Hello and welcome to another episode, the winning of Shop 5
podcast. It is Tuesday, so it's Tuesday.
Tea Break talks with me, your host Nick Truman.
Great to be back. I say back, you probably haven't
noticed that much of a gap because there's been lots of
episodes. I've recorded one in weeks and
you're probably wondering why I'm sitting in this random room
and why my microphone doesn't sound as good as possible.
One of our clients, Big Yellow Stories, has currently got all
of our stuff in a storage unit. We are between offices.
I'm in a temporary office here in our new building.
So anyway, you don't care about any of that.
I just look and sound slightly different.
Not as good as normal because I've not got my fancy funky
cameras. Anyway, a couple of quick
announcements. If you are a brand with a cool
story, there's no charge to have you on the show.
I want you to come on, I want to talk to you, meet you,
understand what you guys do as a business.
So please reach out to us. Hello at Winning with
shopify.com. All one word.
Hello at Winning with shopify.com.
Send us an e-mail to say, hey, this is our brand story or
here's a really cool story we've got.
We'd love to come on the show for one of your episodes.
We're pretty busy, but I always like to put the net out because
there are weeks where we're not busy and there's some really
cool brands out there that we want to talk to.
Final announcement before I get into talking about how to scale
LTV quickly and cheaply and possibly for free.
We're going to be at Sub Summit in a few weeks time and Byron
and I, I am just going to check because I want to get the dates
right for this. We are in America.
We're normally based in the UK. Sub Summit is on the 13th and
14th of May. So if you're near Kansas, want
to come to Kansas or you're available or you're not
available, you should come to Kansas for Sub Summit.
We're going to be there. We're hosting the podcast stage,
which is going to be awesome. I've got an incredible panel of
CEOs that I'm going to be interviewing for one of our
episodes in the show, which you'll hear about on the show
and there's loads of other stuff going on.
There's a gig happening. We are also with our partners
Tax Cloud. We are sponsoring A7 AM run,
which is fine for me because it will be I think 1:00 PM in the
UK. I'll be wide awake, but at 7:00
we're going to go for a little run around Kansas before one of
the days of the show as well. So make sure you get involved.
If you're coming to Sub Summit and you're a tech company,
you're a brand, you're a piece of software, you're an agency,
send me a message. I've still got quite a free,
I've got a lot of stuff in my diary, but I've got a few slots
and we're going to be there for just over a week as well.
So plenty of time to come meet you guys and chat and have
coffee. I love coffee, I love whiskey
and I like combining the two on occasions as well.
So if you don't have a coffee or whiskey with me, let me know.
I'm going to be there, which I'm slightly nervous to say because
there are, there are literally thousands, sometimes 10s of
thousands of you that tune into this.
I only have so much time, but if enough of you around, we might
organise something as well. Anyway, let's talk about scaling
LTVLTVS lifetime value if you've never heard of that acronym
before. And one of the things I find,
and I've moaned about this in the show a few months, a couple
of probably 2, maybe three months ago, and lots of you guys
reached out about this. So I thought I'm going to do
another episode. The main thing you guys were
asking me is what are some actual examples of how I could
scale up lifetime value? Well, one of the biggest ways
you can do that is through subscriptions.
Tying it in nicely to Sub Summit, Subscription Summit,
where we're going to be, I want to talk about some of the
subscriptions you could run that will scale up LTV cheaply,
quickly and possibly for free as well.
And this is where bearing in my, my agency and, and I, we look at
all the mechanics of a business. And one of the things we look at
when we're pitching, when we're working with a company is we
bring these customers in through PPCSCO.
Are you getting more orders from them?
Are you getting more money from them?
Or was the only money you received from them was the money
you got when they made their first order through us?
Because actually we're the hardest and most expensive part
of the equation. That's why we do what we do.
We're very good at it, but it's a lot easier for you to get a
second, third, 4th order. Even easier if they're on a
subscription. So here are nine ways you could
run subscriptions for businesses that you wouldn't expect
necessarily to see a subscription model.
And then I've got 4 examples of four specific types of company
and subscriptions that they could or I've seen be run for
those businesses and run successfully my I ad as well.
So let's go through these #1 you can, when you've got what I call
dead stock, free dead stock, which is where you've bought an
item, it's sitting in your warehouse.
You can't sell it. It's just money locked in that
item in that corner of the warehouse.
Start putting those items because you're going to lose
them anyway and you can get the warehouse space back as an
absolute last resort. Start putting them in orders.
Just say with a little little slip saying, well, you know,
maybe sell the tape to the side of that item going.
