$1B of Ecommerce Retention Marketing Advice in 91 mins | Ft. Thomas Lalas

0:00You will be surprised how many brands that are theoretically doing great, they are one bad month away without anyone knowing. How do you define and view retention? Retention is fundamentally going from order one to order two, and then from order two to order nth. Just getting people to stay longer, to keep buying the product. This is a billion-dollar question. There are so many brands that would benefit and profit tremendously just by getting people [music]

0:26that have ordered once to order twice. The book is called Retention Economics. What [music] are you teaching in this book? It was written because of the need with brands struggling with cash flow. Great revenue, compounding revenue even, but they couldn't pay their staff. There was a real need of brands generating records of revenue, but not having enough cash flow. Founders forget that the reason they're running a business is to

0:50actually not just to generate revenue. You're paying $100 to acquire a new customer. This subscriber is generating $40 up front, so you're minus 60. The second order, another $45. Third order, you broke even. That is your payback period. You said you can often predict retention problems just by looking at the offer. There are three dimensions of an offer.

1:15All righty, what's going on everybody? Today we have a juicy one today. We have Mr. Thomas Lawless, the king of retention and the author of Retention Economics. Working with some of the top subscription and CPG brands. So super excited to talk today and nerd out, Mr. Thomas. How we doing? Would you mind giving a little bit of an introduction on you, what you've been working on, little bit on your background, and we'll

1:36get straight into the sauce. Hi. Hi, Max. Hi, everyone. Great to be here. I'm Thomas. I've been working with e-commerce for the last eight or nine years. I've been marketing for more than 16 years now. When I got started marketing, Shopify was a dwarf. It was just getting started. and when I started focusing on retention subscriptions that was before the 2020 boom where everything started becoming digital everything started becoming subscription. So I've seen a lot of things come and go a lot of things grow extremely fast. Things are evolving pretty fast pretty fast

2:16and it's in a very exciting place to be. I believe we are in the upswing of retention ever since Mr. Trump introduced the tariffs last year everybody started panicking going from oh our acquisition was working well but right now our economics are pretty messed up. So we need to do something about the all these existing customers and that's when I wrote the book I saw the need I was transitioning from a full-time role at Everyday Dose after 2 years of building everything in terms of retention systems. And I wrote the book and eventually I've started working with some amazing brands. I've worked with around 20 nine-figure brands and overall great

2:57eight-figure brands. It's I've been fortunate enough to also have worked with many brands for years you know a lot of people in in retention they have short tenures because the way retention is being reported is quite slow you have to wait for a few months to see the proper nuances of retention but most agencies almost professionals they don't really last that long unfortunately they should be given more time. I've been fortunate enough to have worked you know for long periods of time with many amazing brands I have a ton of data. And everything I'm doing I'm publishing things on LinkedIn now I'm getting more active and I'm

3:32going to soon start a YouTube channel depending where you're watching it it might be already live so I'm following your steps Max. Right on well the people the people need it we need more Thomas content. Right on well stoked to chat today thanks for jumping on see you wrapping the Everyday Dose Tumbler as well right on. Perfect and you mentioned like retention partners and whatnot. And so I want to start off just like real quick on like retention. And so a lot of like the podcast that I've listened to from you and then also like in your book, you talk about retention a lot like behavioral psychology and also like the

4:06finance side of retention as well. You hear a lot of, you know, agency guys and whatnot. It's a little bit more like in the like it's a little bit more I'd say, you know, like adjust these in your emails. But you think a think of a lot of this is like psychology and finance. And so I'd be curious like how do you define and view retention as a sort of like not necessarily a service, but a portion of an e-com business. Like what exactly is

4:33retention? Yeah. Great question. One of the the basic questions that not everybody can answer and that's a great starting point. Retention is fundamentally going from order one to order two and then from order two to order nth. Just getting people to stay longer to keep buying the product if it makes sense to keep buying the product. If we're talking about a mattress company, it's difficult to talk about retention. But if we're talking about a replenishable and naturally replenishable product and CPG brand, then retention is the the everything for for the brand. Retention is about going from order one to order two. This is the

5:10billion-dollar question. Also as a by the way, I have this paid community of 145 members monthly. It's private calls with me every Friday. There's an agency call for agency sauce and learning agencies every Tuesday. You get a full course email marketing course. You get a ton of templates. You get monthly templates. You get all the call recordings. You get community access with me where I share insights every single day. Here's Cloud Design a custom video on that. Email analytics tool that we use and then you have access to ask questions every single day and you'll have myself and the team to also reach out. You have access to me in

5:38the DMs whenever you want as well. You should definitely [clears throat] check this out. Link is going to be in the description to join this community and you'll get more information on these funnels that I post in there. There are so many brands that would benefit and and and profit tremendously just by getting people that have ordered once to order twice. Now, on top of it, if you can have a system that predictively um converts people from order one to order two to order four to order 12, you have won the game. You've cracked the code. And it's quite difficult because it's getting more and more difficult,

6:09actually. People don't really like subscriptions because of all the shady strategies that brands are using. They started seeing, you know, that recurring income, people buying more, and they started adding subscriptions, slapping subscriptions on top of products, expecting that this will actually um help with cash flow, which is why subscriptions have all these bad rap. And things will get even worse because more and more brands are popping up, and people will eventually notice this subscription fatigue, having too many subscriptions where people might not even want to cancel your subscription, but because they have too many of them, and the bill every month is getting bigger and bigger, they

6:48will have to budget. Which subscription should I cancel? They might be canceling five or 10 subscriptions at a time. So, you might end up having a great product, a great system, great culture, but still get a lot of cancellations. This is my prediction. So, the basics is making sure people stick around for longer if the product and the offer allows for it. Not every brand is a retention brand. Not every brand should become a subscription brand. It depends on what you're offering. If people would naturally seek to buy more of your product, then subscription without even OTP in place, a subscription is the ultimate business model. And there is ways of structuring

7:31well, so predictively we can go move people from order one two to order four to order 12. And there is a reason I'm saying 1 2 4 12. We can dive into this. 100%. I definitely want to dive into that. And I like how you said that at the end with not every brand is a subscription brand or is like a retention brand. And you know, subscription is just like a mechanism for getting repeat purchases. But not every brand is built to be a subscription brand. Like for example, you know, [clears throat] I post a lot of content and we also have like a big client base. And so a lot of my clients

8:00will see my content and be like, "Hey, why aren't we doing these strategies? Why aren't we doing setting up like subscription and doing things these ways?" It's like, "You sell spices and people use spices differently." And it doesn't make sense like as much for a spice brand to really be pushing subscription hard. And so it doesn't make sense necessarily and I'm sure we'll get into this a little bit on how subscription could potentially hurt your LTV um by forcing people into subscription rather than giving them the freedom to do one-time purchases a little bit here and there. Um and so that's something that I'd love to dive

8:32in a little bit later on. But we'll get into that. I want to talk a little bit more about like core philosophies and specifically around your book uh retention economics. And if anybody hasn't read it, highly recommend you read it. We'll have a link to it below. Um but I'd love for you to kind of talk a little bit about the finance side of things. Now that we've talked about like, okay, what is retention? So um the book is called retention economics. What does retention economics actually mean

8:54and what are you teaching in this book? So the book again it it was written because of the need with brands struggling with cash flow. Great revenue, uh compounding revenue even, but they couldn't pay their staff. And once [snorts] Trump introduced the tariffs, I started seeing this all over LinkedIn. That was a trend of people complaining that we're generating more and more revenue each

9:21month, but we struggle to pay our bills. We struggle to pay um our personnel and we can't even um finance in advance next month's CAC or even inventory. So there was a real need of brands generating world, you know, records of revenue but not having enough cash flow. And that's because a lot of money was going back into acquisition and retention was not pulling more revenue, higher LTV per customer. So, there was a real need and was the a

9:52right timing when I wrote the book. Now, founders forget that the reason they're running a business is to actually turn a profit, not just to generate revenue. And they forget to look into their P&L. Some of them might not even know how to read a P&L. Not not most of Most of them know, but some of them don't. And that is a shame because if you structure things the wrong way where your P&L never becomes profitable, you are in serious trouble. I have developed simulators where I can add the economics of certain cohorts and then run a simulation down the line stacking cohort over cohort. And a payback period

10:31of 3 months or 4 months sometimes but might turn it into profitability 2 years down the line, not right away. Which is crazy if you think about it. You might look into some basic metrics that everybody should know like what's your payback period? Like you're you're paying $100 for for to acquire a new customer, a new subscriber. Now, this subscriber is generating $40 upfront, so you're minus 60. Then the second order, another $45 maybe, you know, with increased revenue on month two. Okay, you're almost broke

