Brandon Amoroso is the Founder and CEO of Electriq Marketing, a retention and growth agency. During our conversation, we discuss how to retain clients, the impact of subscription programs, tactics to improve LTV, the correlation between Generation Z and growing business trends, and much more.
Brandon Amoroso: I'm the founder and president of Electriq. We're a Shopify Plus agency. Got about 45 team members spread across the US specializing in retention marketing.
I started that back in mid 2019, just about when I was graduating for about a year and a half. Before that, I was just freelancing for small Shopify businesses in and around the LA area. And then for the past three years, we've just been growing and [00:01:00] scaling, learning a whole lot along the way.
And we were acquired at the end of April of this year by beverage technology company that helps launch Shopify for wine at the end of July. And so my time now is sort of split 50 50 between the agency and working with the drinks team and Shopify around the regulatory tech compliance solution that we built with them to be able power alcohol merchants in the US to ship direct to consumer on Shopify. So that's the quick tl;dr.
It is embedded into Shopify's checkout, the tax and compliance solution. It's not drop shipping. It basically enables wineries and retailers across the US to be able to use Shopify to ship direct to consumer because every state all the way down to the zip code has its own unique rules and requirements for shipping alcohol.
So historically there wasn't a solution on Shopify that allowed merchants to be able to do everything they needed to. If you are ordering alcohol and you happen to be in California, or if you're in Michigan, there's volume limits in terms of like you can't order more than a certain amount from a winery or retailer ship direct to your home in a given time period.
So all that needs to be in place and enabled for merchants to compliantly sell alcohol online.
Conversational Commerce with Attentive SMS Marketing
Alex Bond: I wanted to talk about conversational commerce with attentive SMS marketing. So could you, on a very base level, explain what SMS marketing is and how you guys use it in your marketing strategy?
Brandon Amoroso: Yes. I mean, more and more brands are diversifying their marketing tech stack from email to include SMS marketing as well. So just in the same place that you would be like texting your friends, brands can now get opt-in from consumers who give them their phone number to be able to text them directly.
And so a lot of the work that we do of our brands is around how do you create an integrated email and SMS marketing strategy, especially for customers who are gonna be subscribed to you in both channel. And there are two very different forms of communication, obviously. I mean, email, people are used to getting tens. If not, I've seen some inboxes, hundreds of emails a day.
People just go through delete, delete unsubscribed rates are not necessarily as quick or as high, whereas sms, you have significantly higher clickthrough rates. It's a much more personal form of communication as well.
Alex Bond: So how do you get away for the subscribers of these emails in this s m s marketing to actually engage in productive and meaningful way.
Brandon Amoroso: Yeah, so one of those ways is to leverage things like conversational commerce. What conversational commerce is in SMS marketing is the ability to send like a prompt to a customer that's automated, and depending on how they reply, it will branch them down a different response path.
And so simple example of this would be setting up like a coffee quiz via text. So somebody joins the SMS marketing program. They get a text that says, hey, like we want to know what type of coffee you like to drink. Reply one if its light coffee, reply two if its medium, reply three if its dark coffee. Then they reply it branches 'em down one of three paths.
And then we can hit them with another question, which is, do you prefer ground or holding? Reply one for ground, reply two for holding. And then depending on how they reply, it also branches them down a different path all the way until we give them a product re recommendation. At the end of that series of questions, the, their responses are also saved as data points on their customer profile in the SMS marketing platform.
So then in the future, I know like John, like dark coffee and he likes it ground, so why would I send him campaign or text around whole bean in light coffee if I know he likes dark and ground? That's really the two most effective ways that we've found to be able to leverage SMS marketing is that conversational commerce component where you're like leading people to a product recommendation, but then moving forward, you can use that data for segmentation and personalization as well.
Why an eCommerce brand should have a subscription program
Alex Bond: So nowadays it's kind of like you know, business models are either pretty much subscription or non-subscription. Which one do you think is more appropriate an e-commerce brand that should have a subscription model or should not?
