How to Increase Sales from Returning Customers, with Thomas Grabner

Thomas Grabner shares effective strategies that successful brands use to consistently generate more sales from returning customers.

He talks about why product-market fit matters more than most metrics in ecommerce. Thomas also explains how to use educational content to engage first-time buyers and keep customers coming back. 

And how to effectively use CRM channels like WhatsApp or print to improve engagement and customer lifetime value.

Key Takeaways:

• Product-market fit is essential for ecommerce success; you cannot scale without it.
• Encourage customer feedback to continuously improve your products and better understand their needs.
• Engage customers from their first purchase with content that adds value and drives product use.
• Don't be fooled by any tools’ metrics; focus on driving incremental sales & profit.
• Build and leverage communities—let your loyal customers sell for you.

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Christian Hoppe
Welcome Thomas. Super excited to have you today. I think it's very exciting because on the one hand, you have a lot of insights in ecommerce. On the other hand, also as an entrepreneur, as you also started your business at a really young age. Almost five years ago, if I remember correctly. But yeah, very happy to have you and welcome.

Starting a 7-fig business with 18 years

Thomas Grabner
Yeah, thank you. Thanks for having me. I'm Thomas. 

Yeah, it was four years ago. I had the luck I started on the 1st of January in 2020. So, in terms of bookkeeping, it was quite good dates. I didn't know it back then, but yeah, it's four years now. We started as email only and now do print and WhatsApp, so all kinds of CRM channels. 

Christian Hoppe
Crazy, ride. Yeah. I think you started as a freelancer, right? And then you grew your team and your clients and what has now become Mailody. 

And it's, I would say, the number one email marketing agency in the German market with crazy references. You have Giesswein, Junglück, Glow25, Everdrop, a lot of very well-known brands and a ton more, so you also have a lot of insights into different businesses. 

And I have to say, I appreciate you and Tizian very much. You're both really cool guys. Very knowledgeable, hardworking, experienced. And yeah, always staying on the top of the latest trends. 

Thomas Grabner
We try to. 

Christian Hoppe
Cool. Before we start diving into some stories or some topics I wanted to ask if you want to share a little bit more about your personal story because I think it's super interesting. 

How did you get started in email marketing? You were super young. I think you didn't wake up one day and say, “Now I'm going to do email marketing.” I guess there's something behind that maybe. 

Thomas Grabner
Yeah, so I did finish high school for the luck of my parents, because otherwise I think it would have been bad blood back home. 

But yeah, I did finish my high school and in my finishing year COVID-19 started to appear and we didn't go back to school, so I mainly had remote schooling and I started to first do some websites. 

I did niche websites, I did some Amazon ebooks and tried my best and never... never had much luck there. It was like a couple of hundred euros which was quite nice for the age but nothing where you could make a living from. 

Then I started doing some websites and the first client approached me, "Hey, could you set up my Mailchimp account?" That was kind of the first project there. 

So, no big fancy story. It was like go from one thing to the next to the next and this has become Mailody by now, where I would say we did work quite hard but we also had the big luck of COVID-19 expanding and people were throwing budget out of the door which was a good period to start off on. And yeah, then we grew from client to client and we had the big luck that we chose Klaviyo as the tool we worked with. Instead of having like seven different tools, we decided to do one and this one quite good. 

And also, there I could take the ride with Klaviyo from not even having a “do and a see” in German to, I would say, now the leading tool that is used at least in SMB (Server Message Block) and slowly going into upmarket. 

Christian Hoppe
So you were at the right place at the right time, maybe, but I think there's also a lot of skill behind that to run a positive and successful business. So congrats to that. 

It's interesting what you say because I think a lot of young people started now, in this COVID-19 age, and a lot of things have changed. And also for ecommerce, a lot of brands that started during COVID-19 and they had very successful first 1 to 3 years. And now there's a different phase or last 1-2 years, you could see funding went down, decreased and a lot of brands struggled. 

