In today’s Shopify ecommerce podcast, my guest is Gaby Tegen is the CEO and founder of Smartrr, the premiere subscription app that allows DTC Shopify brands to deepen their relationship with loyal shoppers.
Built with your end customer in mind, Smartrr increases brand engagement and lifetime value with out-of-the-box subscription offerings that keep customers engaged and delighted. In addition to a beautifully branded member portal, subscribers can gift, skip, swap, pause or even fast-track their most loved products.
Join the likes of high-growth brands such as Starface, Remi, The Earthling, Stix, and Jolie, who have seen an average of 15X more sales over a subscriber’s lifetime using Smartrr.
Today’s episode is made possible by our friends by Tapcart, the number one mobile app builder for DTC e-commerce brands on Shopify.
In this episode, you will learn:
- The origin story of Smartrr and where their desire to build SAS came from
- The pain points that can arise in a subscription business
- The impact of a healthy, efficient, and effective subscription business
- How Smartrr is set on helping brands create the most successful business possible
- How subscriptions became one of the key success drivers for DTC brands
- Smartrr’s next steps in business
Listen to today’s Shopify ecommerce podcast
We help Shopify founders to dream, build, launch, grow, and scale.
Our North Star is to inspire founders and marketers to accelerate growth through podcasts and strategic insights. Each week, Steve Hutt and his Shopify expert guest discuss the best Shopify apps and current marketing strategies to accelerate growth and scale. You’ll learn how to improve efficiencies, profitably grow revenue, and build lifetime customer loyalty for your Shopify-powered online store. Today’s episode gets you one step closer to learning from those who are winning in ecommerce!
Links and resources mentioned
Connect With Gaby and the Smartrr Team
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Today’s episode is sponsored by Tapcart, an app that instantly turns your Shopify store into an epic mobile app, no coding required.
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Hi there. My name is Steve Hutt, Senior Merchant Success Manager at Shopify. Welcome to the fifth season of eCommerce Fastlane. Whether this is your first time listening or your weekly subscriber, I do appreciate the fact that you’re taking time today and listening to the show. I know there are plenty of podcast choices out there, both to help grow and scale your Shopify-powered brand, but just the fact that you’re here today definitely means the world to me. I know it does for sure for my featured guest. Now, new episodes are available twice weekly, and they’re available from all your podcast apps like Apple Music, Apple Podcasts, Spotify, and Google Podcasts. We’re also streaming live now on Amazon Music and on YouTube. So if you listen to your show that way, I want to go check out those platforms. I also highly recommend getting the full value of today’s episode that you click through from whatever podcast app you’re using and go through to the show notes. Once again, there’s that ecommercefastlane.com, and there you’ll find the show transcript, links, and then any resources that we mentioned today. In today’s episode, my guest is Gaby Tegen. She’s the CEO and founder of a company called Smartrr – S-M-A-R-T-R-R. They’re a Shopify subscription app to help curate a more engaged and a more enhanced experience for brands that want to get involved with subscriptions and the subscriber experience on Shopify. Hi, Gaby. Welcome to eCommerce Fastlane.
Thank you, Steve, so much, and thanks for having us.
Oh, my pleasure. I mentioned a little bit at the top of the show, subscriptions are a very interesting opportunity for brands. I think some brands don’t realize how easy it can be. But they also on the flip side, though, they understand that there can be some complexities about implementing it or the customer experience around it. And some people are really sensitive about, yeah, I can see the LTV benefits of having a subscription and recurring revenue and predictable income coming in on a subscription site. They’re just not sure how to select the right solution to help implement it. And then they’re also wondering about the overall customer experience when they start adding on instead of just subscribing and saving, is there an abusive way of using it, and all that sort of thing. So let’s just talk first on a high level. I’m going to trust me, I got a bunch of questions here, but I really want to dig deep into subscriptions today because it’s near and dear to my heart. As you know, with Shopify, I have a large book of businesses that I manage, and a lot of them are subscription-based companies. And so I’d like to understand from your perspective, since you’re founder, about the Smartrr brand and specifically some of the problems that you’re solving in the subscription space.