11:05even. Third order, you broke even. Great. That is your payback period. Now, if you stack all these unprofitable upfront cohorts on top of each other, you get a different point of view in terms of your cash flow. And a lot of brands don't know that because you'll have to push external capital back into the business to even fund your operations, to pay for your next ads, to get inventory, and if there is any slip up in inventory, again, the

11:34tariffs, everything becomes fragile. So, all of a sudden, brands, they realize they were building a house of cards because they didn't look into their finances properly. And the reason why I have retention economics, first of all, I'm a retention expert, but also retention, properly structured retention, solves for all the cash flow cash flow problems that brands have. They generate compounded profit, and this way you can cover all of your fixed expenses, you can cover all of your meta, your media buying expenses, you can cover all of your inventory, so you can have enough inventory just in case of, you know, um tariffs or whatever thing might go

12:18wrong. So, looking back into the fundamentals, looking back into cash flow, is the wisest thing brands can do. And that's the reason why I wrote the book. It's a real need. Very smart people went out and they said that they have this problem, and it was about time somebody publishes a book, a something. There are not that many books in eCom that talk about specific things with numbers, with diagrams, with breakdowns, with an interactive tool where you can measure um the numbers of your own brand and

12:51draw conclusions and the next steps. There's not enough out there. And uh I was kind of bullied into writing one. Initially, I was bullied to write LinkedIn content. Yeah. But I don't really like making content. It's quite ephemeral. So, instead, I wrote a book. I spent 7 to 8 months writing the book. And now I went back into writing LinkedIn content as the next step, and then the YouTube channel eventually. So, yeah, that's the reason. And um it's been embraced by uh by many tech platforms. Uh Recharge has made it the the official book about retention, and everybody is required to read the book. There are reading clubs

13:29on Recharge where people discuss the book. Uh hundreds of copies sold overall more than 1,000 copies without too much promotion, no ads, no anything, just word of mouth and people discovering a good book and recommending it. And um Hell yeah. Yeah, things are going well, but I think it's it's our duty, you know, your duty, my duty, other people's duty to educate overall brands on how to look

13:55into retention because it's a baby. Right? It's still it's not enough out there that will educate brands, and we have to do our part. 100% love it. Absolutely. And [clears throat] so like digging into those numbers a little bit, and one of the things one of the main things like gold stars to look at is, you know, retention contribution margin. Um and then also your formula for compounding growth, like where you want to be in order to be a really healthy brand so that, you know, when tariffs happen or anything like that happens, you're not you're not kind of like screwed over. So, could you walk us

14:24through retention contribution margin, um and kind of like the formula that you've uh kind of like formulated? Right. So, um I hope you can pull some visual on the screen. Um so essentially, we have revenue coming up coming in, right? You're uh selling the product, you're pay you they're paying for shipping, whatever is coming in, you know, that's that's your revenue coming up the the top line revenue. Now, you have to reduce any returns, any refunds, um any complaints, you know, any taxes you're paying up front. So, you have the revenue that you have seen now coming in through Stripe, through Shopify, through whatever. Now, in order

15:04to fulfill these orders, you need to subtract any COGS, uh the cost of creating the product, and uh shipping, fulfillment costs, all these costs that eventually uh leave from your bank account because you need to send the product to the customer. That is your delivered contribution margin. These These margins, they have CM1, CM2, CM3. People don't know what CM1, CM2, CM3 are. So, eventually I wrote some clear naming conventions for people. I haven't invented anything new. So, CM2, what people call CM2, is delivered contribution margin. Now, you subtract any paid media that you you pay to acquire the customer, and eventually you're left with retention contribution

15:48margin, which usually, unless you're upfront uh you're profitable from the first order, which is getting less and less uh common, this retention contribution margin is largely um influenced by retention. The The The better your your retention is, the higher the number. There might be eventually a percentage that is uh depending on acquisition, but again, as the brand grows, this acquisition-related

16:16RCM is going to get smaller and smaller. So, eventually it's dwarfed by the retention um contribution. So, that's why I call it retention contribution margin. Now, um we Eventually, you need to uh also subtract any fixed operation expenses, etc., and you end up with with EBITDA. So, retention contribution margin is the closest metric to true cash flow, and by subtracting any fixed costs, you end up with EBITDA, right? If you know what RCM is like for your brand, you can understand whether your existing cash flow can cover your fixed expenses, meaning paying for your personnel, you know, rent, uh bills, etc., whether you can pay for next month's media buying,

17:03ideally, and whether you can buy in advance inventory for the next 3 months in case there is any problem and you need to have enough stock, right? There are so many issues that might happen if you don't have any stock on the side, you might go in red um um because you haven't prepared for this. So, overall, because of that, I work with accountants, I looked into real numbers for brands, and I've worked with many nine-figure brands. So, putting everything together, I created the RCM pyramid. Meaning, you compare your RCM number, your true cash flow, with certain metrics. With your fixed expenses, if your RCM is below what

17:43you're paying for your fixed expenses, means you can't even keep the lights on. You need to to push external capital back in. If you can cover that, that's great. You are a uh a bronze brand. Now, if you can cover also your paid media for next month, meaning, say you generate two and a half million dollars of RCM in Q1, and your paid media for for Q2 is going to be two million dollars. Congratulations, you're now a silver brand. You can not only cover your expenses to keep the lights on, but also you can cover your paid media expenses. Now, if you want to be the best brand that is very safe and

18:22risk-free in terms of um you know, running out of cash or being prone to tariffs or anything else that might happen, you need to be able to cover three months' worth of inventory. Even a month is great, but three months is the safe uh plan. If you can cover that on top of it, then you are a golden

18:40brand. You know, few brands are golden. Many brands that are doing really well, you know about them, they're a silver. And many brands that you know about, they are on rust or tin, you know, the bottom part of the RCM pyramid. You would be surprised how many brands that are theoretically or like on social media, they're doing great, they are one bad month away, one um investor um or one um the type of external funding closing for a bit, you know, they're close to disaster without anyone knowing. So, overall, it's just a hard look into your numbers and it shows the true health of your business. Knowing that will help

19:22you prepare for any um upcoming [clears throat] disaster. And a lot of brands were not ready for that when Mr. Trump introduced the tariffs last year. So, overall, it's great to learn from these things. It's not that far away, right? Nobody says that uh nobody can guarantee that this will happen again. So, it's always great to be ready in advance for these

19:43things. Beautiful. Yeah, no, that that really blew my mind when I first went first went through that because me as an email marketer, email and SMS marketer, I've just lived inside of Klaviyo. Never understood this stuff. It was just like, "Email make money. Send email. Make money." And so, actually like seeing this like actually blew blew my mind and I think that there's a lot more that I think, especially like a lot of people who listen to me who are like email marketers and whatnot will get a ton of value from this. And if you can educate your brands on this, as we've kind of like started to do and

20:09like referred your book to them and whatnot, is like this is what actually can build like lasting brands and it's more than just a meta and then Klaviyo. It's like actually like being able to know these numbers so you can know if you're safe, where we at compared with others, and are we actually built on a weak foundation? Like cuz a lot of brands probably don't even know if they

20:27are. Um and so, I love that. And I will add here, um if the person watching this is an email marketer, is a marketer overall, maybe in-house, maybe in an agency, do read the book because this way you can become more valuable for the brand. Because if you're just focusing on a Klaviyo um dashboard, that is a microcosm that has not much to do with the real health of the business. You're trying to increase your own metrics that will make you look good. Well, it doesn't mean that this is what the business wants. You know, it's quite laughable to say that, "Hey, uh I can generate 30% or 50% of your revenue

21:03coming from Klaviyo." This is just something that most brands don't take seriously. So, step outside of your your microcosm and see how you can be valuable as a true retention marketer to a brand because if you understand what their unit economics are, where profit is coming from, you can actually see that you can run the numbers, you can see that email marketing plays a small role in terms of acquisition. It's a high LTV channel, of course. You know, you people get educated, they have more proximity with the brand, but in terms of scale, a brand would much rather spend money on ads, on something that

21:42can scale faster than email. I I'm exceptional at what I do, but I haven't managed to unlock email as an acquisition channel because it has so many restrictions. So, overall, I think the an email marketer, strictly thinking as an email marketer, is very kind of cornered in a in a side of the business that would never get, you know, full credit for its true value. You need to become more than a an email marketer. You need to become a retention marketer understanding how keeping a customer contributes to the health and the profits and the cash flow of a business. You need to look into numbers, P&L statements. So, there's so

22:25much more that email marketers can learn and I'm pretty sure in the future, if somebody's watching this video 2 years after its publication, I'm pretty sure things will have changed. More people will start shifting from being a part of a small tool that contributes in a very specific way to the profitability of a brand into something bigger where they can be advisors, very strategic, and make sure they understand what drives order two, order three,