Brandon Amoroso: I think most brands should have both. I don't like the companies that are subscription only typically, especially when it's like a very, very incentivized first order. So get like 50% off your first order and then you get auto enrolled into the subscription or get your first order for free and then everything else is at the standard price.
Especially because it's sort of, if you do have the ability to purchase one shot orders, it almost forces you into why would I ever. Try this product unless it's on a subscription. But as soon as you're on that subscription, if you churn off the subscription, you're much less likely to ever come back as a customer than if you're just a one shot customer who forgets to place their next order or who comes ends up having like different tastes or preferences.
So I think it's important to have both avenues and something we've been looking at more and more are actually like membership programs. So you pay, like, is it kind of like Amazon Prime or you pay a given amount per month or per year for special, like perks, discounts features, benefits and so on. And so that's actually an interesting model because then you can not have people on the traditional subscription, but still getting the benefits in perks that would usually be associated with a subscription program.
I just think it's important to have both avenues, both the one shot and the subscription, because not every customer wants to be on a subscription. But some people really enjoy having that subscription component set and forget and easy to manage is super important. If you make it very convoluted and difficult for people to be able to manage their own subscription, you're ultimately gonna end up with a lot of dissatisfied customers.
We actually see that the lifetime value of customers who do like skip an order or take an action on their account, even if it might seem counterintuitive, like, oh, they're gonna, they're skipping an order. We're gonna have a less, less LTV from that customer. It's the opposite because of the fact that they're engaging with the program and they're able to easily manage it.
Alex Bond: Yeah. So why do you think it's critical to audit your subscription experience?
Brandon Amoroso: Because you can't just set and forget these things if you do. There's always gonna be something that comes up, whether it's like core functionality that's not working, which is obviously like a critical error or just ways that you could extend or improve it, and so I think it's important whether it's subscription or just your general website experience to audit that either every month or every other month, just to make sure that you're going through the process.
Making sure it's as seamless as possible. You wanna reduce friction as much as you can, and so it's important to continue to audit that experience. Sure. You're looking for things that are mission critical, like, oh, can they process the payment on the website? But beyond that, it's more about how can we improve it?
Alex Bond: How do you do that? Like specifically? Honestly, while being thorough.
Brandon Amoroso: So our encompasses a lot of different things. One of it is tech stack. Like if you're not set up on the right tech stack, it's gonna be very difficult to create and implement really robust retention strategies for your customers. So that's one of the things that we look at first and foremost.
Second is analyzing the data. So what does the repeat purchase rate look like? What does the lifetime value of our customers look like? Trending in a positive direction or not. And then a lot of it can come from customer feedback as well. So having things in place like a post-purchase survey. How did your website experience go? Is there anything we can improve?
And for people that do end up canceling their subscription, getting a cancellation reason from them, whether it's this product is too expensive or my taste changed, or whatever it may be, that can help inform the things that we need to work on for that program.
Because if 500 people cancel and 400 of 'em are saying that the product's too expensive, and maybe we need to think about either changing, pressing, or we need to think about perhaps we. acquiring the right customer for this particular product.
Proven Subscription Retention and LTV Tactics
Alex Bond: So let's say that you do lose a customer. They fill out your survey, they say, you know, it's too many ads, or it doesn't pertain to me. Whatever they say is that customer now just lost. You'll never be able to get 'em back. How can you actually get them back after, say they might have a bad experience or they kind of floated away.
Brandon Amoroso: Yeah, so if they cancel, we always have like a cancellation win back flow. Whether it's incentivizing them to come back with an additional discount or some sort of messaging around that, and then they'll sort of live in a segment in our CRM platform that is canceled subscription customers.
And so we know that they used to be on a subscription, they're not anymore. And so we'll communicate with them differently in our campaigns and one time messaging that goes out in the future, but it is significantly harder to get them back than it is to stay a one shot customer who just happened to forget the order in the past, like 90 days or hundred 20 days, and then hitting them with messaging, reminding them to do so.
And that's why it's so important to have sort of like cancellation retention tactics in place within your portal so that somebody logs in, they go to cancel a subscription, and then they select the reason this is too expensive. Maybe you surface a popup that shows, hey, actually we'll give you. 10% off for the rest of your subscription.