Yeah, I mean, you brought up two great pain points that we hear time and time again. One is the implementation of a subscription app. And two is what the actual implication of offering subscriptions could be. So I guess I can start with those two. I mean, the first one, implementation being complex was one of the things that we first uncovered when even coming up with the idea for Smartrr just in talking to Shopify brands was how expensive, time consuming both the implementation. But then also the maintenance of some of these apps can be. So our approach from day one was how do we cut down on the cost, the time? That is just a general investment that a brand has to make in order to launch subscriptions. Because it should be simple. If it’s a Shopify store, we should mimic Shopify’s methodology, essentially allowing a brand to set up a site or subscriptions in minutes or spend months building a site. But that should be up to them. And then that second point is really interesting. The other thing that we heard time and time again, and this was, Steve, after 150 interviews, is when we decided to really go after this and start Smartrr. But one of the things that we kept hearing was our CS team is growing purely by need because of how many issues we’re having with subscriptions, whether it’s that someone gets billed three times instead of one or they’re billed $2,000 instead of 20. Some of these issues have been really to me, just bizarre. Honestly, I can imagine having a tech platform that causes such headaches but ultimately cost as well. So that was the other thing that we focused on was how do we build a solution that is both easy to implement but customizable for those brands who really want a unique experience. And I can touch on that a little bit later in the conversation, but also one that is based on intuitive behaviors that a consumer will take and what will position them to be most successful with their subscriptions. So that means both giving them ease in how they manage their subscription, but also giving them flexibility. And that includes, for us, gifting we were the first app to launch subscription gifting. We’re the first app to launch sequential subscriptions out of the box, meaning that you can have a refill component really quickly set up. Digital subscriptions are one of our offerings. So really it’s how do we offer a catered subscription solution tailored to their business, but with the end consumer in mind?
Yeah, I noticed that too, that there are some really interesting kinds of out-of-the-box features. Because what I have found, maybe potentially with some other subscription apps is the fact that brands want to create more customizable experiences in their customer portal. The reality is it’s very, very dev heavy, both from a UX perspective and then the actual engineering to maintain this new portal that’s outside of the box just like the regular framework. When I go and see what Smartrr has, you have, like a significant amount of a lot of the feature sets that others are having to build manually themselves or other partners are not including these sorts of functionality built into their customer portal. I know one big one that comes up quite a bit, and the word is flavor fatigue. Where I find brands are, let’s say they’re in a sports nutrition company with protein powder, whatever. Then all of a sudden, or even protein bars. I have another brand, I manage that. In the protein bar business, sometimes you can get flavor fatigue, and you want to make it easy because you want to avoid churn as quickly as possible. And it’s like, well, instead of pausing or canceling your subscription with us today, would you like to pause it? Or in, flavor fatigue is not maybe a word you use with the customer. But on the flip side, though, it makes it easy to go in and change the cadence or the products, the product mix, whatever can be changed quite quickly with your solution. I think it’s quite unique.
Absolutely. And two use cases that stand out to me that get our team excited. One is we’re working with a couple of alcohol beverage companies, but one, in particular, struck a chord with me because they have a phenomenal online business. In fact, one of their online consumers spent a million dollars on tequila last year. Can you imagine?
They have a really thriving business, but they’re offering a subscription, a legacy subscription app. And their offering is essential that you have to pick one of many tequilas you subscribe to that tequila. You cannot swap tequila flavors. You cannot easily add tequila flavors. And when I spoke to them initially, I said, why don’t we do a Tequila of the Month Club where you literally have you could say, are you a beginner? Are you advanced in your tequila tasting? And then every month, you’re able to either select a different tequila or just have a curated selection sent to you. And we could do fun things like online tasting. Right. And so that kind of experience is really one that we want to harp on and allow brands to go above and beyond outside of the box, but through out-of-the-box functionality.
Love it, love it, love it. Let’s talk a little bit about the origin story of Smartrr. It’s always fascinating to me, like why people build technology products. It’s so interesting. How did all the pieces come together with you and the founding team? I guess a couple of points. Number one is the desire to want to build a SAS product. And number two, where did all the expertise come from to be positioned to even want to build this thing?
Yeah, great question. We launched the company well, I guess the initial concept of a company without the name Smartrr, without even the focus on subscriptions, was started in the summer of 2020. So this is essentially peak quarantine season.
Yeah, I bet.
I don’t know how your area was impacted, but in New York, we were really the area that I grew up in was just devastated and shops were closing. And so I felt a need to try to help our local community, but also learn more about how we can help small businesses in general that were impacted by COVID. And frankly, Steve, that was paired with sole fate. I was in proptech before this, and I loved proptech. I love my company and the team that I had the chance to work with. But this opportunity really resonated with me because when we started doing preliminary research calls with DTC founders with Shopify brands, subscriptions just kept coming up. And over the course of a couple of months, it was 150 calls and 147 brands told me that subscriptions were their number one pain point. And keep in mind, Steve, that this is in the midst of the worst supply chain issues that we’ve ever experienced. So that stuck out to me. And that was the moment where we said, you know what? This is something that needs to be built. This is a problem that needs to be solved, and this is an area that desperately needs innovation.