22:52order 12. So, let's talk about that a bit, but I just encourage people, not because it's my book, but overall, I would encourage the people who the book to understand that there is way more than email marketing. Email is just a tool. It's not everything. If If this is your world, email is everything for you. But, it's not everything overall in e-com. It's just a tiny fraction of the

23:16bigger picture. Exactly, 100%. Um and I think like especially like in the as AI comes and kind of like democratizes content creation, like email agencies, like if you're just an email agency and it's just, you know, you're executing email creatives, like I mean, that the workflow for that is getting cut, you know, 75% and so your value you need to be able to bring value in other ways. And if you can provide even just like one big aha moment to a brand per quarter, like that's a win in my eyes like as a retention marketer. Like you find like like that sort of stuff if you

23:48can get like numbers, um get a brand's numbers locked in so that they know their numbers and they know everything that you're talking about, but then also be able to deliver a couple aha moments. A lot of times like what I've found in you I've only been doing this like a fraction of the time that you've been doing it, but what I found a lot of times a lot of like retention marketing and diving into a lot of numbers is kind of just dinking around inside of all these different analytics and Shopify and creating your own CSVs and downloading stuff and running different models and whatnot. A

24:18lot of times it's like hours and hours of work and then you get kind of like one aha moment, like one little one little like cohort um that you get a ton of value in um where it's like, "Hey, customers who are coming in on this specific product or this specific funnel um are converting better down the line um than this funnel that you guys are promoting in ads." So, why don't we focus a little bit more on this? Like that sort of thing. And so, I think that's something that at email agencies and then execution agencies are

24:42going to have to focus a lot more on it. So, I'm glad you brought that up. And so, I want to talk um a little bit more about this as well cuz I kind of touched on uh acquisition. So, I want to go through every single step of the sort of like e-com funnel um starting with acquisition and then going into actual onboarding your customers and then going into replenishment and then win back. So, the first thing I want to talk about is acquisition and offers. A lot of people don't think about that in terms of

25:09retention. And a lot of brands just look at, you know, how what are we getting on that first order? And they're not looking at, okay, even if we maybe we have a higher first order AOV on a specific offer, maybe the LTV is lower. And so, I'd love to One thing that you said that I'd love to ask first as we talk about acquisition and offers and their impact on retention is you said you can often predict retention

25:31problems just by looking at the offer. I'd love to hear you pull an example or two with what you're kind of like seeing there and how can you predict retention problems based on the offer? Yeah. Sometimes it's just very obvious. There are three um three dimensions of an offer that need to align for the

25:52offer to not cannibalize retention. So, number one, so we will assume that this is about CPG, about replenishable products. Again, I'm not talking about mattresses, I'm not talking about shoes. I'm talking about the powders, the the pills, you know, the thing that you have to buy again and again. Right? Let's Let's say it's pills. All right? So, the pill for the perfect offer that doesn't cannibalize retention, the pill First of all, you need to identify the

26:23usage of the over of this pill. I have on my desk here some gut health pills. I can only take one a day. I can't take two. It's going to make things worse if I take two. So, there is a natural stop, one a day. Now, when I buy this little box, I receive 30

26:42pills. Meaning, one a day, 30 pills, great alignment. Now, the last dimension is billing cadence. It would be a mistake if I was billed every 15 days. I would be basically billed be billed for for something that I haven't naturally been able to finish because I can't get more than one pill a day. And it would be a mistake for for me to get billed every 60 days. Because this way, I would basically have to stop my my routine, my habit. And even if I got one every other day, still the brand

27:17wouldn't be maximizing value. Because they would have half the billing um triggers in a year than usual. So right now for these pills specifically, the perfect alignment is um it is one pill a day. So this is usage. There is 30 pills in there. So that is the product, the quantity. And then there is every 30 days, which is

27:41billing. These three are aligned. Now, so this is great. If this brand wanted to introduce on the offer a 90-day plan, guess what? They wouldn't introduce 90-day plans with 30 pills. They would introduce 90-day plans with 90 pills. So basically, you would be prepaying for the next 3 months. But the content and the usage would

28:07still align. Now, let's think about another product that like coffee. I have coffee in front of me. Coffee, you can take more dosage doses of coffee a day. You can drink two cups of coffee, three cups of coffee. It's what I call the supercharge effect. You can supercharge your results by getting more of the product. So there's no problem there. Now, with this product, we can have

28:3390 servings of coffee every 30 days. Because you can use one cup, two cups, three cups of coffee. There's no upper limit theoretically. So there's no problem there. Theo Practically, you can have 90 days where people prepay for three doses of coffee every day. A huge bill. Usually people don't do that. But this is possible. It's not possible

28:59with the pills. Right? So, the question is is there a supercharge effect or not? And then finally, let's explore a very typical mistake that I see. I don't know who's teaching these things, but I see so many brands of especially with the younger founders that just want to get all the cash that they can up front and they have say bags. It's one bag every 30 days. The second option is

29:23two bags plus one free. Again for 30 days. And then the third option is three bags plus two bags free. So, five bags again 30 days. And I will ask them, all right, what's the maximum consumption that a person can physically consume or it is allowable every month? And they're like, "Mhm." Maybe you know, two pills, two shots

29:49a day. How many shots in each bag? They will say 60 or they will say 30. So, you run them off and then you realize every 30 days people are rebuilt when they have a ton of product left and they can't physically consume it. All these three dimensions they're misaligned. I can guarantee no matter if my team builds the perfect retention system, the perfect onboarding, the perfect upsells, cross-sells, you know, the perfect

30:21communication, people will churn. Just because the offer is not aligned. And that is a fundamental mistake. I think young founders they're excited by upfront revenue and they're like, "Wow, subscriptions, you know, let's just slap a subscription on an offer that will never be subscription native." And that is a huge mistake. Everything starts at the offer and even before the offer,

30:47the way you run your ads. If you run ads, for example, promoting extremely fast results, guess what? People going to be like, "What What? I can get rid of this or I can achieve this in a week? Of course, sign me up." And you you buy in advance and you And then you realize that a week later

31:07you feel nothing. 4 weeks later you feel nothing. And then you cancel because the promise was misaligned with reality. A brand promised something that is not doable. So, everything starts there. You can have a perfect offer, a perfect product, but just because you were too greedy with the promises, people are expecting results faster. They will cancel because they didn't get enough benefits. Or they will say, um I it's too expensive. Meaning, the value, the monetary value that I assigned to this product is not high enough to justify me paying again. I can't justify this price in my head so I can pay again. But guess what? Say you

31:54promise that you're going to get You're not going to get fast results, but if you use this everyday consistently, in the first 6 weeks you're going to start getting the first results. By month three, you will unlock the full spectrum, which is this and this and this. It doesn't sound so flashy, but people will know what to expect and how long they have to stick around to actually get the results. Now, imagine this is

32:17the promise. And now the product page also aligns with the promise. And the the offer is structured properly, and then people start getting on boarded after that. They receive emails, they receive SMS, they receive a box that is beautiful inside, there is a pamphlet that says what the timeline is, there's a QR code or an NFC that people can Yeah, NFC is the the thing where you tap and it takes you to a place where you

32:44can say why you bought the product. Imagine on the thank you page after you complete the purchase, it asks you, you know, what Why do you want to purchase this product? Because the product might be might have different motivations or different reasons why people buy this product. And imagine if you tailor the communication based on the reason people bought the product, what they wanted to

33:04achieve. Everything is aligned properly. And then eventually 30 days down the line, a stranger has tried something that was not overhyped, that was not over promising something, and they naturally bought again a second time. Just because there is alignment from the ad, from the promise. Maybe they look around the type reviews and they see

33:24great reviews. They go and they buy the product because it's aligned perfectly. And then they get on boarded properly. The brand knows the reason why they bought. They tailor the communication, whether it's via email, via SMS, via push notifications, maybe direct mail, maybe a loyalty element. There are so many cool things. Maybe they join the community as well with other people reinforce that this is a great product and that indeed they didn't see results right away. And then eventually just buying a second time or or even buying bulk buying for the next 3 months is just a no-brainer. That's

33:57the natural next thing to do. Retention is not just email, first of all, obviously. It's not just the offer. It's not just the ads. It's everything moving along with harmony. And that's why when you are a retention marketer, you need to be chatting with everyone in the company. You need to align with the customer service team, with a media

34:21buying team, with everyone. Um so, I loved everything I loved everything you said there and we talked about Okay, so, messaging. You can't have messaging that is misaligned where you're promising results in 7 days. So, once you have your messaging aligned and expectations are strong, um and then you have sort of like the cadence in the actual delivery and making sure that the product can actually deliver um and people consume it at the right rate. You have that aligned. Now, let's get into like the actual offer and what sort of like mechanisms for subscription offers, discounts, gifts, what's kind of

