Ep #011 - Keep reducing friction in CX and try new things with Dean Bakes of Co-op Commerce

ben fisher -

Are you feeling subscription fatigue? With the subscription world getting more competitive, it takes more for brands to stand out. Rather than focusing on making a quick buck, brands need to recognize the need to promote long-term loyalty. That starts with simple things, like not pissing off your customers by shipping without warning, and ends with innovative tactics like data-based reminders and gifting programs. Dean Bakes, Chief of Staff for co-op commerce, has a long history of promoting customer acquisition and tech efficiencies for early-stage brands. He joined us on Subscription Radio to share his thoughts on transparency, customization, scaling, and more.

Show Topics

  • Focus on reducing friction
  • Customer loyalty and subscriptions go hand-in-hand
  • Make smart decisions as you scale
  • Bright ideas for subscription innovation

Show Links

Show Notes

4:15 - Three types of subscriptions

In Dean’s mind, subscription types fall into one of three buckets: media, ecommerce, and software.

“I think about them in three different buckets, the first is media. Obviously there's a litany of streaming services out there, and we're all using these services on a recurring basis to get our entertainment at the end of the day. Then you have things more like ecommerce-focused, which is what you Ben and Joel have been focused on for the lion's share of your careers, like working with CPG and brands that are moving into the subscription space and having their products, whether it's consumables. And then there's things like software, more of the B2B, B2C software platforms that are being built to ultimately serve these brands at the end of the day. And also end customers, maybe if you're thinking about FinTech and things of that nature. So many subscriptions. I have a ton across all three of those buckets.”

7:40 - Focus on reducing friction

The enemy of a good subscription is friction. The best DTC brands make it as easy as possible to efficiently update and skip orders.

“The things that I see in terms of success that brands are doing well is reducing the friction as much as possible. Giving customers the ability to easily and efficiently change, skip deliveries, change delivery schedules. I think the biggest pain point I have is really with a lot of subscription billing platforms that exist out there right now. They're just completely inefficient. And I know you guys probably know this better than most. If it takes me 15-20 minutes to change the delivery schedule, I almost don't want to buy from you anymore, let alone worry about trying to change my delivery cadence. So that customer experience is so valuable.”

9:26 - Be transparent about orders

For financial reasons, it’s tempting for brands to keep subscriptions on autopilot. But to avoid alienating customers, you need to keep them in the loop.

“The ones that I've been a little bit more keen on are brands that use things like SMS, if you opt into that. The ability to with a single text message like skip an order, or I want to delay it for a week. Also just being transparent about it. I hate getting a delivery for something that I didn't get a notification that it was coming in the first place. So if a brand can tell me, hey, in three days we're going to be triggering your subscription. You should probably take a look at it. That would be super helpful. Because I find it very frustrating when I just get an email that says, you've been charged again for this. And I'm like, oh, I didn't realize that. I think brands, it's almost like they want to omit it, because it's probably better for their revenue and top line. That being said, ultimately over the long term I think you're going to alienate a customer base by not being transparent upfront at the end of the day.”

10:59 - Customer loyalty and subscriptions go hand-in-hand

In order for brands to reach their full potential for success, they need to focus on serving the customer.

“As an investor, I want to see you go there. I want to see you unearth every possible avenue to make this customer a raving fan for your product. If you're not doing those things, then you're probably not going to be successful over the long term, especially now. In the world of consumer-branded products, the saturation level that we're currently experiencing is incredible. And it's daunting, especially for brands that are emerging right now. I think the future of brands will be based on how well can you serve this customer? Ultimately, subscription is embedded in loyalty and customer service. If you don't have great loyalty and customer service, you don't have a great customer service approach to the way that you think about subscription, I believe that you're probably not going to succeed to the extent that you would have otherwise.”

12:58 - Customization is an untapped market

Dean sees many brands try and go custom and give up due to cost and other difficulties. He thinks the market is ripe for a solution that caters to them.

“The companies that I've interfaced with that have said, ‘yes, we're not happy with XYZ third-party, we're going to build it on our own.’ I think it starts off with a lot of steam. I think it ends in, we can't do this. This is not efficient. This is not a good use of time. It's taking way too much capital. The experiences that I've had is building has been very prohibitive, and very difficult for brands to actually get over the line and accomplish. Also at the end of the day, I think as an investor, there's a massive opportunity that exists there to the opposite side of that coin. I think the majority of conversations I had were unhappy with the existing subset of offerings out there in the ecosystem. We've tried to build it on our own, but we're proving unsuccessful for a variety of reasons. We're dying to know if there's another solution out there. So that tells me that there's massive opportunity to build something that caters to these brands.”

