Episode 248 Featuring Alex Bond

Increasing Lifetime Value with Daniel Budai

Increasing Lifetime Value with Daniel Budai

Daniel Budai is the Founder and CEO of Budai Media, a retention marketing agency that specializes in increasing the Lifetime Value for a brands' customers. After studying geology for six years, Daniel pivoted into the ecommerce space and has been quite successful since that change. Budai Media's expertise is in an omnichannel approach combining email with SMS marketing, AI, push notifications, and loyalty programs. They've had over 160 clients to date, including 2 Fortune 500 companies.

On this episode, Daniel and I talk about the value in loyalty programs, different practices to increase LTV, setting achievable milestones and goals, and much more.


What is Budai Media

Daniel Budai: Yeah, sure. So we are an eCommerce retention marketing agency and we started out in 2018. Now, five years ago, basically we want to help e commerce businesses grow by increasing the lifetime value of their customers, helping them to have more returning customers because many of them, they don't have that. They already have a customer base, but customers, they don't want to come back. And that's how we help them.

Driving Customer Loyalty and Lifetime Value: Effective Practices for Retention Marketing Success

Alex Bond: And so your emphasis is on retention marketing more than anything else. So what are some of the specific practices that you focus on for companies to raise that lifetime value? 

Daniel Budai: Sure. So, you know, it really depends on the level where they are. We work with even with a few startups up to actually now, so up to eight, even nine figures sometimes actually.

One of my team member just told me today we audited the Fortune 500 company, and I'm very happy for that. So we try to grab the attention of bigger companies as well. I think we are getting better and better with that. Obviously, those folks, they need very different things, but in general, we usually start with email marketing because the ROI is still the best with email marketing.

And once it's nailed, then we add other channels like SMS marketing, even physical mail, push notifications. We set up a loyalty program and we take care of the creative side, but also the technical side. And when it comes to a larger brand, usually where they struggle is really syncing the different channels, sometimes even simplifying things and they have too complex structure. So we help them with those. 

Alex Bond: No, that's great. I'm really interested in the loyalty program and the referral program. How exactly does that work? 

Daniel Budai: Sure. So loyalty is a great thing. I mean, the money is there. Unfortunately, many brands, they They think that if they install a loyalty app, it will do the work. They just expect that it's a plug in and play kind of thing, and you just plug it in, and it will make money. 

This couldn't be farther from the truth, because loyalty program is something where you really need a good strategy. So it's not just setting up something, sending some messages and wonderfully, you know, it will make money.

No, you need a solid strategy for a loyalty program. And I'm pretty sure everyone can name a few loyalty programs and subscriptions that you really like. And it really stands out. And it's probably not a 10. percent coupon code for your loyalty, because that's not too creative, right? So I think we can learn a lot from large brands.

What they do, they incentivize people to buy more. They reward that behavior. If you buy more, you can get points. You can get those points and you can use them later. But usually big brands do much more than that. So one example I really like is Nike. So for example, Nike, they reward the behavior that leads to purchase.

So prime example, they want you to run more. They have a running gap and people, they can compete. I never used the app to be honest, but I can imagine how this works. So people, they compete and, and athletes, they are usually competitive. So who runs faster, who runs more, and then they get more and more points.

And then they can try new collections of Nike and all of that. So they reward not the purchase directly, but the behavior that leads to purchase, which is running and it leads to more consumption. So that's something that not many brands do. I think everyone can really think about it, how to do it better.

Another thing is a referral program, which is part of loyalty. So you want to reward people who refer your brand to others. And you want to reward the person who refer, but also the new person who got referred. That's a big one as well. One more tip here. So you can make it a competition as well.  So you can make a leaderboard. Everyone gets points for a referral.

And people, they can see the public leaderboard where they are. And if they are on the top, they can get some huge reward. Like, I don't know, maybe you get new car for them if you have the money for that. But smaller company, I don't know, like a free travel to your to your HQ or something. So, of course. whatever you can afford. But yeah, that's just another idea. 

From Geology to eCommerce: Unveiling the Journey of a Passionate Entrepreneur

Alex Bond: So I am interested in how you kind of took six years in studying geology and converted that into being an e commerce founder and entrepreneur. Give me that art a little bit.

Daniel Budai: Yeah, sure. It's funny because yeah, indeed I studied geology for six years. Here in Europe at the beginning, I was shy to share it, you know, because it's so different and, and people, maybe they think that what the hell, how did you become a marketer and you must be a terrible marketer if you studied geology.

But recently I started embracing it more because nobody has this past in marketing. You know, I was young. I went to the uni. I wanted to have a career in the petroleum industry in the oil industry. I finished it in 2016 17 and I couldn't find a job. Oil prices were very down back then. It was more about layoffs back then than hiring in the industry.