34:58like the right way to think about that? For subscription offers, subscription acquisition offers, um and what's the wrong way to think about it and sort of like the wrong offers that are out there that can actually hurt you in the long run compared to benefit you. Uh great. First of all, I'm just going to preface this by saying that we're still exploring overall as an e-com um ecosystem, we're exploring all these things. There is not just one um formula for for the right offer and

35:28that's it. There are so many brands that are coming up with interesting ways to position things and they're working. Right? So, I can tell you some things that I've studied, a few things that I've observed, a few things that I've applied with my clients and and I'll tell you uh what my experience is, but this is not all there is. All right? So, just to to

35:46make things clear. Um first of all, the the the simplest one is by starting with a product that um can be used once a day with 30 doses of of the product every 30 days. This is just the the beginning of everything. This is a very simple offer and especially if it's a health and wellness product where you need consistent use of a product for a while to get results, this would make a lot of sense. Now,

36:11you can add more options on top of it. You can add, if there is a supercharger effect, you can still keep the same 30-day cadence and add 60 servings and 90 servings. Now, things can look cheaper on the 90 servings or 60 servings every day, you know, per dosage Uh uh basis. And some people will be like, "Yeah, I have the intent to commit anyway, so I'd rather save some money

36:35now and get X number of weeks for free." Very smart. If you're selling bigger, more months in advance or bigger quantities, if you can find a way to position the extra discounts they're getting as something for free, you can say, "Hey, you get one bag free. You get two weeks free." Something for free. One

36:53bottle free. People will think of this part of the offer as something more valuable, right? Every time I've tested a dollar amount versus a discount amount versus free, free [snorts] every single time wins. And it doesn't hurt conversions or it doesn't hurt retention down the line as well. And is that free of the same or is that free of like a cross-sell sort of thing

37:15or another thing? Oh, no. I'm I'm talking about free of the same. Imagine if you're selling 90 servings every 30 every 30 days, right? And you have a discount that is 33% off. 33% off means 30 of the 90 servings are free. Yeah, buy one can say 30 free servings or you can say if a bag has 30 servings inside, you can

37:38say one free bag. Yeah. I I think Primal Queen is doing this really well and I've tried this with Everyday Dose as well where you're either getting one unit of the product or three and and one of the three is free. Meaning you're either getting one at 100% of the price or you're getting three at 33%

38:01off. You could have said 33% off. You could have said $20 off, but you're getting a free unit of whatever you're selling. It always beats everything else, every other combination. Right? So that's why if you're selling an annual plan, saying two bags free, three bags free, three months free is always the smartest way to position things. You can make things more impressive by saying 90 servings free, for example. Right? But AB test all these things. The free angle will always beat any discount

38:33percentage-wise or dollar-wise. Now, you might pre-sell. So, this is selling 30 60 90 servings in a specific month. You might pre-sell every quarter. In this way, you're getting fewer billing reminders. Fatty 15 example. I love Fatty 15. The way they're structuring their product is always around quarterly subscriptions. You can either buy a 90-day subscription up front. You can buy a one-off offer for 90 days. There's no 30-day trial

39:09one-off. It's just 90 days. There is a 30-day trial subscription and unless you cancel, you get billed again every 90 days after that. And there is an annual subscription, I guess for framing, where you see, you know, somebody might be crazy enough to buy for a whole year in advance. But most people will not and this is just for

39:27framing. So, I believe this business model is more superior because usually you cover the expenses, the CAC of the customer up front because they're paying a lot up front. I can see more and more more brands doing this. I Am Made are switching to 90-day subscriptions. I can see more and more brands trying to move people from 30-day subscriptions down the line to 90-day subscriptions as an upgrade. We're doing this with all of our clients as well. Grooming's was a great example of massively moving 30-day 28-day subscribers into the three-month equivalent. You know, if it's 28 days, you it's it's three months minus six days,

40:12whatever. So, overall, fewer billing reminders, more cash up front, you can cover the expense, and you know with any second purchase, which is again every, you know, 90 days, you're getting a lot of cash up-front as well. So, if I were to um magically wave the wand on any client that I'm working uh with, because moving from 30-days to 90-day business model, it's quite difficult in practice. We're doing with this with some of our clients and it's difficult. There's a lot of

40:44involvement, a lot of moving pieces. But, if I were to just magically wave the wand, I would move every brand I'm working with to 90-day subscription. Because there are so many benefits in there. Like imagine the just [clears throat] the simple fact of the billing reminders going from 12 down to four. And every billing reminder is a reminder that you're going

41:06to be charged. Imagine the impact of this. You don't have to mask the fact that they're going to get charged again 12 times in a year. There are brands that have even shorter um time frames. So, they they they send billing reminders every 15 ti- 15 times a year. It is quite difficult to cut churn when the billing reminder is arriving pretty

41:31often. Right? So, I I'm studying a lot about churn and cancellations. And a typical histogram of cancellations, uh just so you know, like the histogram is like you're adding up all the cancellations, how many days they happen after the initial purchase. So, if it's zero and there is a spike in zero, that means people buy and they

41:50cancel on the same day. Right? I want you to guess real quick. Let's keep it interactive. I want you to guess what are the top three spikes in the first 60 days. Yeah. Um I'd go day 30, like once they get the actual day, once they get the confirmation that like they got billed. And then I'm going to go to number number one. This is number one. This is always the biggest spike, by far. People get charged, they realize they got charged, that it was an accidental

42:17renewal. They didn't know they were on a subscription, and they go and rush and they cancel right away. That's always the number one spike. Number two? Number two, billing reminder. Um so, like 3 days before they're about to get billed is like, "Hey, you're about to get billed." exactly. You see a spike 3 days before the the the subscription renews, and then it has smaller spikes uh in the next uh

42:41um few days. And what's number three? Number three, um I would say it's either the the ones I'd say it's when they the the key points that I'm thinking of are day zero, then day four day like when they get the product delivered to them, and then the actual like delivery of the second uh order. Um I'll say once they

43:07get charged the second time. Uh it is day zero. Usually, for most for most brands, there's not enough volume for the spike on order two to be higher than day zero. Yeah. Especially if you're very aggressive with a lot of gifts, and I guess this is what we're going to talk about next. If you have a lot of gifts and a crazy discount up front, people will want to take advantage of this, especially if they see that the OTP is um positioned uh quite more expensive than the subscription. So, they're like, "I'm going to get the subscription. I'm going to get all the gifts. I'm going to

43:43cancel right away. I don't really have the intent to stay, but I'm going to try to take advantage of it." So, there is a spike as well. So, just to recap, uh the spike in cancellations in a histogram of most brands, big spike on the day that they get renewed. People realize they're on a subscription, accidental renewal

44:01usually, and they cancel right away. Second biggest spike is on billing reminders. People get an email, an SMS. You're going to be charged again, usually badly positioned as a billing reminder for most brands. It's literally begging for cancellations. And then number three is day zero. People see a great offer. They want to take advantage of the subscription with a lower price plus all the gifts, and they cancel right away. And I really like there is a a SKU feature where you can disable cancellations for X number of days. You basically tell people, "Hey, if you sign up for this, you want to give it a fair

44:36chance. Don't cancel right away. You're telling basically people we're losing money on you. So, at least give it a fair chance before you cancel. If you don't really like it, you can do this, but don't cancel right away." And you can block for cancellations. Not for any every state, by the way. There are some

44:49states where this is not possible. California is one of them for sure. Things are changing all the time, but California will always stay, uh, you know, uh, on the side of the consumer in any way possible. But, yeah, these are the three top moments of of churn. Beautiful. Beautiful. And I I want to Once we get to, uh, the retention numbers, I want to I want to get dive

45:10into that a little bit. Um, okay. Perfect. And I I just to double tap really quick on like switching to quarterly cuz you said that's a big big ordeal. I'm curious like do you have like rough numbers? Cuz I'm curious like, you know, if you switch to quarterly, what's the impact on CAC? If like a brand is like, "Okay, let's go to switching on quarterly." Is it usually like a triple in CAC? Like that would make sense if it's like three times the price. Is it usually only double? Is it like What do you typically see? Um, and obviously like it has to make sense for the brand and the

45:41product, but what do you typically see impact on CAC going from 30-day pushing 30-day subscriptions to then pushing for 90-day? I wish I had an answer, uh, of a brand that were on 30 days and then moved to 90 days. The brands that I know of, including Fat to Fit 15, either started with a 90-day business model because it's a business model. You're accepting higher CAC than your peers, but you know you're going to have positive cash flow right away. And even though it's going to be more difficult to scale, you will be able to retain them much longer with a more healthy margins. But I haven't