How do you see the state of ecommerce right now? What do you see happening? 

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What has changed in Ecommerce since COVID?

Thomas Grabner
Yeah, I would agree with you and one thing I have with one specific client we had from the very beginning is we had the discussion 3 years ago, when there was so much funding in having the discussion. 

"Should we even send out emails?" We could throw 10,000 euros more into paid social and it would do kind of the same thing. 

The same client, the same person, the same role of the company now comes back 3 years later and is like a fan of, "Oh, should we do some marketing with our existing customers? It's cheaper and we don't have the funding anymore and we need to take care more here." 

I would say, big brands and also companies with some brand behind, having good products, having product market fit, they still grow especially if they're problem-solving products.

But then, if I have the D2C startups that have the same product, sourced probably from the same factory in China, with the same packaging, they do struggle at the moment and have a hard time. They're not growing. They're even trying to just survive. 

And yeah, we see, especially also with our clients, that they care more about budgeting and what 3 years ago wasn't even the discussion is now something being discussed. So, yeah times definitely get hotter and tougher. 

So, I would say the biggest challenge is... There are so many D2C companies where it's just a marketing team and they have the same product and the same everything that everyone else has. And it's so hard for them to have established USPs. 

And I think what companies that do still grow and they get bigger is they do work on their product. They do listen more to customers and they work on having USPs. You know, they don't have the same exact product as someone else. 

Christian Hoppe
Yeah, that's for sure. I recently had a chat with Johannes from Chatarmin. He also mentioned, there's "On the one hand, you need product market fit, but obviously you need message market fit." 

So, right? You can have the same product but one company, one brand maybe, manages to speak about the right problems, desires that customers have, another brand does not. And also that influences heavily what customers you acquire in the end and how much those customers stick around. 

The higher the motivation and the desire is for customers to use the product, the more they will use the product and the better the retention is. 

So, I guess one topic for all of us is that you can never fix a business, right? A broken business, you can only help. I love the quote, "You can help winners win more", but there needs to be a strong foundation. 

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What Successful Brands Do Differently To Grow

Thomas Grabner
This is something we have so many times, especially with the client size we deal with. 

There are people coming and saying like, "You know, we can do campaign in-house like campaign management, we can do in-housing, but we need you to fix our retention.”

And this is always a very hard discussion to have. If the product is not good enough or if people are not meant to rebuy, no email will help them to rebuy or if I have a food product and they will buy, I don't know, five flavors, but they like one and they dislike four of them. Most likely no email in the world will help them to buy again from the company if they dislike the flavors. 

Like no email will look so nice or so good or will pain point them so good that they will rebuy. It's more like the product is already established. Usually, these brands work without the channels that we all work on and they just work better if people work on the specific problems there.

But no product will be fixed with good messaging, good emails, good WhatsApps, good print campaigns. 

Christian Hoppe
Exactly. So, you can only amplify what they have, which is a good transition. 

I think on your website you say, "We do email", and I think you do email really well. But, I would actually challenge that because, at least from what I know, how I know you and what you do with customers is you go beyond that, right? 

Because you actually help them, you're not just executing the emails but you actually have with all the knowledge that you have in your experience, you actually go further and help them also how they can fix the basics and it's not just the execution of email.

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How to Engage Customers by Educating Them

Thomas Grabner
Right. Yeah, I think usually the agency website is the client that is treated in the worst way and there are probably some things we should update next to like the email that we do more different channels but yeah, we also try to work together with our clients. 

This is not something we can do on our side to, like, how do people use the product, in which packaging? How many, like, how much should be in the packaging? How do we explain the customers how to best use the product? 

Because what I see in most CRM and email setups is either there is no communication in the first two weeks or there is just free upsells and trying to sell to people more. 

But, I think the most important phase is from the time people purchase to the time the product is delivered to their doorstep, to the time they unwrap it, how do they use it at the beginning? 