If you stay active, just click this button or whatever. They click it, great. They've been retained, they don't, and it's gonna be significantly harder to get them to come back. So there's a lot of things sort of in the platform that we wanna put in place to try and make it as sticky as possible.
Alex Bond: No, that's smart. So when it comes to your competition or other brands, what are some things that they mistake or get wrong about loyalty programs?
Brandon Amoroso: Yeah, so loyalty programs are tricky because a lot of brands have just sort of thrown them up on their website. There's a lot of plug and place solutions on Shopify, for example, that allow you to stand up a loyalty program pretty easily.
But if it's not embedded into the actual like customer journey and it's more so just sort of thrown up there and you're not going to get the adoption that you need from your customers in order for it to sort of prove out it's worth. It needs to be in the checkout process. It needs to be in your like customer welcome email.
You need to have it in your transactional communications. You need to remind people in the campaigns and messages that they get sent, hey, you have this much store credit left, or you have this much, this many points left or, hey, you actually haven't created an account. Go create one because this is all the things that you're not going to get access to.
And you just throw it up there like the little widget in the bottom left corner of your site? It's not really gonna do anything. There's been sort of mixed mess. I'd say there's been messaging around like an increase in retention in LTV just as a byproduct of adding a loyalty program to your site.
But that's not the case. The only way to truly get that is to leverage it as a way in your email, sms, push direct mail communications to get customers back to the site and engaging with it. If you don't have all those pieces in place, then it's just gonna be an expensive software that's sitting on your site that's not really doing a whole lot for you.
Growing DTC businesses using customer lifecycle as a focus, rather than customer acquisition
Alex Bond: And I wanna build on that a little bit. So, you know, I was talking with Nigel Thomas, you know, our last episode. He was much more motivated on customer retention rather than customer acquisition. How do we grow DTC businesses using kind of like customer life cycle as a focus rather than customer acquisition?
Brandon Amoroso: Yeah, so more and more you're seeing a transition to retention because the cost of acquiring customers getting so much more expensive, you really need to be, especially as there's more and more like competition in any given category, there has to be a focus on how do we like differentiate ourselves. The rest of the competition and having a really strong LTV is a great signal of business help because it means your customers are coming back, they're buying from you, enjoy the product.
I'd rather have a higher CAC and a higher LTV than a lower CAC and a lower LTV. Because the higher LTV shows that you are a brand that people want to continue to purchase from, and you're attracting higher quality customers as well. And also, the more LTV you can get, the more wiggle room you have to test when it comes to acquiring customers.
Because if your LTV is $500, whether you're acquiring customers for $50 or a hundred, there's more flexibility in room there to test with different media channel to go out and say we're gonna do like a strategic deployment of a direct mail campaign to see if that might have some legs. The higher LTV, the easier life just gets across the board.
Gen Z vs. Millenial workplace culture
Alex Bond: We've heard a lot about right around now, generation Z has started entering the workplace. I'm a millennial, but generation Z started to enter the workplace. We hear a lot about it on, you know, finance, news and whatnot. Not a lot of information is given about Generation Z building workplaces and businesses that go against I assume you're also a millennial.
Brandon Amoroso: I'm actually in the Gen Z category.
Alex Bond: You are in the Gen Z category. Amazing. All right, that's perfect. So you're on the other side of it. So how do we kind of parse through that then? So what has your strategy been? Is there kind of like a certain way of thinking that you align to that Generation Z doesn't align to, or kind of what are your thoughts on, you know, that cultural significance?
Brandon Amoroso: The easiest way to to think about it is, it's just a non-traditional sort of workplace and environment that I think we typically thrive in and we have higher expectations around what we should be accountable for and contributing to the larger sum of the company.
At least for me, that was one of the reasons why I wanted to start Electriq is I didn't wanna be sort of boxed into a narrow scope and role within a giant organization that was hesitant to change or didn't really look towards people with less experience as maybe their opinion isn't as valuable.