46:17seen a brand moving from initially 30 days and then pivoting to 90 days. So I I really can't tell you whatever CAC they have, these brands is their natural CAC, right? Which keeps increasing again and again. It's like the inflation of CAC in every brand. Things are increasing, so that's why retention is way more important every single day. Brands need to invest in retention because things will not get prettier in

46:40terms of CAC. So I wish I had numbers. If there is a brand, if somebody is listening and they're all watching and there is they know of a brand that were on 30 days, for example, and then moved to 90 days as a core business model, please let us know. I will get in touch with them. I will study them. I'll see what we can learn from them, but there's no example of a pivot

47:03to compare things. Beautiful. Awesome. Perfect. So on on the on the offers front, just to summarize what we talked about with offers as we move into now onboarding. So with offers, we want to make sure cadence, we really think about cadence and how often how many servings we're actually giving people and does it make sense to have that to like what what's the cadence that we're sending to them. That's the first thing and then messaging in our onboarding. What's like our creative side, making sure that that's aligned and not promising the world in the first like week and first two weeks, making sure we're aligned there. And then like

47:36with our gifts and with like sort of like discounts, try to play around with free. And instead of going like automatically defaulting to percent off and percent into dollar off, really look at free and offering free product more of the same and using that framing instead of 33% off, it's buy three bags. You buy two of them, one of them's free. And that's sort of like some of the main things that you're seeing there. So, now let's talk about, okay, the customer buys, they get that, um, and now they're subscribed to your product. Um, and you talk a lot about the first 14 days, um, and how that is sort of like that forges

48:12the belief, uh, that determines retention numbers. Um, so, what are the beliefs that need to happen in the first 2 weeks? What are the specific things that the customer's thinking about in that first 14 days that you need to address in your onboarding systems? Yes. Um, and before I do that, I also need to mention a bit of something about

48:32the gifts themselves. Because I have quite a few brands that reach out to me. I have a Member Pass, uh, profile and some brands reach out to me and say, "Hey, you know, we want a consultation on, um, subscriptions or retention. Want you to evaluate our our, uh, program." And overall, they come to me with, uh, some suggestions about gifts they they were thinking about. And um, the the common mistake that I find when it comes to loyalty and gifting is that brands get cool gifts that they believe they're cool. And, uh, they expect that this will do the heavy lifting on retention. And it's true. When you

49:06add a gift, maybe even a digital gift, where you don't have any associated costs, or a physical gift that people would pay real money for, yes, typically that increases retention. The question is about increasing retention in a way that it covers the costs associated at scale, and then some, you know, for additional profit. Uh, but overall, a big mistake that I see brands doing is they recommend cool gifts, um, that have nothing to do with the the functional nature of the product and how

49:40people use the product every day. Imagine if you were selling coffee, right? You have coffee in front of me. You're selling coffee, and then the gift is a cool towel of the brand or a cool hat. Great. It might be the fanciest hat. It might be even a plush toy, you know, that people can will find very cute. But, people what do they need with their coffee? They need a frother. They need a spoon. They need a a glass, um a a tumbler. They need something that they would buy anyway to use along with the product. Something that will make the product faster, more valuable, something that people will

50:21spend real money on. And if you give it to them for free, they're like, "Oh, amazing. I would spend money on this anyway, and now I get it for free. Amazing." That's going to be a a living and moving advertisement. So, don't think about a cool product. it's going to improve their consumption as well because they have it so they can

50:37use it. Exactly. Exactly. Like the same thing for vitamins. How are you going to make the vitamin dissolve? You might need a spoon, a frother, a glass. Like think of all the like if you're a a dog supplement brand, right? And you Here's a cool idea. Some brands they tell me that, "Hey, you know, the the

50:56dog will not take the pill." Why don't you have something that will smash the pill if it doesn't lose its efficacy, right? So, you smash the pill and you put it in the food. So, this way they consume the pill in um in a different format than the pill itself. And this way you have added something or

51:17a freebie with functional value. Think of everything that the customer would buy by themselves and sponsor it. Like for example with one of the brands that I'm working with, nine figures, uh soon to go to 10 figures, the product once you open it, you have to put it in the fridge. So, now we're sponsoring the fridge basically. Containers, a magnet on the fridge, you know, where you log in your consumption and and you you even write a little contract to yourself that you're going to stick with it every day. Like there are so many cool things once you

51:48know the way people use the product. Where do they store it? You know, maybe they these people you're approaching that travel a lot and travel back maybe makes sense. Right? Don't just think of a cool gift, but think of naturally what would people use alongside your product or in their life in their life in general. If it's creatine and you're focusing on gym

52:11bros, a towel would make sense. Right? Maybe a a a month four gift, you know, an expensive one where after month four churn slows down, so you want month four to be a great graduation. Maybe it's a gym bag, an expensive gym bag that you find, you know, you you bought in bulk and you got great deal per bag. But people think of it as something very

52:33valuable. Like tote bags people love. So these are great gifts for graduations, for key moments of churn, which is key moments in retention is the first order, obviously, order two, order four, and order 12. So these are the key moments. Imagine if you have gifts, amazing gifts to celebrate these moments with for every customer. People will stick around longer. Then imagine you promote these gifts. Like you're 2 months away, you're 1 month away from this, and people looking forward to it. So the gifts can be strategic. But the goal overall of the gift is to increase retention, so make sure your cash flow, your P&L, takes into account the COGS related to

53:14these gifts. And if there is an increase in retention, which usually there is, this increase in retention needs to cover for all the expenses plus more LTV. Right? So don't just think of I just I increase my retention by 2% while the gift cost $15 additional, and you're actually losing money in terms of um actual LTV, actual profit. Right? So

53:34this is very important. I'm going to take a step back now. You asked about the first 14 days. So let's assume that everything has been done properly. The ad didn't over-promise. Maybe there was an advertorial that did a bit of qualifying and a bit of education, right? You move people into a 30-day or 90-day cadence because the

53:53offer was great. Now, what? First of all, the the coolest thing that I've seen working in terms of personalization is collecting the motivation of the person, why they bought this product. And it goes without saying that every product should have its own post-purchase journey. So, on the thank you page, you're asking them this is the thank you page is 100% open rate. No email can get that. When people are on the thank you page right after the purchase, they can see what's in front of them. You ask them why they bought the product. You collect the data. The moment they open the the the

54:28box, that's 100% open rate. You have a pamphlet or a call to action. There's only one QR code, for example, like scan me for the next step. Congratulations, scan me for the next step. And the first question you're asking them is why did you buy this product? So, this way you can personalize the post-purchase journey. And there are other key moments before the the the delivery where you can collect this information. And now, when people receive the product, now they have communication tailored to the reason, which makes you talk to them like a friend, like an advisor, not scream at them like an obnoxious person at the party where you're screaming at

55:08them the wrong message and eventually they tune you out because they know they open one SMS, one email, they get a postcard, and they see just you talking to another person. They will tune you out. But with the right messages, your consumption rate of the message, the open rate, the click rates, you know, the the call to actions will

55:30stay high. A lot of people are saying, "Don't send too many messages, too many emails, too too many text messages, because it will drive churn down. What they're saying is, I don't know what kind of message to send to the right person at the right time, so I can keep these metrics high and the consumption of the message high. They're sending the wrong message at the

55:52wrong time to the wrong person. That's what they what it tells me, because I've managed, again and again, for huge brands to send the right message at the right time for the right person, and the numbers don't slow down. The numbers are extremely high. If you see somebody maintaining click rates of 10, 20% for SMS, 50% for a long time, let me know who they are, and I will tap themselves on the back, and I'll be

56:18their besties. But it's quite difficult to maintain extremely high numbers when you send the wrong message to the wrong person at the wrong time. So, the first 14 days include basically around a week of the delivery of the product, and about a week of onboarding the customer. More or less. You might have 5 days for the delivery, so it's 5 days plus 9 days. But, roughly, 1 week of getting the product delivered,

56:461 week of onboarding the customer. Now, pre-delivery, these are different phases. Pre-delivery, there are different questions in the person's mind. We're talking about the first-time buyer. They're not loyal yet. They're not sure. Maybe, if you're a YouTuber or you have a strong social media following, and these people have been have been stalking you for a while, and now they try the product, maybe they're not all about the product. But, usually, most brands listen to this, they're not there. So, the person, the stranger that gave you a shot, uh you know, compared to all the other offers and all the other products that promise the same thing, they're