Because, especially with food and with supplements, if the product is good, if we speak about porridge, the product is good but people just don't prepare it in a certain way and then it doesn't taste good to them, they will most likely not try it again and again and again. 

So, it's very important to think about the first 2 or 3 weeks on how the product is used and how we approach clients there. So that the more usually they use it, the better they like it, the more likely they will be to purchase by themselves and not the first or the second upsell email in the first week. 

Christian Hoppe
Yeah, it's important. I remember we also learned at waterdrop that it's important to get customers to use the product first before they will actually purchase. 

So, if they don't use the product you can do the best marketing you want after that, the best communication, but they need to actually use the product and like the product. That's a really important point. 

Thomas Grabner
Especially with products that are consumable and these work probably best in retention. No one will rebuy a backpack when you know, they have just purchased, but if I have consumable products, it's very important to explain to them how do to use the product in the right way. 

If you have new products, for example, when I would assume waterdrop was new or if you take everdrop into account, people don't know the product, so we need to explain to them how much water do they fill in the glass in order that it tastes good, because if it's too little or too much probably doesn't taste good and they will not continue using the product. 

Christian Hoppe
Yeah, I remember we had this talk conversation where we spoke about the retention point strategy. 

So, it's also interesting that during acquisition, when acquiring a customer, we focus so much on what are the desires, what are the problems they want to solve, the desires of what they want to achieve with the product. 

And many brands that don't know better, they just, once the customer is acquired, they start communicating, "These are our values. This is what we stand for..." And they completely forgot about the customer. 

And, as you just mentioned, to get them actually to use and get them hooked on the product. That's a very important way... 

Thomas Grabner
Usually, it's easier or the easiest way is just take the small messaging in the 10-second video ad and then prepare it in a longer email chain and people will start reading. 

And they don't really care about the values and who's working in the company and who's standing behind and how the production line looks like. They mostly have this kind of desired outcome they would like to have. 

Like, no one buys the T-shirt, they will buy a look or ideally a compliment from maybe their partner or from their friends and this is what you gets them to buy in the first place and this should be what gets them to buy again and again. 

Just taking things that work very well in an acquisition and then push them back and have probably more attention from the customers, because it's very hard, in like their Instagram feed, to get the attention you would like to have but when you have won them over, usually they do read the first couple of emails. 

Especially if your emails are between order confirmation and shipping confirmation most likely they will at least open them and you have probably more attention spent there to get them even more excited and give them more explanation regarding the product and the effects they will take from it. 

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The 3 Most Common Email Marketing Misconceptions

Christian Hoppe
Yeah, maybe we can clean out some misconceptions because I think what you just mentioned, right? 

Brands come to you and say, "Hey, we can do all this execution in-house, just fix our retention." But, I think when you ask even CMOs and marketers like, "How do you fix retention?" There's like probably no real answer. 

Like, many people think, "I don't know", right? So, they struggle, they want to fix retention, they don't know how. And then, sometimes I feel that people just start working on something which doesn't even, might not even have the biggest impact. 

You first mentioned that the emails, the communication right after the purchase is way more important than maybe a win-back campaign because, even though you have a lot of customers that haven't purchased for a long time, probably they are dead, right? They will not open the emails. So, it's way more important to get it right here. 

So, what are some of the measures that you see brands work on that they shouldn't, or they don't have to work on, and what is really important? 

Thomas Grabner
So, I would say there are 3 things people tell us when they come to us. 

The first thing is, "Oh, we need to segment more." And then, they have maybe a list of like 10,000 people and they try to segment everyone because personalization is such a buzzword that people have. 

Second piece usually is, "Oh, we need to A/B test everything." And I think that the big misconception here is the way email tools are set up. I have the belief that if I send an email, the email gets delivered because it says 99% delivered. 

They tell me, if you don't have welcome flow, you lose 20,000 in revenue per month in usually you would lose that. And then they create benchmarks and they will tell you, you know, your competitor brands they have this much open rate and they have this much click rate and you should start A/B testing to increase here and there. 