Yeah, I just looked around and I actually found Upwork, the freelancer platform. I applied for a small gigs first as a copywriter. And that's how I got started. Since then, it's been, it's been a snowball, really. Like we got or I got bigger, bigger projects. After a while, I hired people and we became an agency.

Accelerating Customer Lifetime Value: Unveiling Daniel's 21-Day Guarantee for Brands

Alex Bond: Just to pivot a little bit, on your website, you essentially claim that, I don't want to use this word if, if it's not explicit, so you can correct me if I'm wrong. But you essentially guarantee brands that it'll only take 21 days to see the lifetime value of their customers increased by 20 to 50 percent. First question, is that a guarantee? 

Daniel Budai: Yeah, great question. So yeah, our setup usually takes three weeks. Yeah, we can see these increase. One thing I would add, so we don't guarantee this to everyone. We have a process to filter the people and businesses if we think it's achievable there for their business. 

But you know, if we can see that the answer is yes, when we have the first call, we always set a goal for every business that what is a realistic goal we can get. And we set that goal together with the client, and we try to achieve that. And then once we achieved it, we go beyond. We set new goals, but we are very goal driven. So we don't just do the job and that's it, but we go for the results. 

Alex Bond: And my follow up question to that is, how did you come up with those parameters? You know, for example, 20 to 50%, 21 days. How did you come up with kind of those milestones a little bit? 

Daniel Budai: Yeah, sure. So actually I'm not the person who does it. Our sales guy does it. And the beginning guy was very shy that he will you know, screw it up because that's a big, big promise. And if you don't keep the promise, that's a big problem, but actually he's been amazing with this.

So we hit the goals, I think around 90 percent of the times, which is crazy to think about, so we hit the goals that he sets for the team and I just watch it. And I think the key really is just. That we've been doing this for a long time, and we have a lot of data. We work with more than 160 companies now.

Yeah, I also asked my team, like, how you come up with these goals, and even they cannot explain it too well, you know? Like yeah, we just have the experience, we know the niches, we know if they have this and that, what we can expect to happen, and they just guess the number. So yeah, I think it's just all about experience and after it becomes your second nature to come up with the goals.

Alex Bond: Yeah. Once you've been doing that process enough where you're setting people down, you're asking the right questions, do brands come up with the goals more often or are you coming up with the goals or is it really just a total yin and yang process? 

Daniel Budai: Yeah, it's somewhat yin and yang, but I think we can say that we come up with the goals more precisely. Many brands, they don't know what they can expect though. So they tell us that, Hey, you are the experts come up with something, some numbers. 

And we do it's honestly, it's rare that they do. Many of them, they don't even know what numbers to, what KPI to follow, like this revenue number or open rates, engagement rates, so they don't even know that. So yeah, we help them quite much. I would say rather us who come up with these numbers. 

Alex Bond: What KPI should people be following? I've talked to a lot of people who have a lot of different opinions on that. 

Daniel Budai: Yeah, that's a huge topic, right? And yeah, so we usually come up with revenue numbers because end of the day, this is what matters, you know, and the profit many businesses, they don't share their profits.

So we don't bother them, but we focus on revenue. Another big topic nowadays is attribution. Like. Okay, your software says that email, SMS, these channels, they made, I don't know, 30 percent of revenue, but the attribution can be changed. How we, what's the base of that, but usually we have no issues with that.

So the client you know, trust the software we use and and we just follow those numbers. So also, I think we are conservative in terms of attribution. So the attribute sales, for example, for email, I know it's a bit technical, but for email, if somebody opened an email and they buy within five days, it's an email sale.

But on the sixth day, they are not anymore. But I know guys, agencies where they extend it to two months. Somebody opens an email and buys after 59 days, it's still an email sale. And I don't know, that's very not conservative, right? 

Alex Bond: Do you think they're trying to bolster or prove to their clients that this email service is working by extending that timeframe a little bit. So it kind of makes their you're kind of fudging their numbers is what I'm hearing you say, honestly. 

Daniel Budai: Yeah, definitely, definitely. And that's why attribution is a huge topic nowadays, because, of course, everyone wants to see that their software, their agency makes the money. You know, when I can see a business, they use five different software tools, five different agencies.

And I checked the dashboard of each, they claim these numbers. I add up the numbers and then I take a look at the bank account of the business or that total revenue, what they tell me, and it's half of that or one third of that. Yeah, everyone wants to say that, yeah, my agency, my software made the money.

Nobody is really true there or right there. That's why it's a big topic. But I think on our end, we are conservative. I think that's the right way in the long run. Because I can see companies saying that we made 70 60 percent of revenue of the business from email. But I don't know. Somebody must be screwed there. That's a too high number. 