Right, so you jumped in head first, and then where did the technology come from, the engineering side, to get this all together?
Yeah, great question. So we had a small team initially, but then last summer we brought on our phenomenal VP of Engineering, Thomas, who has experience with FreshDirect, and I think something like 15 years of engineering experience. So he’s been really phenomenal and he has brought on, believe it or not, 17 engineers and three product team members. By the way, that’s the majority of our team. Our total team size is 28 right now. So we are heavily invested in RMD, and the growth that we’ve seen from that team is just incredible.
Oh, that’s lovely. That’s good to hear because nice to understand that sometimes these solutions are made based on their own itch to scratch, so to speak, where they had a company and they want to build it. You’re on the flip side, though, where you’re just seeing market sentiment, you’re interviewing and talking to people and all of a sudden, no, these are the pains. This is where we want to get involved. And then all of a sudden understand what these pains and needs are and then come up with a concept and build out this product. Now here we are. There are so many brands that are powered by the Smartrr platform now. I think it was a couple of years back when Shopify released their subscription API. It’s more out into the wild, into the public realm, and anybody can build a subscription app. But the reality is it’s pretty significant, the amount of work that’s involved. And understanding the API, the changes that Shopify is making kind of consistently on it to improve the API. It sounds like you’ve put a lot of the pieces of the puzzle together. What is Shopify offer to get direct access to Shopify payments through Stripe and how that all works, potentially even third-party gateways? But then how do you have or create a great customer experience around your app? Because all subscriptions, just because a side note for those listings, Shopify as its core doesn’t necessarily offer a subscription offering. They have subscription APIs that allow partners to build an app to power the subscriptions that a brand may want. And you’re one of those partners. You just have a more advanced tool now where you have a lot of the things that are custom programs on other tools and other brands have to do versus you have it right out of the box. And I really do appreciate that. So one thing I want to talk a little bit about today is just success right now with brands because I’d argue a bit that you are merchant facing because you get to see what success looks like. You understood the pains, you built a product that is actually solving a need right now and you’re saying, I know we’re going to get into a story in a few minutes, but just overall, are there any kind of key things that you see right now that are just success drivers overall? What’s really making the difference today for brands in DTC? Subscriptions are one of them. But what specifically around that or overall strategy are you seeing?
Great question. I mean, honestly, the market has been changing so quickly that I feel like the answers to that might be outdated by the time this podcast airs. But what we’re seeing is look, I mean, the ad spend that brands are accustomed to deploying is now no longer as efficient. And we know that because acquisition costs are rising. We know that because, I mean, just the ad world, in general, has changed dramatically. So our brands are struggling with a couple of things, but one of which is just purely how do we, from a very basic standpoint, improve or keep consistent our revenue? And that’s where something like a Smartrr can come in, where we’re not just a set it and forget it subscription app, right? We really take the time to build an app and continue to do this research and continue to build the functionality around this very premise of we are consumer behavior driven. So our app is built with the end consumer in mind to drive the behavior that these brands ultimately want to drive. Right? And that can mean full of things. But when brands and we have these numbers and I’m so proud of the team for being able to say what I’m about to say when brands switch from another provider to Smartrr, they see almost 300% growth in the first 90 days and what that is attributed to, at least from how we can understand it, is an increase in conversion on the PDP. We help improve with the in comparison to legacy apps conversion on check out, but that I cannot take credit for. Unfortunately, that is all Shopify. So kudos to you, guys. And then the customer experience post-sale is really our bread and butter. It’s engaging the consumer and that’s as you know, Steve, kind of the premise of what we do is how do we take a customer and turn them into a subscriber but rather than stop there like so many other apps, how do we take that subscriber and turn them into a loyal brand advocate and champion? We believe that that’s through engagement and that can take form in many different ways. It can take form in the community which we help support through our customer portal. It can take place through engaging the consumer, just notifying them of upcoming orders and new products that have been released, giving them member-only benefits which a ton of our brands are seeing as a really significant revenue driver and it can mean so much more. But really what we want to do is make it easy for consumers to manage their subscriptions and do with it what they need. It might be to swap, it might be to add on items, or they might just want to redeem their birthday present from the brand. But the point is that we’re making it easy and ultimately what that all drives are an increase in LTV, obviously. A significant improvement in retention, which I know a lot of brands are hesitant to launch subscriptions for that very reason, and ultimately it helps acquisition because another thing that we do at Smartrr is support reviews and referrals and rewards. We’re actually launching rewards and referrals next week in House, which will be out of beta for us. But over the last couple of months we’ve had brands testing the system out and what that has resulted in is just tremendous results in terms of retention improvement because they don’t want to give up their points, right? Consumers want to keep that point system going and then referrals have been great because once I’m spreading the word about a product, not only is now Steve find that product, but I’m more likely to retain it because I have some affinity to that product and brand.