22:34 - Customization leads to good CX

Shopify doesn’t allow for much customization yet, but Dean hopes the next iteration will include enhanced flexibility for brands to stand out.

“I think a big part of what we're trying to do is actually work really closely with Shopify to make strides in terms of ok, so this specific page on a Shopify website, it shouldn't be static for every single brand, no matter what service or third-party app that you use. You should have the ability to customize it. You should have the ability to create more of this unique user experience for your end customer. Because let's be honest, a lot of the best brands in the entire country are sitting on Shopify. Why wouldn't you want them to be able to create that more unique customer experience and engagement with that end customer? I think they're getting there. I think they've done a tremendous job with the app store and making all of those opportunities available. I think ultimately the next iteration of that will be, how can we make our infrastructure and the way brands work with us even more flexible? Maybe in terms of UI/UX, maybe in terms of design, maybe in terms of capabilities, whatever it might be.”

28:43 - Make smart decisions as you scale

It’s important to grow in a way that’s frictionless so the dev team and data access can keep up. Right now, it’s very difficult to move your brand from one platform to another.

“As you scale, you want to make it as frictionless as possible. How can you make this experience easy, repeatable, not a heavy lift on the dev team? That's something that we're thinking a lot about. I think the struggle is like the ease and all of the flexibility, and then also access to the data that we get via Shopify is tremendous. It's something that we don't get when we move outside of Shopify and start to move on to other platforms. Our integration is still super lightweight. Like it takes 30-45 minutes, but it will take more, a little bit more depth, attention, and engineering time when we're working with a custom build. But I think it's a problem that we're all facing to a certain extent right now. There is no easy way to move across from platform to platform and have a one-size-fits-all.”

33:33 - How co-op enables brand partnerships

Dead described how co-op is allowing brands to partner on the post-purchase page, resulting in net-new customer acquisition in a new and exciting way.

“The power of a net-new customer and the high-fidelity customer is very lucrative for a subscription brand. I think the interesting thing about co-op, and I don't want to take too much time talking about it, but we've essentially allowed brands, on the thank you page post-purchase, to seamlessly partner with other brands. The idea is that you check out, Ben, from your favorite website. And then we're going to give you recommendations on what you should buy next, the next brand that you're going to fall in love with. We do that through deep machine learning. The deep machine learning algorithm that we have based on where we sit at checkout, and the customer flow, and the transactions that we see, and also customer profiles. So we're actually able to give really relevant recommendations there. It's turning into an acquisition funnel as well.”

36:17 - Bright ideas for subscription innovation

Dean is interested in several new subscription tactics: the first two include a one-tap reorder feature and a data-based reminder system that tastefully nudges subscribers at the right time.

“I think having the ability to with one tap or one scan of a QR code be like, ‘Oh, I'm running low on this. I'm just going to immediately with a single tap and click reorder it so it can get delivered to my door’...Another thing is just the idea of a friendly nudge. How can you tap that customer based on what you're seeing? And there's a lot of data that you can end up adjusting to be able to justify this. But like you deliver this product, it's a 30 serving product. Based on your experience in the data you have, maybe you can make an assumption around when they might start to run out of that product. Gently nudge them, gently nudge them, get them to reorder. That becomes really interesting to me if you can do that effectively. And the last thing I'll mention is that I think there's an opportunity beyond just ‘Hey, buy from us and we'll give you a 10% discount.’ That's nice. It's table stakes now. Everybody knows it. There needs to be more attention paid to the customer and ultimately how they're interacting with you. Brands should be focused on creating a world that their customers aspire to and that they want in their lives, that they want to experience every day.”

38:56 - The gift of subscriptions

The third innovative tactic Dean has seen is a gifting/referral program, where subscribers can send an order to someone else versus canceling it.

“I'm also starting to see brands use gifting also. Let's say you're traveling and you're getting a subscription order delivered to you, and you're not going to be there to receive it. I've seen brands start to be like, ‘Hey, gift this to a friend if you're not going to be there to receive it.’ And it becomes a cool way for you to be like, oh yeah, like I'd love to surprise X, Y, Z with this product. I can't receive it this month, but maybe I can share it with a friend. Maybe they ended up loving it. Then maybe they end up being a customer. It's like a new kind of gifting-referral mechanism. Anyways, there's a lot of interesting thoughts that I think are really going to be cool to explore beyond just hey, let's lock you into a subscription on a monthly basis.”