57:22thinking, is this right for me? Will I regret this? Uh is there a better option? Am I overpaying for this? Um are these claims believable? Like they have all these questions that need soothing. They're skeptical. So, your goal pre-delivery, number one, confirm this is the right decision. Number two, reduce the skepticism. Number three, increase the perceived

57:50value. There is a way of doing all of that. Number one, every single message, congratulations. You know, reinforcing that they've done the right thing. Don't be afraid of repeating the same messages again and again because not everybody will read every single message you're sending in every every medium. Number number one. Number two, make sure you reduce skepticism by providing the the the the right um elements of social proof, of potential stories, of um you know, other people's faces using the product, something that will make them feel

58:31less skeptical. They will still be skeptical before delivery. But there are elements in marketing that make people feel like, "Okay, this is definitely not a scam." My favorite way of reducing skepticism is by sending where is my order communications. Favorite platform, Wonderment. Not affiliated with them, but if you use Wonderment, people see that their package is moving

58:54along. So, this is great. Also, a great way of reducing skepticism, don't have a product from China that takes 3 weeks to arrive. Very simple. And if somebody is reaching out by customer service in the first week, get back to them. There is a strong correlation with increased churn when people have a bad experience with customer customer

59:19service in the first month. So, make sure this person who still are not sure if they will renew the subscription or not, make sure they're being taken care of. And then finally, increasing perceived value. You have all these freebies that you don't know about. You can have a free community. You can have a free SMS club. You can have a digital freebie that you provide. You can have a physical

59:43freebie. You can have many cool things, a collaboration with an app. This is It costs you nothing to reach out to an app that makes sense for your audience and strike a collaboration with them. It costs you nothing to create an ebook that drives additional value. There are facts where people are getting this additional value and ebook that costs you nothing, and it leads to higher retention by running a simple AB test,

1:00:11by having a simple control group. So, this additional value increases the perceived value and makes people feel like, "Yeah, actually I paid way less compared to what I'm actually getting." And you can future pace also the future value. Hey, you know, here are all these gifts that you're going to be getting, and you're still in month one. Imagine about all these other cool

1:00:34things that you're getting. This future pacing also increases perceived value because they're seeing now what they will get in the future. I'm going to take a step back, another step back, and I'm going to say that the goal here is for people to give your product a fair chance. If they cancel right away, if you can have the best product in the world that does deliver the results, but if they don't give you a fair chance, people will not see any results. And they might actually start badmouthing

1:01:05your product. So, we're working against the human nature to give up too fast. By making people feel safe pre-delivery, you're getting people to feel enthusiastic the moment they receive their box. And then, you want to onboard them so they can give the product for a chance and create a habit faster. So, this pre-delivery, a lot of a lot of a lot of detail here, but literally this is systems for nine-figure brands that

1:01:34I'm talking about. This is perfect. And just to cut you off real quick, this is email and SMS delivery that you're doing? For most of Email Email Email, SMS, it could be WhatsApp, it could be push notifications. So, you don't have enough time to even send a postcard or anything else. You don't have enough time to onboard them into a loyalty program or something like this, right? So, usually at this phase email, SMS, maybe push notifications if you have an app, but most brands don't, so I'm not going to mention that. Um and maybe WhatsApp, right? So, bare-bones I would say everything I'm talking about bare-bones is email and SMS. That's the

1:02:13bare minimum. Beautiful. Awesome. So, you have that leading up uh pre-purchase, and then they actually get their order. What does that onboarding look like? How often are you sending these messages, and what are the key things that you're wanting to deliver? So, they get the order. Brands listening to this, watching, I recommend that you you you get your your product delivered, and somehow you get your hands on videos on people's reactions. If people don't open it up with enthusiasm and they like baby maybe maybe uh smiling like a little kid, you know, just opening the thing and like looking into it and and feeling amazing, you're doing something

1:02:54wrong. The box itself with a 100% open rate, with their full attention, needs to make them feel, you know, like their brain to light up. So, some cool messages, something that is totally on brand, maybe something cheeky if this is your brand, you know, like there are certain certain random things like a little maze that you can solve.

1:03:17Just make people smile. If it's on brand, do this. So, overall, the enthusiasm needs to be there. Inside, a call to action, a timeline, and some basic information on how to best use the product. This is the bare minimum. Obviously, if you don't control the box the unboxing experience, you need to do something about this.

1:03:42It's going to be more costly, you know? You can't compete with a Temu experience or a bare-bones Amazon experience. At least the box will make everything much more premium, and people will feel like it was worth it. So, invest some time into this. Now, inside the pamphlet, the timeline of benefits, a call to action, you know, who should be taking one dose versus two doses, all this information that will make people

1:04:09understand this how to use the product. This is not the only time we're mentioning these things, but you need to repeat the message again and again. In the first 14 days, you need to message these things multiple times. Not everybody will tune in for every single message, but again, 100% open rate, they will open the box. Yeah, and not everybody's going to see every message, and so you need to repeat it for that reason. Not everybody's going to see every single message, and then also, just like rule of marketing, people need to be reminded more than they need to be taught. So, just reminding it and drilling it into them

1:04:41so they know. Perfect. Exactly. Exactly. Spot on. So, visuals when possible, you know, the right promise of the timeline, how to use the product, how to get started, and maybe a call to action, which again drives into the reason they bought the product. So, you can personalize any additional communication. This is just the bare-bones experience. This is like the minimum of what you

1:05:04need to do as a brand. So, they opened it. Like, your goal, just like any SaaS platform, the goal is like you make an account, you need to do something to take some kind of action. Like Twitter for example, if you open an account, they will prompt you to follow a few accounts because an empty feed, people will leave. But a feed with some people that they like and they have some superstars, you know, that they give you options to follow, a feed that has things for you is more valuable and they

1:05:32found that people stick around longer. What is your the equivalent of immediate onboarding for your brand? They open the box, what do they need to do? Just make it prominent. Do they need to open the bottle and take the first shot? Do they need to make the first coffee right away? Do they need Do they have everything they need? Maybe in order to get some, you know, the coffee done, they need a frother, they need a spoon, they need a glass. If you don't provide any of that, they need to find it, the friction is there. How can they start using the

1:06:04product right away? If the product is like there is something that you need to charge, bring it charged to them so they can use it right away. If they need to put it to to charge for hours, they might forget to do it and they might even forget to use the product all together. I got one of these razor thingies for my head and I hadn't used it for months just because it was not charged and I had a wishful thinking that I'm going to use it now, I'm going to use it now. I never got on board it and eventually it just would just in in a shelf, you know, like in a

1:06:38box. And then eventually at some point I'm like I'm going to give it a try now and I gave it a try and have to charge it. But the friction was there. Imagine if everything was charged, there was clear instructions how to take the first steps and people would experience the aha moment fast.

1:06:55Very important. So, people have received the box. After that, personalized communication. I love reminding them of in the first first 7 days post delivery, I love reminding them about the benefits, the timeline, what they should be expecting realistically. I love onboarding them with a concept that is original that I created called bite-sized premium masterclasses. I take Typeforms and I turn usually brands will have blog posts or long videos and like sent people that you know to to read this blog post that was

1:07:34collecting dust from 2022. Instead, take this information and use it presented in a way that people can actually consume nowadays. In a 1 and 1/2 2-minute masterclass with slides where you can actually see the consumption. You can see where people drop off and improve things accordingly. But I take videos, I take blog posts and I turn them into visual masterclasses that people feel like they got something new in every slide and there's like little copy, emojis, visual stuff and

1:08:05people like they click yes, yes, yes. There's interactive elements in it. You will ask people initially um did you did you do you believe this myth or not? Do you think this is true or not? They will say it's true. No, it's wrong. Actually, this is what's true. Or you will ask people, "Where are you planning to store this product?" They will say, "I'm planning to store it there." So you collect now zero-party data to understand how people are thinking about it and maybe you will use it for your ads. Or you will ask people, "What's your return? Are you going to use it every day? Are you going to use

1:08:37it a few times a week?" etc. And you will start collecting and correlating the data of people that said, "I'm going to use it right away. I'm going to use it every day." with retention and you will try to improve messaging down the line this way. You can try to to to couple your product the the formation of the habit of the product with an existing habit. For example, say

1:08:59it's a pill you have to take at night. You can give them three options. Hey, when are you going to take this pill? When I brush my teeth, when I drink water um at night, um when I read my book uh about um and I will have it by my bed bed stand. Something like this. Like think step into your customer's mind and try to connect your product

1:09:21with something existing in their life. It's going to be much faster for them to to build a habit. It's going to It's not going to be difficult for them to to take the pill every day uh along with their coffee if this is where where you peg, you know, the habit. So, there are so many cool ways of basically making it impossible

1:09:38for the customer to fail. And a lot of people will fail, no matter what you do. A lot of people will succeed, no matter what you don't do. We're talking about the people in the middle, the people where they're on the fence. They need a bit of help, a bit of pushing to eventually develop the habit. We're talking about the majority of

1:09:59people. All right? You can't have 100% retention rate, never. But even if you do everything wrong, you will still have 20 30% retention if you have subscriptions. Right? So, overall, this is what happens the first 14 days and the ritual ends with a check-in. So, you uh the product got delivered. The the messages about the timeline, consistency, myths, habit building, onboarding concluded. Now, you need to check in a

1:10:30week afterwards. How did things go? You ask them about the biggest objections. Say you have gummies where a lot of people are saying they don't like the taste. Right? If you know that taste is likely a reason people will cancel, you ask them about it. How would you rate the taste of it? And

1:10:47if they say five out of five, cool. This is not going to be likely a reason they cancel. But if they say one out of five and you do nothing about it, that's on you. Follow up if taste is the reason why they might cancel, follow up with recipes, with a free product that masks the taste. Coffee, give them free

1:11:06creamer. Don't sell them the creamer. Right? Send them personalized recipes. Do things that will help reduce churn because you know they will likely churn. Right? Identify what is true about your brand that will likely lead to churn and try to solve it by collecting zero-party data and then following up down the line. You have 2 weeks left to do that.