Yeah, I love it. I’m glad you’re working on the review and loyalty side. I know I’ll dig a little deeper a little later about the partnership side. I believe you’ve been pretty intentional about how to play nicely with a lot of others kind of in the tech space technology that people already have connected because that’s one of the big objections I get from some brands. If they’re making a decision to say well, I already have these pieces of technology, I’m very happy with them. Do they play nicely and what’s the overall scope of the business by turning on subscription? So we’ll dig into that in a few minutes. If your Shopify store is making five or six figures per month in revenue, then you should totally consider using Tapcart to create a mobile app for your store. Now, innovative brands know that their customers prefer shopping on mobile apps and those push notifications are the key to reaching your top segment of customers in the age of saturated email and SMS marketing. Now for a limited time leading up to the peak season, Tapcart is offering up to three months for free. So take advantage of their best deal of the year by booking a free 30 minutes demo at tapcart.com/fastlane. That’s tapcart.com/fastlane. I want to go back to the thing you mentioned about the post-sale experience because I think that’s so interesting because I do have a lot, not just anecdotal but real hard data that is proving the fact of the post-purchase experience. So both kind of like in the checkout flow, the post-purchase upsell or cross-sell is so interesting to me. So are you suggesting that Smartrr has an option as part of the checkout flow to maybe nudge people in the right direction, to saying, hey, just add this one thing on, but just so you know, there’s a subscription offer available? Not just maybe a subscribe and say but maybe and being able to flip that from within the cart. And then I guess the other part of that question is that so if someone buys a one-off, is there an opportunity somewhere from within that session? Thank you for your order. You just bought a pound of coffee. Did you know or did I not just tell you correctly on my PDP page that there’s an offer for subscription offering? So I just like to understand the kind of in checkout flow migration path to subscription and how that’s kind of your thought process around that and then the post-purchase side of I’ve made a purchase nonsubscription, but it is available.
Yeah, great question. So the first talent of that is really like the PDP and how we optimize for that and one thing that for sure is unique about Smartrr and very fortunate, both the culture of our company and also the community that we want to build for our brands is we are very hands-on to the extent that a brand wants us to be, of course. And we have now data from literally millions and millions and millions of orders and millions of subscribers that are actively on Smartrr where we have an idea of what consumer behavior is driving certain success. So to the extent that a brand wants a partnership with us, we certainly are there. It can point to data points around what other beauty companies are seeing success with, and what other food companies are seeing success with. But ultimately that does very much so depending on the product that you’re selling. Of course, that being said, some common practices that we see really high yield from one is, again, with the right product, but having to subscribe and save or whatever membership terminology you’re using be the default option. And the key thing there is you’re not doing that for a cow company. You’d be surprised, Steve. We really do have some interesting brands that come to us, but we really focus on the brands that have a true repeat business by nature and where we believe that subscriptions can be helpful. So that’s definitely one. As far as your second point on the post-sale kind of thank you for your order page. I’ll have to give you a stay tuned for that one.
Okay. I didn’t notice though, I know when I go to the Smartrr site and I take a look under the partner side, maybe this is a good pivot. I see you appear to be playing quite nicely and there are a lot of notable partners in here that I know a lot of brands that are listing today are using a lot of these tools. One being Rebuy, which I think is quite interesting. Plus technology partner, really good in personalization, in the cart, post-purchase, the whole thing, and so it’s interesting that it looks like there are some really decent solutions out here. And knowing that you work with a lot of these partners in all different areas, like your email, you’re talking about the loyalty side of it. I just checkbox right now on the post-purchase side. So we’re looking at Rebuy, we’re looking at Carthook, and a few others. And so can you talk a bit about that? So I know you’re building something more core, but how about those that are existing, like brands right now that have existing pieces of technology to do these sorts of things and they want to get involved in a subscription? I’m trying to reduce some friction here by saying, hey, I’m all using these tools. Let’s talk about your philosophy first around why you have all of these partners playing nicely with you. And then I just don’t want to come back to that whole post-purchase experience. I know there’s money being left on the table and if they already have Rebuy and they turn on Smartrr, that sounds like a pretty easy win.
