Is Your Brand Recession-Proof?

Hello Readers!

Glad you are here. Appreciate you joining the 2,804 folks who love learning about CX and Retention.

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Appreciate all the kind messages about my mom.

Fun fact, she’s an avid reader of the newsie and is slowly (kinda) learning what it is I do for a living.

Or is she? MOM, TELL ME. 🥺

Regardless, she’s resting up and relaxing, and my brother and I took some of our siblings away for the weekend.

On the way to Montebello, NY, we stopped off at a mall to get some steps in and attempt to tire Noah into submission (guess if it worked). 🙃

Once we got to Montebello, this fella went all “Dora the Explorer” for the weekend and didn’t stop running around for a minute.

It was a good and relaxing weekend, but Monday off means a shorter and more concentrated week.

Not gonna lie, this week is kicking my ass quite a bit. 😏

Q4 is coming quickly. We are bringing on some more CX help before the end of the year and focusing on prepping for some fun upcoming product launches at JRB.

The topic for this week’s newsie comes from a few MentorPass conversations I have had lately. Surprisingly, a lot of the questions that come up from 8-figure brands and small emerging brands are pretty similar, and sound something like this:

  • In the current pending economic uncertainty, is there a sure way to turn CX from a cost-center to a revenue-driving department?

  • How do you leverage “customer support” to create brand evangelists?

  • Our CX response time is already under 5 minutes, how can our CX get better than that?

This is my fav topic to riff on, and I’ve been discussing this quite a bit lately, so I am ready to ramble.

Before we get started, just two quick updates!

This week’s newsie is sponsored by Gorgias, my favorite CX helpdesk, which helps our team create memorable customer experiences. If you have been here for a hot minute, you know how much I love Gorgias and why I think it’s an absolute must-have for any Shopify business.

More on my fav Gorgias use cases here.

Second, Cody and I are about to record the season finale of the Down To Chat podcast. We have had so many amazing conversations with friends like Nik Sharma, Amanda Goetz, Joanne Coffey, Shray Joshi, and so many more. Feel free to check out the podcast here:

Now, let’s jump into it.

FB arbitrage or brand? 

If there is a full-on recession or economic downturn, what percentage of DTC brands do you think will make it? Or, put another way, what can a brand do to save itself from turning into one of the startup casualties?

Ask this question to a few folks, you are destined to get quite a few answers. I like the way Shray answered this question on the podcast.

He said: “Lots of the ‘who asked for it’ brands will certainly disappear. Like, who needs yet another protein powder, etc.”

So many large 7 or 8-figure brands have built their company entirely on the FB ads arbitrage and have yet to focus on a real retention and brand strategy that outlives the CAC:LTV math they did to build their business.

If my wallet tightens up, I'll tell you one thing, that bougie DTC aioli sauce is going way before the Heinz ketchup, my iPhone, and occasional (lol) Starbucks coffee. 🤷‍♂️

The holdout test of the century: 

Ever chat with a new-age marketer? You are destined to hear two words in the first 5 minutes of any conversation:

1) attribution 2) incrementality.

We’ll leave #1 for a different time, let’s focus on #2 here.

Put very simply, marketers should always be asking one question:

Do these specific digital marketing efforts actually help me sell more, or would I have sold it anyways?

As a basic example, if you are spending money to get in front of customers that have already purchased, are you actually spending money to bring in revenue that you would not have brought in without the ad spend?

How do you find this out?

One of the pretty common ways of testing for incrementality is a holdout test.

Put simply, hold out on spending in a specific area and see if your revenue decreases. (I was put onto this by Alex Greifeld —would highly recommend checking out her newsletter

Back to Shray’s “who asked for it” companies. If your whole business has been built by the FB ads arbitrage, what happens if CAC goes up (for instance, if cash-strapped customers are harder to persuade) and the math no longer makes sense?

Can your brand live on its current customer base + word of mouth for a solid chunk of time without spending a dime on paid acquisition?

So many 8-figure brands put so much focus on growth, but hardly enough focus on retention.

If the “great holdout” comes along and it makes no sense to spend much, if anything, on growth, can your business be sustained by current customers for a period of time?

What is this “retention” you speak of? 

When brands talk about retention, it almost always means email and SMS. Most retention roles have revolved around “retention marketing”, which is usually sending a million desperate messages to customers that have not purchased in far too long.

Email and SMS are fantastic ways to get to your customers, but what if I told you they are just that? Ways to get to your customers.

Retention takes a much more holistic view.

Leading brands have already shifted their focus away from customer acquisition and toward customer retention.

For example, Dr. Squatch, a natural men's personal care brand, created a team focused on retention throughout the customer journey, composed of marketing, web development, and support team members.

They handle projects like communicating unexpected delays, celebrating subscription anniversaries, and identifying cross-selling opportunities.

Brands need to start focusing on the broader customer journey, beyond just email and SMS.

Zoom zoom zooming back out:

Back to the most frequently asked question:

My response time is within minutes, how can my CX possibly get better?

I recently did a bit of consulting for an 8-figure brand and was asked this exact question.

Here’s a bit of my response from the deck I created for them.

Let’s talk about this for a moment. Were you ever blown away by a brand’s customer service? Was it solely by the speed of response, or how the brand made you feel?

At JRB, we get hundreds of CSAT and CES responses, and every amazing one shares the way we made them feel:

  • The fact that the person they spoke to was personable, respectful, & kind.

  • The fact that it did not sound like a canned response, but a personal one.

  • The fact that they went above and beyond to try to help them resolve an issue.

  • The fact that they took the time to make sure they helped them without rushing.