And then they have this automatic A/B testing features where they will tell you once it's significant. So that's kind of the second piece. We need to test everything and then people start testing with I don't know, 20 abandoned cards per day to time delay test 40 minutes against 20 minutes. 

So that's the second piece usually and then, the third piece is that they don't even have email properly set up and then they start with WhatsApp and they start with print and then they build their own app because it's just the things people are doing.

I think these are like the 3 main things people try to focus on and then they just naturally like they think in terms of email revenue but they don't think in terms of how many people do rebuy, when do they rebuy, how much do they rebuy, which products do they rebuy. 

I think that's the big problem. Email tools don't care about these numbers. Like the only thing if you log into a Klaviyo or if you're logging to an Amarsis or an Omnisend, this is how much revenue you do, this is how much email revenue it is and then usually 80% is a welcome flow anyway. 

So, these are like I think mainly triggered by email tools and they will push you to the metrics they like you to focus on because of course if you plug on an email tool and you start sending emails of course there is attributed revenue because people start opening and will eventually buy in the next couple of days because they are already existing customers. 

So, I think these are like a couple of problems where people don't even focus on the metrics they should be taking a look on because they are fooled by the tools they are using. 

Christian Hoppe
The email tools want to achieve more revenue, so the email tools look great, and email marketers also want to do that, same as acquisition marketers want to inflate basically the ROAS in the ads manager. 

What is that then that you say makes sense to look at? So these are the metrics not to look at. 

Thomas Grabner
Yeah, right, so... I think one of the big things we have at the moment is people send emails, but they have no idea if they even deliver, and then we have like the sender requirement update from the beginning of February, and then people can't even pronounce the word DMARC, and they have no idea what a sending domain is, because they just think it... it's enough to just create an account and start sending emails. 

So, I think first thing is, before I start sending emails, before I heavily invest into content and copywriting and sending out mails, I should think about, "Do I even deliver it?" Because it doesn't make sense to send to, I don't know, 20, 30, 40, 50,000 people and then maybe don't reach certain providers. 

So, I think this is one of the first pieces where usually the people running emails they're mainly content focused and once it gets technical they're like no that's not our business to take care of. I think this is the first thing I would think about it and the second thing is, “If I generate new customers, how many people do rebuy and how much do they rebuy and which products do they usually rebuy?”

And then start working on these journeys instead of having a post-purchase journey and everyone who purchases from brand XYZ will get a win-back campaign after 90 days of not purchasing and then they will get up in cross-sells the first couple of days. 

Think about maybe in the beginning what are the 3 main offers I have in acquisition and build tied down journeys for these specific products. And if I have hundreds of products, most likely I will have 3 or 5 or 10 that are the... I don't know, the big winners in acquisition, take these out and then really think about them before going into the email tool. 

How do they work? If I have maybe a tester bundle with five flavors, how does it work? People buy in the beginning, how should I structure it? Should I ask them which products they like? Should I understand how long does it usually take for me to have it at the doorstep? How many days does it take for me to understand which flavors they like? When should I approach my upsell? How much should I maybe discount them? 

Because it makes sense to discount on the second purchase more because then people will stay on longer in the long run. Think more about the product and what people will do after. 

These are maybe the two things people should think about before introducing WhatsApp, before introducing print campaigns and before starting to segment our database in, I don't know 100 small segments. 

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Segmenting Campaigns: The Dos and Don'ts

Christian Hoppe
Great. So basically do less, do it with better focus, do the right things. 

Um, it's also interesting that you mentioned funnels because I think we also know brands that do between, I think 50 to a 100 million a year, and that basically have one hero product and one core funnel. 

And, uh, when I once asked him like, “Why don't you, you know, you have other products, why don't you build other funnels?” They said like, "Every time and focus that I invest into building another funnel, uh, is time that I lose optimizing my main funnel. And I rather have a really, really strong performance on one funnel than building multiple funnels." 