Yeah. I mean, again, to touch on your first point, partners to us have been everything that is our bread and butter. I think the ecosystem is so incredible and so unique to anything that I’ve experienced partially because of our partners, both agency and tech, but really to have such a welcoming community, and that’s largely I’m going to give credit to Shopify for building such a community. But really it’s beautiful to see people coming together. Even with sending competitive products. Still, being able to partner, I think, is really a phenomenal and very unique thing. Anyone that’s listening to this is taking that aspect of this community for granted. Please don’t, because that is very rare to come by. For us. When you ask why are you playing so nicely with so many, one of my main principles is good people come together, build good products, and make happy customers. And for us, it’s ultimately how we improve these brand experiences. And if we can do so by powering with another player or other players in the space, of course, we’re going to do that. Our end goal should be the same as the Klaviyo and the Gorgias’ and the Rebuys of the world. It should be to help brands create the most successful business possible. And that’s what a strong tech stack will do and something that’s very important to us and was core to our business from day one. And surprisingly, we’re still leading on this front. Really the most built natively on the Shopify subscription act that currently exists. And that is partially what allows us to have such a wide breadth of partnerships. It allows us to be really natively integrated both with Shopify but also with our tech partners, which has been really interesting.
Yeah, I’ll make sure I link this up in the show notes. Yeah, you do play quite nicely with a lot of notable app partners in the marketing strategy and efficiencies and loyalty and email and the whole thing. So it’s interesting that you all play nicely together and that’s kudos to you and Smart that you have thought that from the beginning. I want to talk a little bit about it, I don’t know the best way to explain this, but I think when you go out on Google or you go to the App Store or there are going to be other notable partners that are doing subscription, maybe not the way you’re doing it, you’re notably, in my opinion, from my research, you do things a little bit differently. You have a lot more features set out of the box. But can you talk a little bit about just the intentionality I know you talk about some of the key features, but maybe I don’t want to rehash it, but if there’s anything notable like why you’re specifically unique versus maybe others in the space, I think it’s a blue ocean out there of opportunity where most brands are not doing subscriptions. So with more than 2 million brands on Shopify, the opportunity is massive for everyone. But I just want to make sure those that are not on subscription, why is Smartrr a great choice, maybe, versus others?
I appreciate that question. Our approach is, as you mentioned, very unique. We are very intentionally building and the proof is in the pudding. We took over a year of time to spend on RND, which I don’t believe any other app has done, I think.
Traditionally, right. It’s an interesting ecosystem because definitely Shopify allows you to build and present apps to the public. I mean, easy is not the right word but easy in comparison to many other systems. But our focus was let’s make the best subscription app. Not for just helping a brand literally just convert something into recurring billing, but how do we actually take that consumer, as I said before, take that customer, and turn them into a subscriber? But much more than that, much more significant than that is how do we make them loyal customers and brand advocates? So for us, it’s more about that post-sale experience long term. And I was just chatting with our fantastic head of marketing Shannon who we were talking about this kind of like long-term vision and we said to each other today that this is not a subscription app purely. We are an LTV tool. And what that translates to is recurring revenue is an obvious avenue for how to improve LTV per brand. But that’s the value that we’re providing in improving the sustainability of someone’s business through recurring revenue.
Yeah. And also, you know what it’s nice is like brands that are on subscription, they love the fact, I mean some brands they kind of trigger their subscribers maybe at 02:00 in the morning when there’s the lowest amount of traffic and they kind of go through those orders. I have other brands that do it once a month. They have a box that they do once a month and all their orders blast through all at once because it’s one themed box per month and it triggers on one day. But it’s nice to have that to wake up in the morning each month and know that money is in the bank because that really is an asset for a business knowing that you have this many active subscribers that the revenue is going to be there and then that allows you to kind of future proof your business, so to speak. Can you talk a bit about that?
Absolutely. So I mean you just touched on gold right there, right? You’re talking about not just waking up and knowing that money is coming through because of course that is wonderful and I would love to wake up and know that I had tens of thousands of orders to process today. But from at least our brands, what I can tell you is they so appreciate the fact that they’re able to order enough inventory at a lower price point because they know that those orders are going to come through. They’re able to plan seasonal products and seasonal releases because they know they have this loyal consumer base that will come back time and time again. So it extends from a nice to have into a necessity for a lot of these businesses where it’s of course nice to wake up and know that your bank account is about to see a couple more zeros pop up. But more than that, it can really pivot their business. I mean, it can really make or break someone’s business. And that, I think, is such a beautiful element of recurring billing.
One thing that we haven’t really touched on either yet, but we’ve talked about the benefits for the brand, but one thing we haven’t touched on is the benefits for the consumer to want to get involved with a subscription offering. So can we unpack that a bit?
