brought that down to is that it was actually what that customer experience was about. We knew Klaviyo, we knew it very well.
We knew design, we knew development. So we just said, actually, we need to now, Rather than just go down this kind of very, you know, focused right? Get them in, get 'em converting, build out actually for a customer, a better experience on site, that's then gonna give our current customers and these prospects what they want to hear.
So rather than saying, look, we're gonna increase your conversion rate from 3% to 4%, you know, what we'd be saying is, look what we're gonna do. Is actually make sure that the customers that are dropping off at the third purchase don't drop off. And we're gonna do that with a combination of different landing pages, email marketing s m s. So in all honesty, it, was plain to what the market wanted to hear.
Developing a relationship between a brand and a customer
Alex Bond: And I think that what you've tapped into is trying to figure out what the customer wants. A little bit more when that's your priority, honestly, is I feel like you end up learning more about the customer.
So I know that this is already gonna be a difficult question, but in extremely general terms, what has your experience shown that customers value when wanting to develop a relationship between a brand and a customer?
Adam Pearce: I think it's a really good point, and what I would say on that is that customers in my mind and what we've seen, is that they want to know that the brand that they're dealing with is speaking directly to them.
I have a bit of a problem with the term personalization. It automatically makes you think of this like creepy email saying, Hey Adam, buy this stuff. I need saw them, but I didn't luckily the thingy for me is, though, is that when you think about relationships that the best brands build, it starts off by, first of all, them getting information from that customer.
So it's about, for example, making sure that when you have a site, what you're doing is that you are giving them an easy way to navigate around the site. Main thing with the most Shopify stores is the navigation sucks. If you can sort your navigation out onto a winner straight away, so showing the customer you're there for them.
The second thing is then if you can use zero party data, so things like, you know, using a quiz, having a pop-up that asks for more than just an email address or, or a name that then enables you to then go and personalize so that they then get from an email or SMS perspective?
For me, it's just about making sure that anything that goes to that customer, whether it be onsite or via marketing, is giving them relevant information, relevant products to them that is actually going to give them something new to think about or an idea.
Rather than it just being right sell product, product, product, product. So two-way communication on your marketing, two-way communication on your site. Things like having little NPSs surveys. Brilliant. Because what it means is that, again, you can get the, you know, the kind of sense checker for where people are fitting about the site far too often.
You know, look, I've been in marketing for 15 odd years. I think, you know, when I started it was very much about marketing was kind of a broadcast channel. There was this confusion between marketing and advertising. And I think what a lot of the smart companies realize is that marketing has always been about a conversation about data going both ways. And that's how I think the best Shopify brands are winning.
Most common Shopify store design problems
Alex Bond: And look, it sounds like if Buzzfeed's taught us anything, it's that people love taking quizzes and if, you know, thousands of years of human sociology and psychology has told us anything, it's that. People love talking about themselves, so it's also like all you have to do is put it out there and people are practically giving you free increase in sales.
You just have to give them the option of these popup quizzes and things like that. And it's extremely valuable, you know, and, and you already touched on, on one thing. And that's essentially that you specialize in Shopify design among, it's made among your many services, which makes sense cause of the customer experience being your forte.
So what are those specific design problems, the big ones that you see in Shopify stores that could lead to lower than projected sales?
Adam Pearce: By far, product page. Product pages are always poorly designed. I think the problem is that there's kind of two general extremes, product pages. One is that some brands view the product page as a place where people are simply gonna check out and what they believe is that actually all the information, the great information that is on your homepage, on your about us page, about things like guarantees, how the product's made, where the product's made, celebrities that have used that product should stay elsewhere.
And you get this very blunt product page, which has, you know, frankly, a very poor product description and buy now. Now the thing is 99% of ads that we see running to sites go to that product page. So for me, it'd be like, you know, I've got a house that I'm renovating, I've done up the living room that's all fancy with a beautiful sofa, and I've taken 'em out the back to the kitchen. There's still some 1960s awful kitchen.
Why would you do that? And that's the simple thing like people send it to the brother page and they're like, yeah, but we've got a beautiful homepage. Your customer coming from Facebook doesn't care. They're not clicking around, they're making that decision in about three seconds. They look at product edge, get as terrible. So I think that's the one extreme, especially.
Alex Bond: Not to cut you off too much, but because I personally go to the homepage anyway, no matter where an ad sends me, I end up just clicking the logo and going back to the homepage. Cause I'm not gonna buy a product if I don't even know about your company off the bat.
Adam Pearce: Exactly. And I guess that's the thing that saying you, what you're looking for there is. You are trying to do that due diligence on that company in your mind about whether they're trustworthy, whether the product's any good, whether actually you desire it and you need all of those factors shown to you on the homepage in a very neat and concise way.
So you want to be able to get that information in and, and it, you know, it really does tend to be very poorly executed, but on the other hand, you get the other side where everything is very over-engineered. And I'm sure people have seen this. You go to a site and particularly sites that do subscriptions are appalling at this.