1:11:29Right? You can even send direct mail. You have enough time to send direct mail if you want to. Right? If people really you don't really know how to keep them engaged for long because XYZ, send them direct mail. Right? But at least collect zero-party data and try to predict churn this way. And there is one special question I'm always asking on week one, uh on day 14, and I found direct correlation, undisputed correlation with superior retention long-term when people reply yes. And the question is, "Have you felt early benefits to your well-being so

1:12:09far?" That means it could be your mood has improved. It could mean that you actually saw early benefits of the product itself. But usually not. Usually you don't see results in a week. But I'm going to give an example. Um I'm a father now. I have a 2-year-old and I started having, you know, persistent fat on my belly. I don't like it. I used to have a six-pack. But I want to do something about it. And I

1:12:36started walking recently. Right now, I still have the belly, right? I'm walking almost every day. If somebody was to ask me, "Hey, it's been a week since you started walking. Do you feel your well-being has improved? Do you see early benefits of this?" Obviously, my belly is still there. But of course, I'm going to say

1:12:53yes. I know I'm doing the right thing. My mood has improved. I know I can I can start seeing results pretty fast, you know, if I keep at it. And I know I actually started to take care of my diet because I I don't want to ruin what I'm building when I'm working. So, there are benefits to your well-being, and they can be influenced. Some people call it placebo effect. Maybe the product itself is so sticky where there's a placebo effect. But, if you have managed to create an experience that people they trust you. They see the community. They get influenced positively. The perceived value has increased. And these people

1:13:30now know they're doing the right thing. So, they feel the benefits of using your product, and they will not stop doing it. And if you say yes, I feel early benefits, these people tend to stay way longer. Versus people that will say, "I still need time to evaluate the results." You never say no. You never

1:13:49move people into a negative state. Either yes, I feel early benefits, or I still need time to evaluate. Hard to tell. That is genius. So, this is what concludes the first 14 days. That's genius. And I don't I haven't heard anybody talk about that before. And I heard you mention it on on another podcast. So, I'm glad you brought it up cuz that also gets people to think back cuz like a lot of times like you in the day-to-day life like maybe you've been using the product, but you don't sit there and like actually like think, like is this actually like benefiting me? And then you have like you're going to have

1:14:17that placebo a little bit in there. But, I guess people are like once they see that question, you actually prompt them with that question. It gets them to think for a second. And most often it's like, "Yes, I I do feel that." And then it psychologically it almost gets like commitment from them that like, "Hey, I'm using this product." And you're kind of committing longer term to it. It's

1:14:36like, "I'm already seeing the benefits." Like quick win right there. And that's huge for retention and getting people to think about that. And then getting them to commit to it. And then also like people are much more likely to stick with something. Um or I guess I'm not sure the right way to frame it, but like if somebody takes an action, they're much more likely to stick with it. And so if somebody like commits to saying yes or they click this button that you put to them or they respond yes to the email, maybe that's how they're doing it. They're going to be much more likely to keep doing it rather than them

1:15:03not doing anything. And so getting them to kind of like say say it out loud, I think that's I think that's brilliant. I haven't heard that. And so do is that just like a simple like and also like the making sure you don't say no and it's just like I still need to time to see my results. Again, I bet even the people who click that show good numbers compared to people who don't respond because those are the people who they're kind of committing to it. They're they're psychologically committing to oh, I'm going to keep using this

1:15:26product. Um, and then they might see it. So I think that's brilliant and um, so much sauce right there on like all the onboarding and whatnot. Just quick question on that. Is just a simple button uh, like a email with two buttons that you that you do that uh, with or what what's like the setup for that? Cuz I want to go implement I will I'm a big fan of Typeform. So um, the objections plus have you felt early benefits and then potentially identifying a cross-sell by asking them how to rate an another problem. Say you're selling um, a product around energy and focus and you want to sell also another product

1:16:05around sleep. Right? You can ask them how would you rate your sleep in the last two weeks? And if they say five out of five, you can't really cross-sell them the sleep product because they're sleeping well. But if they say one out of five, two out of five, great candidate to follow up with a sleep product. So all of that I use it in Typeform and it's being sent usually seven, eight, nine, 10 days after delivery depending on the brand. And

1:16:29it's one self-contained Typeform. And usually uh, I I select Typeform because it's just quite easy. It syncs with Klaviyo so you can retarget uh, people. You can connect it with uh, with Facebook. Like there's are many cool things you can do. And it's a seamless experience and the platform's been around for a while. Again, not affiliated, I'm just a really big fan of how versatile the the platform is. So, I'm using Typeform for all these things, for the masterclasses, for for the

1:16:55surveys, for for the check-ins. Sometimes I might even use Typeforms as a way to collect answers. So, a simple link could lead to an answered Typeform that takes you to an end page. So, you collect the answer, the click has been logged in, you pass it on as a permanent property on Playwire, and people can see the next step as if they would go to a website and click and go to a website where there's a message, right? But now you can actually get things more streamlined without having to wonder who is this person that got to this page, etc. You

1:17:31know exactly who they are. Many cool things to do on a on a technical side, but yeah, Typeform is my favorite platform for this. Love it. Love it. Well, that was beautiful on on onboarding, how to properly onboard people. And that's I think offer and onboarding are like the biggest things for like long-term retention. We haven't even talked about like winback and all that sort of stuff and preventing cancellations, but I onboarding is probably the most important thing compared to any one of those. Uh if someone's canceling,

1:18:03they you probably already lost them. Um and so it's really hard to get those people. And so I'm glad we spent a lot of time on that. Um and we're we're really we've gone through a lot of this and we've talked a little bit about replenishment. So, we already gone through onboarding and then replenishment we already touched on like kind of like throughout the episode talking about uh major time periods are order two, four, and 12. So, you can use things like um like different gifts at those time periods to help like push things forward. We talked a little bit about billing reminders, making sure you're not using the standard billing

1:18:31reminder that pretty much begs people to cancel. Make sure you customize that billing reminder and you optimize it um to be a little bit more exciting and not just pushing people to cancel, but reaffirming their benefits. Make sure you have a really strong onboarding, and that's going to have the biggest impact on your replenishment and long-term retention. Just like last quick thing, cuz I want to make sure that we touch on this before we close things out here, cuz we're pretty much up here on time, is just like quick wins in terms of win back. So, if somebody does cancel, what are sort of sort of like the main

1:19:03things, bare minimum, that you want brands to set up? You could talk about, you know, cancel flow within platforms, or you could talk about like the actual follow-ups that you're doing, offers that you're doing. I'm sure there's a lot of noise around all sorts of different win back tactics, but kind of like what are like the main first

1:19:20things that you're looking back? Somebody's Somebody cancels, what do you do? What are the main things to look at? Yeah. Let's go through a mini master class on this, because if you're waiting to to solve to to get somebody back after they've canceled, you already lost the game. This is not the biggest impact you can have. This is actually you've already lost the plot. So, number one, make sure people are

1:19:44onboarded. Really, what people are saying when they cancel, and they say it's too expensive, or I haven't seen the benefits, or I have too much product, that means I haven't been onboarded properly. Because if you're onboarded properly, you start a habit, meaning you don't have too much product. It means you got more perceived value, and you got maybe results faster, because you started using it faster. So, you don't have no

1:20:08benefits, or it's too expensive for me. You can justify the price. Now, everything else, you might have bad taste in people canceling, no matter what you do, right? But, everything starts at onboarding. If you're waiting to have a crappy experience, and then win people back once they've canceled, sorry, it's too difficult. I've analyzed the numbers for many brands, and if somebody cancels the first 30 days, or in the first 90 days, the percentage of people that are reactivated is extremely