Yeah, of course. Great question. One of my favorite topics, actually. There’s a variety of categories. Right. Again, I think the thing that irked me initially about the subscription ecosystem was that everything was fit into this one box, subscribe and save, subscribe and forget. Every product was treated the same, where you had a monthly subscription with 10% off and a very cookie-cutter model, but it was not built for unique businesses. And that’s one of our key differentiators. That is how we have seen our brands have so much success. And that translates directly to how consumers are benefiting from the solution as well. So one type of subscriber I would say is subscribing for convenience. And that’s me. When it comes to my paper towels, for example, my soap dispenser free sales, that is a convenience purchase that’s not necessarily driven by a monetary incentive, but it’s solely based on the fact that I don’t want to, in addition to my groceries, carry home a large pack of paper towels.
I get it. Yeah.
Same with water, same with beverages that are heavy and you really don’t want to be slapping them upstairs or up your elevator. Whatever your living situation is, it proves to be challenging for people. So that’s one. The second, and this is kind of going in a different direction, is the build-a-box, the sequential subscriptions. When you talk about the subscription that goes out once a month for a brand that typically correlates to some kind of a membership experience box. And that has been huge for our brands, being able to allow the consumer to, as you said, not just choose a flavor and stick with it, but have the ability to swap, but also create their own experience on a monthly basis, whether that’s the same products. And maybe I want a dozen cans of a certain beverage and I want three of this flavor and three of that.
But it could also be that every month they’re able to select a new product. One example of that that I have become quite addicted to is the Book of the Month Club. And it is so fun. Every first of the month, my phone gets a little notification. I go on, I can see which books were selected. I pick up the three books and it’s a really fun experience. And then the third that I’ll touch on is this kind of replenishment, refill product where you’re purchasing a likely more expensive first-time purchase. Typically that includes some kind of hardware and then the refill component can be a physical good by nature, you’re assuming it’s a physical good. So, for example, one of our brands that I have in my home, one bragging point of mine is that I was their first subscriber is Jolie, which live in Hoboken, New Jersey. And so the water is known, New York. Anyway. And so I received a beautiful showerhead and then every three months I received the refill, which is that kind of filter cartridge.
Oh, I see.
And so that’s been an awesome experience, frankly, because it’s fun to receive, but also a necessary one. Once you have invested in that hardware, you’re unlikely to churn from that product. Right. And then on the last note of that is it doesn’t have to just be a physical product of the by definition, replenished typically insinuates that it’s physical, but it could also be digital. We just launched with a brand that’s doing a really cool health ring. And so the ring is that one-time purchase that you receive. The subscription element is actually the digital app where you can track your health and monitor your sleep and how you’re doing. So, yeah, those are the three that I would highlight. But I’m sure that there are many more we could chat for hours about.
I know that’s great. That’s really good feedback. And at the end of the day, I think the most important thing that I’m getting out of this conversation is the fact that it’s great for merchants. So as a revenue driver and LTV and kind of planning that way and just feeling confident in your business but I also love the fact that you’ve been intentional thinking about from a consumer’s perspective and what the benefits are to them to want to get involved with either building a box or as you’re saying, the replenishment kind of opportunity, the convenience factor that goes along with subscription offering. So all of that, I’m in complete alignment. This is the conversation I have all day long with brands that maybe are not doing subscriptions, saying there are two sides of this coin here the revenue driver, LTV, but there’s also the customer side of it. I think there’s some convenience factor. The thing is huge. This is lovely. You mentioned Jolie. I don’t know if this is a great time to pivot or not, but we love hearing stories on this podcast because I think it really in here since you’re a customer, I’m Jolie now. I don’t know if this is a good one to chitchat about, but it would be great to just understand. Anyways, always up to you if this is who you want to chat about, but I just would love to understand someone who didn’t have a subscription offering and choosing Smartrr and that whole journey of just success on your platform. Is anybody notable of Jolie? Is it? I’m not sure, but let me know.