Here really just need to focus on like training and getting that experience before you can have a seat at the table, which for me, it has less to do with experience and more about who's wanting to put in the work and effort and has nice, like sort of good and innovative ideas. That's what I value more than anything.
It could be 15 years old or a hundred, it doesn't really matter. And I think having a combination of those different viewpoints and experiences is also important as well. Like if you have a team of just a bunch of 55 year olds, or if you have a team of just a bunch of 20 year olds, you're going to sort of not have that full perspective from a generational standpoint that I think is important because different generations inter interact and engage with things in different ways.
Alex Bond: So what I'm hearing you say, Brandon, is that you're an advocate for diversity.
Brandon Amoroso: Yes. Just in everything I think is important, but I also don't think it makes sense to like force yourself to have it either. Because like when we went about hiring for Electriq, it was sort of who's the best fit in terms of skill and capabilities and who's the best fit in terms of culture.
However, everything else fell. It just happened to be that because of the fact that we went about hiring in that way, we ended up with a very like, sort of unique creative and diverse team.
Alex Bond: So have you noticed any sort of like specific trends in terms of ways of thinking between, you know, your generation, millennials, generation? in the workplace, or is it really more solution focused? Are there any sort of obstacles that come with diversity?
Brandon Amoroso: Work has meant different things for different generations, especially now where work is, I feel like it's becoming almost a little bit less of employees identities. Because they're remote and so it's not like you're going into this office every week at five clocking and clocking out. Which I think I had. I think it has pros and cons.
Pros being really a lot of flexibility. It rewards those that are self-starters and are able to be autonomous. Cons being, it's very difficult, I think to have like really strong collaboration if you don't have any in-person interaction. Just humans in general. Bond and have shared experiences that are physical.
So if you only ever see somebody over a screen it's difficult to feel like you're truly a part of something. So I think those are the biggest differences that I've seen.
DTC, Shopify ecosystem, and eCommerce tech stacks
Alex Bond: I like that. I think that's pretty insightful. I agree. Frankly. And to kind of expound on that, you know, while we're looking at cultural trends, the great resignation or the big quit has kind of been something that we've seen in the last year, year and a half. I wanna get your thoughts on one, why you think that is kind of the place that we're at right now?
You know, where we have a lot of industries that feel like they're not, I personally feel like they're not understanding how to fundamentally make these changes in the workplace culture. That's a part of the factor. Could you kind of explain, you know, other parts of that factor and how it comes to an end essentially?
Brandon Amoroso: I think it varies from industry to industry. I had an internship in college, for example, at a Fortune 500 company in an industry that only had like three or four businesses. So there wasn't a ton of competition. The cost to get up and running in that field. I'm talking like billions of dollars of capital investment that would be required because of the physical sort of plants that they needed to do all the manufacturing.
And so that is an industry where I think the sort of the pressure to continue to innovate and change is almost nonexistent because. You. It's not like e-commerce where you have thousands and thousands of brands constantly innovating, pushing the needle forward, trying to compete with one another. I mean, you had like three legitimate players in the space and that's it.
So in that sense, I think industry spec, it's very industry specific. Sure. I think they benefit a lot from changing things, but at the same time, they had an employee base that looked significantly different. My employees do at a lecture, like most of the people there had been there for 20, 25 years.
They had their systems, they had their processes would the friction that somebody coming in pushing through some of these more like open workplace environment changes? Cause would that be more detrimental even though you would be getting some value from it? Like there were things there that they didn't have automated that should have been automated like five or 10 years ago.
And I brought that to the table. Just things that you could plug into like a formula, like let's say theoretically you had a set of I'm trying to think of the best way to describe it. But let's say you had a roll of paper that was like 300 inches and you needed to cut it down into, I don't know, two 80 inch, but then three 40 inch. And then how do you make up the rest of it and how do you get it to be with as much yield as possible so that you're not losing any of that paper?
And so it's important you have to build, like cut it up into the right sizes at the manufacturing plant. Now you can't possibly begin to tell me that a human being should be the one deciding what that optimal cut looks like. It should be plugged into like a MATLAB or something that can go through all the various things and here's how you get maximum yield based off of the requirements that you have.