1:20:34low. The odds are against you. The best way is to be proactive. During onboarding, collect all the signs by sending different messages. I send message every day post purchase. Collect enough signs to treat people that will likely cancel with a solution. If somebody hates the taste and you don't know about it because you Oh, you

1:20:58know about it, you never did anything. That's on you. But if you have all these group of people that are they have done something or said something or provided third-party data that is tightly connected with churn, do something about it to solve the problem you just have in front of you. This will reduce churn. Then, the next thing after that, so this is step two. Step three, cancellation cancellation prevention. I feel very proud to say that when I was working Everyday Dose, Skio and Recharge and everybody else had a very archaic

1:21:36cancellation prevention method. And I created on Typeform a multi-screen and personalized cancellation prevention. And I asked Skio to connect it, my Typeform with their buttons. And they thought it was quite interesting, so eventually they built it as a feature. And now, Recharge, Skio, even other services external to these platforms, they deliver these experiences. I feel very proud to say that I'm kind of like the godfather of

1:22:05this. Oh, yeah. Over there, splash screens, personalized videos based on the reason they selected, and also based on if they're veterans, if they've spent a thousand dollars already, you don't treat them the same way in cancellation prevention like the person that just purchased from you. So, a bit of segmentation with different treatment goes a long way. Like you can have different treatments because somebody has spent already too

1:22:30much money. Right? You can cut them some slack because they're already loyal. Just don't piss them off. Well, somebody that is just purchasing and they're going to cancel, you need to be more aggressive because they need more time and the product, if it's great, is going to do the work and they will not want to

1:22:45cancel down the line. So, you can be more aggressive over there to save them. But, always connect all these data with LTV. Don't celebrate we saved 80 28% of, you know, of people in this flow and eventually these people never purchase again, so you just delayed the inevitable. Look into the people that you save,

1:23:07seemingly. Did they end up buying again? Or did they end up canceling anyway? So, this is very important. Everything you're doing as a retention marketer or as a brand that cares about LTV should be connected back into LTV. Otherwise, it's a vanity metric. Right? I don't care about your SMS click rate or your email open rate unless this evidently leads to higher retention,

1:23:30better LTV. Right? So, cancellation prevention is very important. Again, your pretty close have already decided to cancel or they know the system and they go to get the discount. Right? Some people do this. As a marketer, I always like kind of canceling so I can get a discount. Right? But, most people are not that sophisticated. And then, step number four. Okay, they've canceled. I have the reason they've canceled. How do I get them back? A personalized win-back flow based on the reason they canceled is very important. And I'll give you, like, it's a long discussion, but I'm going to give you like a cheat sheet. In the

1:24:09first 90 days, give them letter of commitment and give them some free product. Like, basically, get them to if it say you have um 30 servings of a product. Give them a free week on you, meaning 25% off. Right? Give them something free, and then if they reactivate, or give them something amazing where you lose money, or you don't lose money, you break even, but it's tied with commitment. So, you get something extremely crazy, get 50% off, you you break even with this purchase, you don't make additional profit, but if they don't cancel, they get

1:24:51uh commitment for the next 2 months. Right? Something like this. So, this is for the short term, for the first 90 days, because these people are not likely to come back. Something crazy that will help them unlock the benefits of the product needs to be in place. People that are VIPs, champions, veterans, the people that have spent a lot of money,

1:25:10commitment is the best offer. You give them a great discount, but they commit for the next 3 months, or the next 6 months. I I've tested so many different offers, and commitment always wins, because there is embedded LTV in it. You might have You will have higher conversion of a non-commitment offer, but if you run the numbers in terms of profit long-term, because one offer has 3 months of profit, 6 months of profit, the other one, you need extremely high retention after that to even match the

1:25:41commitment offer. Eventually, it only makes sense to run commitment offers. You know, get people if the price point is right, make people get people to to uh pay up front, or with a commitment plan, mid-cycle plan, like Skio, they have this feature. You get them to pay monthly like a payment plan, but they can't cancel, but they commit for the

1:26:01next 3 months, 6 months. Right? So, as a cheat sheet, initially, the first 90 days, any win-back should be a crazy offer, maybe even break even on the offer, and there is little commitment, or you give them something free in terms of like a nice angle. And if these people don't come back, you've likely lost them forever. It's even more difficult when these people have not breaking even even, right? If they are

1:26:26unprofitable, it's quite difficult. You're in a very tough spot. Once people have graduated to profitability and now they're VIPs, champions, veterans, commitment offers generating the highest profit down the line. And for me, it's the only option there is. So, hopefully you don't get to this point where you need to get the person back via email, postcards, SMS, push notifications, you've already lost the

1:26:51game, right? So, everything else before that plays a better role. That is beautiful. Preach. Right on. That's That was That was amazing. We've covered absolutely everything. We covered like basic economics and like what's the overall philosophy, then we went to acquisition and offers and how to properly frame the actual purchase. We talked about onboarding and so, what's the right things that you should send to people? Uh what's the post purchase page like? Uh then what's the uh onboarding in terms of before the person gets the order? And then we talked about then once somebody actually gets the product, like what's the unboxing experience? Then what are the

1:27:30emails and the messages that we need to send these people? And then we talked about, you know, replenishment and getting people to stay with the product. And then we talked about win back and cancellation. So, we covered the whole entire journey. That was beautiful. That was absolute perfect masterclass. That was amazing. And my main two takeaways here like for everything that I've heard you say, um you know, a lot of it is number one, know your numbers and know your retention economics as step one is make sure you actually are thinking like a finance person and you actually know your numbers even if you're a marketer,

1:27:59know this about your brands and help them set this up so that they can know if they're building on a house of cards. Um so, that's number one and make sure that you track that very closely. Then number two is just like actually think about your customers and have very clear connected cohesive journeys all the way from the ad the first ad that they see in the messaging all the way until the

1:28:20cancel flow win back that they get. Every single piece of the journey actually think about the real person on the other side of that screen and is what they are seeing cohesive clear and doesn't make sense for them from the amount of product that they're subscribing to to actually making sure that they have all the instruments that they need to

1:28:40take the product every single day. That's just actually think about every single part and that's like what true what really moves the needle with retention numbers. I love how you didn't talk a lot about tactics and it's not all the crazy tactics and you run this specific offer. It was just like back to the base there tons of good stuff there but like a lot of it like as you're saying it it's just psychology and just basic you know kind of like thinking through things

1:29:08like on a human level. Watch. I loved and that changed my framing a lot on it. So I appreciate you sharing all that. Um Yeah, do you have anything right there? Kind of like any closing remarks like before we close out anything that we didn't cover that you wish we'd cover anything like you think that brands should be thinking a little bit more of

1:29:24in 2026? I think right now we have six figures worth of insights. Some people are saying that reading the book itself gave them six figures worth of insights by implementing a few things from the book. Right now this video is a master class on a whole customer journey on the biggest lever in the first 30 days from acquisition to the first 30 days. So this definitely

1:29:50worth six figures overall. We don't need to add anything additional. Just take action whoever is watching listening to this. Take some action implement these things and you will be way more profitable than before. I will recommend that people follow my LinkedIn newsletter, which I'm publishing every week. I followed that today. free and I break down real data from real brands, sometimes public, you know, sharing the name, sometimes anonymized, especially if it's cautionary tales and bad stories where I don't want to badmouth people, but overall these are real numbers from real brands. I'm not making things up. I have access to more than 2,000 brands of data and I analyze brands every week

1:30:38and that's why I know so many things except for the brands I'm working with. And also I would recommend that you buy the book because I literally make zero money selling the book. I barely cover the expenses. I just want to make sure that every smart marketer, every ambitious brand, and every tech platform in e-com actually have this book physically on

1:30:58their desk. Here's the book right here. Retention Economics. Go grab it. Sacrifice one cup of coffee, a very expensive cup of coffee, and get the book and it's going to be worth six figures. That's my recommendation and I really enjoyed this chat. I think it was quite a journey. 100%. It was quite a journey, so I appreciate you sharing it all. Going to have all the links below to Thomas's stuff. Make sure that you follow it and we hope to see you on YouTube as well, but make sure you're following him on LinkedIn. Make sure you get the book and

1:31:28be on the lookout for YouTube videos. Sure there's going to be a ton more sauce there, so thank you, Mr. Thomas. Had a great time and I think everybody will get a ton of value, so excited to share this with everybody, so thank you, my friend and we will be in touch. Thank you everybody for watching. Click the links below and

1:31:43we'll see you in the next one.