Yeah, I mean, the co-founders of Jolie are just honestly just so inspirational. I’m happy to chat about them. But we also just have so many wonderful brands that are founded with incredible stories, and we’ve really also benefited from subscription offerings. Jolie is one of them, for sure. But in general, it really just is wonderful to see the impact that a healthy subscription business can have. And when you touch on just a moment ago, that kind of not just the revenue driver, but some of the complications, let’s say, that could arise from offering subscriptions. One of which that we mentioned at the beginning of this call was customer support tickets. And one thing that we’re really proud of is the proof is in the pudding, right? When someone switched to Smartrr, on average anyway, they’re seeing a 70%, 70% decrease in customer support tickets. And so that’s allowing our brands not only to benefit from the nice feeling of I’m waking up and I know that this money is coming in. Not only to benefit from the fact that people are loyal customers to their product. Obviously, that has tremendous benefits of its own. But they’re actually saving money because they’re able to have their team spend time in other areas or potentially just not have as many CS reps which many people hired a ton of because of the complications around subscription. So that was a great point to bring up. I’m happy to chat about Jolie. They’re really one of my favorite products just because I use them every day, if not twice, twice a day. But it really is a great duo, Ryan and Arjun. And their model is just one of the smartest recurring models that I have seen. And that’s because, as I mentioned, they have a hardware solution, which is the shower head. Once I have committed to that shower head and by the way, the installation was 3 seconds, but once I have decided to purchase a shower head, I’m committing to this brand. And the nice thing about it is that once I’ve committed to that shower head, the refill itself, I think it ends up being like $10 a month. And truly, I’m not sponsored, I promise, but truly, my arm has gotten better. My skin has gotten better. The best part and I owe them. They keep asking me for this video, but I really do owe them this time. It’s a video of my dog. I don’t know if you’re a dog guy
So my pup, best doggie in the world, Riley, was not a shower girl, okay? And I swear to you, we got the joke, by the way. This is literally like we live in an apartment. We have a tub, but she does not do well on the tub. So we put her in the shower and either one of us is in the shower with her, or we just close the door and see what she does most of this relief. But she went from hiding in the corner of the shower to literally I’m not bullshitting here, standing under the shower head, literally showering, because the water just comes out smoother. It really does. Anyway, their business has seen really incredible growth, but also less than 1% churn. And that speaks to both the quality of product, obviously. What they’re doing is really special, and it’s a beautiful product, but also just the model itself is genius. It really is. Hardware plus retail works really well for our brands.
Yeah. So this brand, I think I have the right URL here. So jolieskinco.com and I do see the filtered showerhead, so we’ll throw them up in the show notes. And being a Shopify brand, we’ll just throw some kudos here. But it’s pretty neat. So $148 gives you this really mint shower head in all different colors, like brush steel and aluminum and chrome and different colors and stuff. But I think the win here, the LTV win once again, is both for the brand and the consumer. You’ve made the investment for your not. You have it now, but now you’re on a subscription plan for, I don’t know, $6 every quarter or $6 a month, like whatever it comes in at, it’s a small investment. For the larger $148 that you spent to get, I think they’re giving you every 90 days, you’re getting a new filter that you can put in. So it’s a high level, great product, but instead of being a one off and see you later, now you have this option. Pretty cool story and having a low churn rate, too, I can guarantee you that. Just like on hardware, knowing what the gross margin is going to be in the manufacturing of this $148 unit, knowing what typical margins are for production or something of this kind of quality, there’s a little bit of profit in that. But I think where it’s really made up is in an active charcoal filter that is sent to you every quarter. And knowing the lifetime value of that, that’s really where this brand is, I think, winning in the end.
Yes, I have total conviction in that business, so definitely recommend checking out the site. It’s beautiful, and I can’t speak to their margins, but it is a really healthy business.
Yeah, it’s lovely. So let’s talk about the future for the Smartrr product. It seems like you said you did a full year of RND before releasing. Really got involved in the middle of the pandemic. Here we are now on Shopify, many brands are powered by your connection just because you’re much more advanced, in my opinion, from what I can see. And so I think that’s really exciting. Where are things headed you alluded to a little bit about maybe getting involved in the loyalty side? You’ve been talking a little bit about some other different enhancements to the product. So I don’t know what you can share in a public roadmap, but here we are today. And where do you believe you’re going to be kind of a year from now, what can people expect?
Yeah, of course, secrets to be had. But for us, it’s not in the way that you phrase it was great. The thing for us is not to dabble in a variety of areas. We are not a one stop for 25 apps type of company.
No Swiss army knife for you.
Well, not quite. Our focus is on that recurring revenue. How do we improve LTV and how do we turn customers into advocates and champions? And that has its own little ecosystem that we can build around. So as I mentioned, we literally next week are launching rewards and referrals to the public we just launched and completely out of the box. No code, build a box, which is really exciting and to my knowledge the first that exists in the space. We recently launched digital subscriptions which again allows a brand to offer more of a membership style experience that could be a product plus access to a special member only club or member only magazine or newsletter or cooking book. And really next year is focused on essentially how do we grow that repeat customer base. That could be through reengaging customers, that could be through diving into memberships more. But sky’s the limit. We’re super excited. We’ll be also launching a ton around predictive analytics and making sure that brands have the proper insights that they need to make decisions on their business both short and long term. Right at the very beginning of the call you mentioned swapping out products and how that could be helpful for a consumer that wants to try different [flavors]. What if brands had access to that information proactively? What if we knew that a certain product was more likely to cause churn and there were preventative steps that you could take to ensure that the consumer has the best possible experience? That’s just a taste of what’s on the roadmap that we’re currently working on. But hopefully that is a good teaser.