And here's a free item from us. So you've ordered all of these
things that are in the box. Here's a free item from us.
Do not send out all of those items on the same day because if
someone likes one of them, you want to be able to let them come
back and purchase more of them. So some of them you might still
sell and you might find that putting it in for free in a box
you're already paying or have been paid for by the customers
to deliver, you can get rid of some of that stock and get
people buying some of it. So maybe send out like 10% of
them and see if you get any other orders.
Send out another 10%, see if you get any orders.
If nothing, just send them all out.
But if you do, I get some orders, then we could start
working out mechanics again. If we include these to say you
were selling a protein powder, you might give a free supplement
of another protein powder that nobody seems to be buying.
Put one in and say hey, these are all milk based.
But if you tried a vegan one, like try the flavour of this and
it's just one, one sachet of this vegan 1 you can try and
then e-mail them afterwards with a discount code going.
And if you want to buy more of it, here it goes.
Suddenly you've sold some stock or maybe you've made some profit
on the stock that was otherwise dead and you're gaining
warehouse space back for stuff that you know, I just need more
space because I can sell that stuff really, really quickly #2
these are these are getting more common and these are pretty
cool. VIP membership.
You can offer discounts, free delivery, member only items.
I on the member only items. I'll read out the last one
because there's just one more on the list.
Higher loyalty points accumulation.
So if you get 2 points per dollar you spend maybe when
you're on the VIP membership you get 3 points or instead of 10
you get 11 or 12. You can say you get 20% more
points if you join our VIP membership.
The VIP membership could be over a certain threshold.
It could be $20.00 a month, it could be $100 for the whole
year, which might make people enough of a saving.
You've already paid for half of that making the initial order
because of the discount. But on the member only items, I
would still advertise these. I would still put these on,
promote them on SEO. I'd still push them out on
e-mail and when someone the pages you have to be a member to
buy this item because it's AVIP, you know, it's part of our
silver range or our gold range of items.
You have to be a member. Membership is cheap and there's
lots of reasons why you should sign up.
One of them being is you get you can buy this item.
You can't buy this item unless you're a member.
Why? Because you need a care kit or
something or you don't need to specify a why just so you have
to be a member. Seasonal members drops are quite
popular as well as #3 back to school preparation for
Christmas. So you could do like a, you
know, this is a, if we say you're a baby business, we know
your baby was born around this around a certain time.
We know that your first order of all the things you'd buy when
you're having your first baby or a new baby, you ordered those
eight months ago. So we know they're coming up to
their first birthday. So why not send a here's our
recommended bundle kit. And that is a good way to
increase lifetime value and get to come buy a second item.
But at the same time, if they are a member, you could say to
them you can customise your own box.
We'll let you know what the discount is.
So if you join our membership, which is quite cool, these ones
#4 these are so popular. John from Battle Box talks about
these quite a lot. A few of our clients do these
because a few of the clients have sent me these boxes and
they're mystery boxes. So that's where you subscribe to
a box. And what the retailer can do is
say this is a mystery box and the mystery box costs, I don't
know, you can get one every month, every three months.
You can change the frequency of it, but say it costs $100, but
we guarantee we're going to put $250 worth of products in the
mystery box. When you're buying stock now,
you've already got the buyer because they're buying those,
they're subscribed to the mystery box program.
And again, it could be every month, every three months, every
six months, once a year, whatever frequency works for
them. But because they're subscribed,
you've already got the buyer before you buy the stock.
And also, if you buy a load of stock for whatever reason and it
doesn't sell, Chuck some of them in the mystery box. 1 of the
biggest reasons I find, and I should have said this earlier,
one of the biggest reasons I find asking our clients about
dead stock is that I find a lot of dead stock is dead because
they've bought something and not enough people have bought it to
get reviews and understand that it's a good product to get more
people to buy it. It's a bit chicken and egg.
No one wants to buy a product that nobody's bought and
reviewed, but someone needs to buy it first to get the the
reviews and, and, and also for you to tweak the product if it's
a new product. So actually a mystery box is a
great way to get some products out in circulation.
People are already subscribed to those products and because
they're already subscribed, you're not paying Google, Meta
and other places to get the order in.
I feel like I'm doing my own agency a real disservice.
It the more of this you do, the more we can spend per new
customer. And that's where it really works
for us. But the mystery box is so
powerful. All your old stock mixing, some
well known items, some less bought items, but also include
at least two or three kind of premium items.