Alex Bond: What is a realistic number that people should be pulling in from, from email? I mean, I hate to be asking for generalizations. But, you've been doing it for six years, email is kind of your bread and butter. What should, on average, an average company's pull be from email? Is it 40%? I mean, what should it be?

Daniel Budai: Of course, the first answer is it depends. It depends on a few things, but let's say average 20, 30, 40%, maybe 50%, but when it's more than that I'm very skeptical, like 60, 70. If somebody has those numbers. I asked them, okay, how much you spend on acquiring new customers? 

Because it looks like everyone comes back again and again from email. But how about new customers? You don't spend them. You don't want them or why it's so low that, you know, the other half. 

Strategic Focus: Maximizing Success or Transforming Weakness?

Alex Bond: And when it comes to attribution, right, I think that there's kind of two different trains of thought, and that's either to focus energy on the stuff that's working. And make sure that that's perfect.

Make sure that let's say my company is at an attribution of you know, 60 to 70 percent of people are coming in through email. I make sure that that is running like a well oiled machine because that's guaranteed money right there. That's kind of option A or where it's option B, where it's like, my email is only like 10, 15, 20%. I need to bolster that. 

So I guess my succinct version of that question to you, Daniel, is do you focus on the stuff that's working well and make sure that it's continuing to work well? Or do you focus on the stuff that isn't working as well and try to get it to the position that you're happy with?

Daniel Budai: Interesting question. I would say we focus on the things you are good at, you know? So first of all, I'm not the e commerce business owner. I don't do all marketing there, so they can decide about the strategy. We don't do their whole strategy. We just do that part that we are good at, which is retention.

And we focus on what we are the best at, you know, but I don't know if that answers your question, by the way, but I can see this many times that we achieve good numbers with the email already. 

And the problem is the acquisition side, which is not our job, but then we try to refer partners, other agencies or experts and, and have them with that. Because the two things are tied together. So they need new customers that they can retain later, and we can help them with the second. 

Exploring the Potential of Push Notifications

Alex Bond: Just to kind of switch gears a little bit in terms of the other services you offer, as you mentioned, the value of push notifications earlier, and I'm curious if you could kind of explain that a little bit. Is that simply push notification I get from getting an email or getting an SMS message, or what is that specifically that you're referring to? 

Daniel Budai: Yeah, yeah. Email and SMS are different things. And push is a third thing. Now we are talking about those messages that comes up on your phone, you know, the push notifications.

I know many people think it's annoying and it is, it can be. But it makes a shit ton of money. So you know, it works well. And also we can do it in a not too annoying way. So same with pop ups and, and SMS with all marketing channels, really. But what we do, so we use a push owl for this.

In most cases, it works with Shopify. We set up a few automations. So if somebody goes to the checkout with an item and they leave, they send them, we send them three abandoned card messages in three days. They get this on the phone. That's one example. Or if somebody buys, we send them two messages. We try to upsell new things.

So these are the automations. And we also send out manual campaigns, especially when there is a holiday. Let's say it's Black Friday. We send out three push messages in one week with different offers. So, you know, these are small messages, short, very short messages. Everyone has to opt in on the website. So they give their consent to receive those messages.

And after we send these, I would say it's not a huge rainmaker, you know, so email SMS much bigger lawyer, even loyalty is much bigger, but it's a kind of easy money because not many companies do it. It's a very cheap to send push to people. We have a case study. We made, I think, 50, 000 for a, it's like 1 percent of their revenue, 1 or 2%. So it's not huge, but it's very profitable. And it's just really money found on the table. 

Alex Bond: Because that's something that you automate, you know, it's the only, I don't know, kind of manual labor is to sit there and automate the service and write the copy. So that that one or two percent that's coming in is literally just one person that's writing copy at the end of the day.

Daniel Budai: Yeah, we had one guy from India. I asked him. He seemed to be, you know, interested and smart enough. And I told him, Hey, if you could have this client look into this, then every, it's a win win for everyone, and he learned it, he did it, I think he still does it, so we even have a video about this on YouTube, it's almost one hour, a tutorial, and he shares how everyone can do it, so. Yeah, push is really money found on the table. 

Alex Bond
Alex Bond

Meet Alex Bond—a seasoned multimedia producer with experience in television, music, podcasts, music videos, and advertising. Alex is a creative problem solver with a track record of overseeing high-quality media productions. He's a co-founder of the music production company Too Indecent, and he also hosted the podcast "Get in the Herd," which was voted "Best Local Podcast of 2020" by the Richmond Times-Dispatch in Virginia, USA.

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