Yeah, it sounds like a little bit of first party data going on here, and understanding the relationships between the RFM, this recency frequency monetization strategy, and then understanding the correlation between products, the likelihood of the second sale. I know I talk a lot about this too, my brands and things. If you’re not getting involved in some kind of a solution for an RFM and avoiding your Active and you’re at risk and your loyal customers and then how do we get them to the second and third sale? Or in your case, subscription offering? It’s a very interesting conversation and the data is inside shopify. That first party data is there. It’s just how do you uncover it and how do you [act on] it?
Yes, exactly. It’s unlocking it and taking it and doing something with that data ideally automatically, right. Ideally there’s some kind of engine that doesn’t require brands because by the way, brands are pulling this data and manually looking at the reports and manually making one off changes. And that’s what we’re trying to avoid. We’re trying to create a system that allows brands to at scale offer subscriptions and memberships with ease that will really impact their business in a positive way.
That’s lovely. So where do you want to send people? What do you believe? Our kind of our next steps are our call to action for those listing today that have maybe made a decision, yeah, I’m all in on kind of what Smartrr is doing. I appreciate what Gaby has to say, that it’s good for the brand, it’s another revenue driver, it’s great for the consumer. Where do you want to send people education and just overall next steps?
Great question. First off, we would love to speak with any of you that are on this call and have more questions. Does not have to be Smartrr related. We do just love talking about all things. Subscriptions are recurring billing related, so if you even just want to pick our brains, our team is here and open to chatting. Feel free to go on our website and schedule a call if you’d like. Otherwise, you can, of course, email us in. Steve can also share information. We will be offering special pricing. So please mention Steve if you do talk to us in this podcast, and we’ll make sure that you guys are getting a great offer. And thank you, Steve, so much for having us.
My pleasure. And one thing I’ve noticed on the website too, really great blog. All the case studies and things like that are all listed, like, right on the Smartrr website. So I’ll make sure those go into the show notes. I understand that you would like to kind of talk in the green room before recording today. I understand that you would like to, for those that really want to pull the trigger and say, yeah, I want to get involved, maybe book a call. But is there any other kind of listener only bonus or promotion to kind of really get going with Smartrr?
Yes. So this is really exciting because we actually have never in the history of Smartrr offered any promotion. I swear.
And in honor of this podcast and also the fact that we’re co-hosting an event with Shopify in New York next week, we’re going to be offering your listeners and then also attendees of that event 20% off to US Smartrr. Which is not only the first time that we’ve offered a discount. But it’s a really excellent deal. And we’ll still obviously provide all of the customer support. You’ll still get your dedicated account manager. All the things that people love about Smartrr will be included in that.
Lovely. This is great. So what we’ll do then is I’ll have a landing page created, so ecommercefastlane.com/smartrr that will be in the show notes that will redirect to a landing page. For those that are listening, you can take Gaby up on that offer. Well, this has been great. Honestly, I always say this on the show, but it’s a life of learning is one of my mantras. I did a little bit of research ahead of time, but I think you really shared a lot. It’s really important to have a subscription offering for most brands. I think those listings, they dig deep and try to figure out how is it that I can get involved in a recurring revenue opportunity. It’s great for the brand. It’s great for the end consumer. If your product mix is there, you guys are available almost as business consultants to kind of help and talk through the opportunity. And I think I really appreciate that. And thank you for just sharing your knowledge and your vision. I just appreciate you giving back to the Shopify ecosystem today.
Of course. And thank you all so much. And thank you. Shopify obviously has been a great partner to us. We’re so excited for what the future holds. And thank you guys so much for listening.
All right, have yourself a great afternoon.
Thanks so much. You too, Steve.
That’s it for today’s episode. I’d like to thank you personally for being a loyal listener of Ecommerce Fastlane. It’s my hope that this podcast is offering you a ton of value through growth strategies, tactics, and exclusive insider tips on the best Shopify apps and marketing platforms, all with my personal goal to help you build, manage, grow, and scale a successful and thriving company powered by Shopify. Thanks for investing some time today and listening to the show. I’m so proud and excited that you have a growth mindset and are a constant learner. I truly appreciate you and your entrepreneurial journey. Enjoy the rest of the week, and keep thriving with Shopify.