One of the mystery boxes I got a few months ago also had a bag in
the mystery box. So it was a physical, it was a
cardboard box. This one.
You could also do a metal box or something, maybe a metal box in
your first one. And then you can keep all the
items from future cardboard mystery boxes in the metal box.
It makes it part of their bathroom, their kitchen, their
lounge, wherever they use the product or even part of their
car if it's scents for, you know, car air fresheners and
different scents you can have in the car and stuff.
But one of the things I thought was interesting is there was a
bag that was like this is like the the luxury bag.
So there's loads of items in here, but the two or three items
in the luxury bag are the really premium ones and you're getting
them at such a good discount. So those are the great items you
can include in there. Number 5.
This one's obvious like refill and replacement a lot.
That's where subscription's normally found, right?
You've run out of coffee, you put it on a subscription, more
coffee. Turns out skin care's a good
one. But even within those you could
also have the mystery box. I mentioned the previous point,
but here's a good example. And so clothing, how do you do a
subscription if you sell clothing care kits for clothes?
And this is a really interesting one.
They sell literally millions of these on Amazon every month
across the world. And that is my wife likes
lavender for this and it's a scent or a little bag you can
put in the wardrobe and it keeps all your clothes smelling nice.
And that bag is going to need to be replaced every few months.
And also you want one in every wardrobe, every drawer.
And look how much of A modern man I am learning about putting
cents in my wardrobe. But it does actually make it
smell really nice. There's anything I've learned.
My wife is always right. But something like that runs
out. So you could say, well, just
subscribe to one a month and we'll tell you which one is the
oldest. So the oldest one was the
Magnolia one you've got over there.
So now that one needs to now be thrown away because it would
have lost its scent. And here's a new one.
And so it might be 5 lbs a month, but now you've got £60 a
year just coming in automatically, which means
people are engaging with your content, which means you can
e-mail them, which means you can upsell clothes and other stuff.
And, and in particular, you can then post content to them and
say actually Lavender's best for a wardrobe, Magnolia's best for
a draw. I'm making these up.
But in terms of the actual scent, but you get the ideas.
You guys can advise on that, but also care clip kits for clothes.
This as well, I think is a really, really, really good one.
Number six, this one's really, really powerful and there are
some brands I've worked with that do this really well.
They have the same items as everybody else.
So you can see like this item's worth $50 and everyone's selling
it at $50. That's the retail price but then
they offer a member only pricing at like $35.00.
But to be a member you have to sign up for and it's best to do
an annual membership I find rather than monthly because
monthly they'll just stop it if they don't use it for a month or
two. Annual, if you just say it's
$100 for the whole year, they're on for a whole year.
Now you're getting emails all year saying, you know, you've
got this membership. You get discounts at our store,
come buy stuff from us, not from anyone else because you get the
discount and it's a way you can discount without affecting the
retail price. Again, check with all your
suppliers because rules around these things.
But again, that member only pricing is amazing.
That can either be on a subscription where it's like
$100 a year and you get member only pricing for the whole year
and you'll make your money back in your first order or two.
But now you've got every reason to e-mail them and say hey,
come, you've got the member discounts come and buy from us,
not anyone else. The other thing you could do,
because you could set a threshold and as soon as
someone's placed an order, you can e-mail them and say look,
you spent $350.00 today, but if you spend $500 in a single year,
you get this. There's a massive retail brand,
lovely retail brand, one of the oldest.
I don't think the oldest should be one of the most loved retail
brands in the UK called John Lewis.
And they do a thing that as soon as you've spent, I think it's
100 or £150 a year, you get things like extended warranty, a
free cup of coffee when you go into any of their department
stores and a free slice of cake and stuff like that.
So again, and sorry if I keep scratching my nose, it is my hay
fever is terrible at the moment, absolutely terrible.
But John Lewis have that, that whole scheme of once you've
spent over a certain amount as a customer per year scanning your
loyalty card, then you get those member discounts, which again is
a very good way of encouraging people saying you're already 78%
of the way there. Just go and spend a bit more.
And now they've made a second order.
The 2nd order is probably the most powerful order they just
make. Trying to get someone to go from
one order to 2 is really difficult.
Two to three, Well, you've already bought from us twice.
Come by again. And also if you said your second
order's taking you over the threshold, you now get member
10% off everything or 15% off everything and you get free
delivery and all these other things.
There's reasons why you need to come back to us now.
So again, it's incredibly powerful way of engaging
customers. Early access, member runs for
new products, seasonal pushes, Black Friday sales, spring,
summer sale, end of season sale. If you have a big thing saying
you have to be a member to access this non member access
happens in seven days time. And then the big announcement
comes out of like 60% of our end of line sales stuff has gone or
60% of Black Friday's already sold out.