It's like build a bundle, subscribe and save Now subscribe and save for a month, subscribe and save for three months, subscribe and save for 12 months. And you get this some product pages where it's like there are four or five different options and that's even before you've selected the product and the canes you want to own.
Then you get to how you're gonna pay. You can use Afterpay, you can use all these different options. So I think for me it's, there's lots of times when if you don't design the product page, either you over design it, you over, you know, increase the functionality too much, you put people off.
And secondly, if you don't do enough, You kind of left in no man's land. So for me that, that product page, it's gotta be clear, it's gotta give the the right feels that your homepage will give and it's gotta have a very clear process of buying that product don't need over complication of actually what that process is gonna be to buy the product.
Alex Bond: Sounds like it's a lot of involvement and balance there. I've read in one of your case studies on your website, That you installed a heat map essentially onto your client's website to understand more specifically how customers were, were navigating their page, and what improvements could be made on the site, is that something that you guys typically do with your clients, or do you use that as kind of a proverbial black light to help you find a problem that might be harder to see, you know?
Adam Pearce: Yeah, I mean it's definitely used as that kind of way to kind of illuminate some of the things that there, because the usual process will be is that, look, our UI/UX team will go through the site and say, right from a best practice perspective.
There are some things here we can see already that just simply shouldn't be the case. But then what you do is ultimately that is, you know, a hypothesis in the head about best practice. We all know about best practices. They are the best practice known at that period for a group, but it doesn't work for everyone.
So you put those heat maps on site and you do two things. One is that you either clarify, Or actually you get rid of that hypothesis that the team has had about the site that something isn't working. The second thing you do is that you always find stuff that you'd never even thought about. And it's things like, for example, you know, you will have a very random, small call to action put on a homepage that is taken to a blog, which then actually has people exiting from the site.
What a lot of the time happens is that that has been put on there as a bit of a nice to have, but it actually then goes and kills your conversion rate because you're navigating someone to a piece of content that isn't relevant. So it's all these little bits and pieces that you find out from doing that heat mapping, you know, and when you've got that significant level of traffic, it's well worth doing that as kind of, you know, initial step to work out where you are.
When you've got a lower level of traffic, look, you, you need to rely on best practices. But you know, when you are certainly, you know, getting up to those, you know, sort of thousands and thousands of views each day, heat mapping absolutely must.
Customer experience design trends
Alex Bond: So speaking of trends, I imagine, again, being in customer experience, that's something that is continuously changing and evolving is where and how customers are comfortable. You know, navigating a website. So where do you see design trends going in terms of customer experience?
Adam Pearce: Yeah, I mean, the thing for me is that, yeah, if we think about two things, one, generally the way people are shopping and secondly in terms of kind of Gen Z and the way that they're shopping, because they are gonna be, you know, one of the most profitable sections to sell to.
Generally speaking, I think that during the pandemic there was a real big change in expectations from companies. Customers were expecting cus companies to communicate with them on multiple channels. They're expecting them to deliver to them, give them lots of different delivery options. So the expectation of what an online store can do and how you can communicate them is vastly different to what it was maybe three or four years ago.
So in terms of the trend, brands that are using things like, obviously like they have their Shopify store, but then for all different types of customers, they're using Amazon. They've also got the ability to shop via TikTok. They've got the ability to shop via Instagram, and customers will bounce around these different channels depending on where they are.
From a market's point of view, that's a headache because you know, we. In marketing. Look, we love silos. Don't we know that's the Instagram traffic, that's the Shopify store traffic. Well, unfortunately, customers aren't playing ball in that way anymore. They'll go wherever they want to be. So from a design point of view, all of your different sales channels need to have this consistent feel about them.
And when I say consistent feel, yes it's the branding, but it's also that experience that they're gonna get. So if for example, you are selling, you know, a product that gives you subscribe and save. You're gonna wanna be offering that on the Shopify store. You're also gonna want to give, be given that opportunity on Instagram.
And if they decide one day when they're flicking through Instagram that they wanna change their subscription, you're gonna need to give 'em the ability from Instagram to get through and change that. They get frustrated when they can't communicate you in the ways that they want to. So I think that's the first one on the Gen Z thing.
I think, you know, look, again, the thing is here is that Gen Z are a lot more informed. Their expectations are very high of brands. They have a very high awareness of I think kind of social responsibility of companies, and I think a lot of brands at the moment haven't quite caught up to where their kind of standards will be.
So again, from a design point of view, we used to talk about trust indicators. So you know, things like, for example, guarantees, shipping times, all those kind of things with Gen Z. That's still there, but you also need to think about things now that are, you know, related specifically to the carbon footprint of that product, the impact of your delivery, sustainability efforts that are happening within the business.
So all of those things. Also need to come into your trust indicators for your product rather than just, you know, look, made in the USA, handcrafted, all those things we would've used maybe, you know, again, 5, 6, 7 years ago are changing in terms of what people wanna see on that product page.