And that's just one example, but you also can't vault them for it because they're a very successful, ginormous company. A lot of money every year. It's sort of it's just one of those things.
Alex Bond: Do you see that as a growing trend in companies where, you know, there there are some that are so big that they have the finances to be innovative and push the boundaries and get into a space that maybe they always haven't been? Or do you more see it as if it's not broke, don't fix it when it it comes to a lot of these companies?
Brandon Amoroso: There's ways that you can sort of do both because you don't wanna disrupt existing business processes that are working well, but you do want to constantly be like testing and iterating. So you can think of it the same way as you think of like an e-commerce website.
Maybe you run a test and you only send five or 10% of your site traffic to that test. Then if it works, Then you open it up to a larger sample size and then maybe you roll it out to the entire thing. That's the same way that I would think about innovating in a very large company that has a lot to lose you.
Let's just say it's like a thousand person marketing agency. You want to test a potential like new onboarding process. Do it with a small sample size, see how it works before deciding to roll it out to the entire organization. Whereas on our side, we're not ginormous. So being at 45 team members, we have less risk, like less innovation risk, whereas much larger sort of established industry players are going to have that. And so there's a blessing and a curse to that.
Alex Bond: I think that makes a lot of sense. And you have a little more freedom of mobility, if you will, to kind of like be a little dangerous and try different things and be innovative.
Brandon Amoroso: And that's what we lean into as well. Like, you're not gonna work with us. We have 20 years of experience and we have this very like laser focused to defined almost corporate like structure. You're going to work with us because we're innovative. We're pushing the needle. We bring new insights and ideas to the table. So that is what we lean into.
Alex Bond: Anything we haven't talked about that's one of these cool innovations that you're really trying to push the boundaries of a little bit? Or is there a tight lid on that?
Brandon Amoroso: I guess I mean, there's multiple things that we're trying to innovate on, whether it's from technology perspective or it's from just the way that we interact and engage with clients to the way that we onboard new team members ourselves. We're just trying to make all of our processes as efficient and as valuable as possible, and so with that, really just a constant need and desire for continual improvement, which is something that we try to instill across the entire team.
And just because something is going well doesn't mean it can't be improved. And just because you're being onboarded to this new agency and we already have all these existing processes, doesn't mean that you shouldn't ever question them. And I think that's where a lot of organizations go astray, especially the larger they get.
You bring on new team members, here's how we do things, this is how we do it. And there isn't that sort of point made where. You should be thinking about whether or not there is still a way that we could potentially change this or improve it. So I'm very specific with any of our new hires that just because this is the way that we're doing things now, whether it's your onboarding process or the way that we're interfacing with clients, doesn't mean that it can't be tweaked or optimized to provide a better experience.
So something I like to do on like a quarterly or biannual basis is just get every team member to submit two to three things that we're not doing that we should be. And then that allows me to get really more than like 140 different ideas around everything from continuing education resources to the company should potentially be looking at paying for this, like work from home stipend to here's how we could better improve our onboarding process.
And from that, not only are we getting a lot of buy-in from the team as well, the executive team is hearing our ideas. For me, it helps a lot. I'm not as close to the day-to-day of some of these things anymore. And so to be able to get that feedback directly and to foster that sort of organizational culture of openness is really important and has allowed us to continue to be successful east even as we've grown in size.
Future of Electriq
Brandon Amoroso: I think we're going to continue to use Electriq as a sort of breeding and testing ground for new ideas and development within the Shopify space, and it's really important for us to be at the cutting edge of trends and technologies that we can then bring over to the drink side of things.
So the company that acquired us, being able to help the alcohol industry understand best practices when it comes to eCommerce and how there are parallels between the work that we've done historically with like CPG brands and what you'd look at as more traditionally digitally native companies versus the alcohol industry, which historically has lagged behind when it comes to direct consumer adoption, eCommerce tools and technologies.
There's a wide variety of reasons for that that we don't need to get into, but basically what I'm focused on is how do we help this industry modernize. It's online experience and be able to better direct with its customers one-to-one.