43% of the folks we send CSAT score requests to end up taking the survey. We make an impression on them by being kind, genuine, and giving a sh*t.

Fast responses are just one of a myriad of reasons that a customer will love your brand, but there is a lot to improve upon beyond that.

Show me the money 💸 :

Of all the myths around CX, my favorite is “CX is a cost-center”.

Yes, it can be a cost center, but so can your marketing department, Phillip.

Gorgias recently put together a fantastic CX Playbook that highlights some CX tactics that can increase your revenue by up to 44%, based on research from 10,000 brands. Some of my favorites:

  • Every customer conversation is an opportunity to drive revenue: We do an astonishing amount of revenue with shade-matching (done by our makeup artists on the CX team). Most brands can find their “shade-matching”

  • Strive for the solid NPS to improve and maintain a stand-out customer experience💡: It certainly is important to leverage NPS surveys to learn what you are doing well and what customers want to see you doing better so you can focus on the right things. We also ask a secondary question at JRB that gives us more qualitative data as well. We use Retently for NPS scoring at JRB and I can’t recommend them enough.

  • Improve your satisfaction score (CSAT) from 4 to 4.9/5 for an estimated revenue lift of 4% ⭐️⭐️: If your CSAT is 5/5 (compared to the average industry CSAT at 4/5), your repeat purchase rate from the 20% of customers who reached out to support will likely be 43% higher for the next 180 days. This means you could lift your overall purchase repeat by 2% for the next 180 days. Given that 40% of orders from an ecommerce brand are from repeat customers, this means that improving your CSAT could lift your revenue by 1% over the next 180 days. And if you consider the average retention of 2 years for customers and you keep your CSAT at 5/5, you can lift your revenue by 4% over the next 2 years.

  • Resolve your customers’ concerns within 6 hours for an estimated revenue lift of 2% ⭐️: The typical conversion from email tickets is 1%. If you resolve your customers’ concerns within 6 hours, you will double your conversion from support, thus you will double your revenue from support i.e. you can lift from an industry average of 3% of revenue from support to 6%. As email tickets represent 80-100% of revenue from support, you should lift your revenue by 2 to 3%. The best-in-class brands generate 10%+ of their revenue from support.

I’d highly recommend checking out the rest of the report here.

Quick question for those long-time readers that know about me traveling the world (34 countries so far!) with points and miles:

I just booked a 6 night trip to Costa Rica entirely on points and miles. 🇨🇷

Any interest in me sharing step-by-step as to how I did it?

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P.S. learn more about how I got started in CPG + my travels here.

That’s it for this week!

Any topics you’d love to see me cover? Drop a reply!

Appreciate you more than you know,

Eli 💛

For this week’s CX Chronicles, I’m thrilled to be joined by Ellie Benner, Senior Director of Ecommerce and CX at Away Travel.

Ellie and I connected 1 year + ago and she is part of our CX discord. As most of you know by now, I started my career in luggage, and I’ve been familiar with Away since its launch.

I have always loved what they have done for travel by making it more about the journey and less about just the destination.

Thanks for taking the time to chat CX, Ellie!

What’s your CX philosophy?

I love the idea of meeting customers where they are, since it makes sense on a few different levels:

1. We’re a travel brand—and our customers are everywhere and always on the move. As a team, we strive to ensure that we can help them out no matter where they are or how they’re traveling. All of our products are built to last and keep up with even the most intrepid travelers, but we also know that sometimes things go awry (sidenote: we’ve had some crazy stories about bags getting run over on freeways, but that is for another time).

We currently offer support to our customers via email and live chat, but we’re about to roll out SMS in order to quickly address those in-the-moment mishaps. We love making miracles happen for customers right before a momentous trip they have planned—and knowing they’ll tell everyone they meet about their Away luggage throughout their honeymoon to Greece, or backpacking in the Rockies, or wherever their bags may take them!

2. We know that every customer and every situation is unique—some customers are the type who find it easiest to hop on live chat, and others want to get on a call, and everything in between. Previously, we tried to direct everyone to engage over email, but have found that it was limiting to many, and didn’t embody our core value to “Be the customer.” We want to resolve our customer’s questions in the way that works best for them, not just in the way that prioritizes efficiency for us.

With this in mind, after a few years of only offering outbound phone calls, we’re introducing call scheduling this fall. This will allow us to manage the volume of calls while still ensuring those customers who feel most heard (literally) on the phone are happy.

Your favorite Away CX story?

In the fall of 2020, like many other brands who were experiencing so many firsts during that time, we hosted our first-ever sale. Given the volume of dedicated existing customers and the droves of new people excited to finally snag their first Away products, we drove an unprecedented level of traffic to our site. Despite weeks of testing and planning and increasing bandwidth, we never could have anticipated how fast and furiously our community came to shop. Sounds exciting! And it was…until it broke the site.

We disappointed a lot of customers, and it took a lot of internal scrambling to get people their orders and refund those whose items were already sold out. In the two weeks following the sale, the entire company banded together to help service our customers. We had colleagues from every corner of the business—from engineering, to finance, to PR, to data & analytics—jumping into the CX inbox to lend a helping hand and troubleshoot where they could.

But amid all those frustrations, what I remember most about that time is actually the many customers who continued to cheer us on. They were true brand evangelists who were thinking of Away and their future travels way before those trips actually came to fruition, even in the darkest days of the pandemic. We were so encouraged by the passion that people had for our brand, and for their loyalty even when the event didn’t go as planned. We’ve definitely improved our planning and operational infrastructure since then, but what I hope hasn’t changed is that excitement for the brand from our customers, and their eagerness to take Away with them wherever they go!

Brought to you by Gorgias