But now it's available to everybody.
It was member, it was premium members or subscription members
only until now. Again, a really powerful way of
convincing people you should join the membership.
And if anything, you're actually just going, we're going to run a
sale, but we're going to push it out to people on the memberships
as a reason to have a membership and the membership costs money
or encourage people to buy more. You're going to make more
revenue doing the same thing and the sales going to be way more
successful. The problem with sale as well, I
find is if you have sales members only, then you have to
be a member. So you're already engaged with
that brand to some point. If you just run a sale on Google
Ads, Meta ads, you're just cutting your margins.
So instead of a four to one ROI, if you take 25% off, you now
need a 5 to 1 ROI to make the same money as before, but you're
losing more stock in the process.
So you see that the principles are much more difficult.
Whereas if you can only be a member after your first
purchase, and we only talk about membership after your first
purchase, then people have to go make a purchase.
You make your ROI on the initial purchase at full price.
Now you're offering discounts so that you don't have to pay the
advertising channels. Again, much more, much more
productive and much more profitable last couple then.
So you start a subscription on the replacement.
This is interesting, I think because I, I bought a lovely
mattress a few years ago and I said to my wife, like we've got
another room and the mattress there is horrible, but we've got
our guests staying. So why don't we move our
mattress to the spare room now and buy a new one.
And she said we can, but they're like hundreds of pounds.
Like, you know, if we buy a really nice one, it could be
thousands of pounds. That's a lot of money.
And I suddenly had this thought if when I bought my initial
mattress, they had said, we're going to give you 25% off your
next mattress in five years time because in, because five years
is the, you know, minimum warranty and expected life of
the, of a mattress that's used every day.
I think even me saying that's probably news to a lot of you
guys that actually mattresses do expire after a while and they
actually become slightly unhealthy.
They get full of dust, which is bad for your lungs.
So if you have bad asthma, you need to change the mattress and
do very more frequently. Do you see all these things?
So if the mattress company spoke about that and actually said,
why don't you just start a 10 or £20 a month subscription now
that builds up. And once you've got 75% of the
value of a pot, which we estimate will be in five years
time. And once you've got, you know,
your, it's £10 a month for five years and then you get 25
percent of your next mattress. Just start now because it's a
big purchase you're making today and you've just made it and
you've just spent £800 on a mattress, for example, why not
start a £10 a month subscription towards your next mattress?
That's really, really smart. And also if you do that, if you
start that subscription when you're 6 months in, we'll send
you 2 free pillows as well. And so we're throwing all the
stuffing so we don't have to pay the advertising costs, but we're
already locking you into your next mattress purchase in the
future. Well, you're not going to go
anywhere else when you've already paid for even nought .1%
of this mattress. As soon as you've started paying
for it, you're coming back to make that purchase in a few
years time. So it's really, really smart.
And then you could also say, and if you want it now, why don't
you just get the second one on zero percent finance.
You've got 2 mattresses for your house or one of your friends
could get it on 0% finance now and we'll give you the, we'll
give you 15% off instead of 25% off the dealer.
So there's some really, really smart deals.
You like that? Try and keep it simple though.
There's a lot of things I've just said and it can get very
complicated very, very quickly. Final one on this list and I'll
give you some examples of four brands.
They've been doing some awful brand types and some interesting
stuff that I've found. Last one is a recycle program.
So you can send your item back after X months or years and
we'll swap it for a new one. If so, for example, if if it's a
£500 item and after a year it's it's lost 80% of its value so
it's now worth $100. You could say well why don't you
just start a 10 LB subscription in 10 months we'll swap the item
for you and again give you a discount.
Or in six months we'll swap the item or six months we'll send
the next one out. But I've seen brands do this
before where they say why not just start a £50 or $50.00 a
month subscription to us and once your pot reaches £300 you
can spend £400 worth of stuff for £300.
But you can do that every six months because you're putting 50
lbs of dollars into into the pot if you like, say it works like a
savings scheme. So you're already saving up.
What they're really doing is saying, why don't you just start
buying your next product now and giving us the money now, which
means, but when you come to buy the item, you're not choosing
between US and another retailer. You're definitely coming to us
and we're going to give you a financial reward as a thank you
for doing that. So that recycle program as well
can work well of just, we'll send the item back and we'll
give you 20 or 30% off your next item, which also means if it's
an item of clothing or a pair of shoes or something, there's now
a space on your shoe rack, There's a space in your wardrobe
because you've sent us one of the items and now we're going to
send one back. You can even say we'll send you
the new item before you've sent yours back and then we'll refund
you the $20 difference or whatever it might be.
So you go nine ways to quickly increase LTV, mostly around
subscriptions. Check out these then as a as an
interesting upsell. And I've tried to choose a few
things you wouldn't buy regularly.
OK, or one of them you would, but the other three you probably
wouldn't buy that regularly. So first one's furniture, you
don't buy furniture that regularly.
So if I've just bought a new table or coffee table or
something, why would I go back to that furniture retailer?
Well, I'll tell you what if they said here is here is a
screenshot with wax Polish on the wooden table and here's a
screenshot without a picture without it.
I don't say screenshot a picture with the wax Polish on and a
picture without. And you should rewax this table
every month to make it look this good.
Look at look at the quality of the wood.
It's also really hard to mark. It's going to last longer and
look at the finish. And also, if you throw coffee on
the one that's got wax on, it won't damage the table because
it's got wax on it. You can just wipe some of the
wax away and it will take the coffee stain off with it.
And then just put some more wax on.
But subscribe and every three months we'll send you some fresh
wax or maybe the wax comes in like a one wax kit and we'll
send you a every six months we'll send you a new six wax kit
to keep the keep the table looking good and over.
And we'll send you demo videos on how to use the wax and all
that sort of stuff. And now you've got customers on
subscription which means you can subtly start talking about the
other products. Jewellery, same thing, Polish.
I've been meaning to get my wedding ring re polished for
years and I didn't even think until I was getting ready for
recording this episode. Now I could buy a Polish kit and
do it itself. Like I haven't.
I haven't googled it yet, I just thought about it.
But would I? Would I even need to take it to
a jewellers? Which is what I was thinking in
my head is the only time I did get it polished was just before
we got married. Had it fully polished and it
looked beautiful and I haven't had it polished since and it's
been a few years since we've been married. 3 1/2 to be exact
because I haven't forgotten and it's written on the number plate
of my car which does help. Footwear is.
Is number 3. So although you can obviously
sell more footwear and people do buy shoes probably several times
a year, the average customer in some, some way more like some
people should collect shoes. What about cleaning?
And most importantly, like I'm going to show you my trainers.
I'm wearing these lovely Adidas, sorry, FCUK trainers, but
they're white and they're looking a bit mucky.
And I suddenly thought of it a while ago that on my next Amazon
order and I'm going to buy a whitening kit for my shoes and
did and used it and my shoes came out amazing.
So then if you're a shoe company, think about what kits
could we send out to help people.
People just not necessarily even last longer because the shoe's
going to wear at the same time. So I'm going to need a
replacement from you or a new pair at some point in the next
the same frequency anyway. But it means my trainers look
amazing and they look amazing thanks to you.
Thanks to you, the retailer that sent me, you know, it was a free
Polish or free shoe whitener that came with the shoes.
And a little thing saying like, you know, scan this QR code and,
and you can get 20% off your next Polish top up again, you're
getting another order. Someone comes back on the side
when they make the next order, they go.
I like those shoes and the whitening made them look
absolutely amazing. I wonder what other shoes
they've got because they're starting to wear out now.
I think they're going to get a new pair and the final one.
Again, you might buy this more frequently, but gaming
companies, I saw a gaming company recently and they were
based in Germany. And what was really cool is they
they said they'd do a mystery game every three months.
So if you subscribe to them, you get 75% off a game, but it's a
mystery game every three months. And what they were actually
doing is buying loads of licenses for games, for computer
games, and then selling the games with the licenses and that
kind of thing. The ones that didn't sell, they
just sent them out as a yeah as a freebie to try and get their
money back on the ones that they had lost.
But again, it meant that someone's got this connection
that four times a year they were getting a very cheap game and
and quite fun games as well. But also then they would ask
customers like, what are your preferences so we can get you
the best, most relevant game for your gaming needs.
How exciting. I hope you're doing today.
We're back again, I think on Friday.
I don't I haven't checked the schedule.
I've been away for a few few days last week and I haven't had
a full working week in a few weeks now, but I will check the
schedule. I think we've got an episode for
this Friday. But if not, I've got some work
to do on my e-mail inbox to try and get some guests.
But I hope you can join us if you haven't already, hit
subscribe. Thanks so much for tuning in.
If you got any questions, if you want to come on the show, hello
at weddingshopify.com. Thanks, guys.
Catch you next time.