So, I think that also ties into what you said with segmentation. It's much, much harder to suddenly have hyper segmentation and maintain and track and optimize everything instead of really focusing on one core funnel. 

Thomas Grabner
Right. And then if you start segmenting, usually people will, for every campaign they do, they will segment more differently. 

They will launch Advent calendars, and then they will segment who has purchased Advent calendars before, who hasn't, who is new to the database. 

And then next time, if they I don't know, launch a new product line, they will think about who has purchased this in the past. And they will never have comparable segments. 

When I start segmenting, do not like segment in hundreds of different pieces. Maybe start by, "Who from my prospects haven't purchased ever from me?" "Who are my active customers who have maybe bought in like the last couple of weeks?" And then, "Who are the people that have churned from me?" 

And then maybe start working with these 3 or maybe 4 segments if I have subscription in maybe tie them into a different segment. But then you can suddenly test messaging because you can't test with all your prospects what does work in terms of messaging and you don't have different segments all the time. 

And then you can also be more aggressive with people who are inactive and send maybe more frequently to the active customers that maybe will purchase by themselves anyways. 

And then have comparable segments rather than hundreds of slices and every time it's different on who you will send and you build out campaigns fully new. 

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The Challenges of Implementing Subscriptions

Christian Hoppe
Yeah, makes a lot of sense. You mentioned subscriptions. What is your experience? 

I think Germany is different than the rest of the world. It's not so open to subscriptions. Still, do you have any cases where you see subscriptions work?

Thomas Grabner
So, I think we have accepted that Netflix and Amazon Prime is a subscription. 

I think that the German people are fine with it and start purchasing these kind of things in subscription. But then when it comes to ecommerce products, from what I see is, so many of our clients start doing subscription models and usually I would say 80% or 90% of the times they fail. Either no one purchases it or people will, it's kind of a bundle, people will buy and churn afterwards. 

So, I think it's very hard to have a successful and running subscription business and usually if you do have it, as we were speaking earlier, you don't have 5 funnels and then 5 products in subscriptions, you usually then have main focus on subscriptions. 

So, for example we have Ittipatite, a client of ours, their whole business model is based on we have subscription boxes and this is the way the whole company operates. 

And I think 3 or 4 years ago they started introducing one-time products like next to the vegetable and fruit boxes they are selling to. 

They have suddenly olive oil and they had some cooking gear and for example these products didn't really work. So, what they did again is then only focus on their subscription. 

But usually, if you take a non-subscription product and just try to sell subscription to have better valuation, it usually fails. And if you have subscription, it also takes so much time and effort to focus on this kind of things. 

What do customers want? When do they usually churn? You need a way different data structure usually in order to understand when do people churn, what are the churn costs in order to work better on the product. 

And then usually acquisition is harder, you're not profitable, it's way more expensive in order to do acquisition there and more capital-heavy in terms of scaling. 

Usually, in DACH market, if you don't have a product that is very used to subscription and we will accept it here, it's hard to get it up and running. 

Christian Hoppe
Yeah, it's a very good point. 

You need to focus on subscription and basically run a subscription-first business. We've also seen it at waterdrop when we wanted to test subscription and we've had a lot of drops and campaigns and offers. 

And then people say, "Why should I go on subscription? I have loyalty points. I can use those. There is a discount or something happening every few months." 

So, it's very hard to introduce a subscription later on. I think it requires a mindset shift. 

Thomas Grabner
Right, and I also think people, like the end customer usually gets confused because people will start with subscription and then they start with referral tool, and then there is loyalty tool, and then there is special early ambassador club and whatsoever and then people do get confused there, and people yeah as you were saying they will stop their subscription because they will get better discount and then they start purchasing the product somewhere else but then they don't renew the subscription. 

So, if you have subscription you should focus on it and you should also be aware of the pricing there and understand that people, if you do promotion and if you have a second kind of revenue stream, you will kill also your subscription if you're not careful because, even if you separate them, email-wise they will have an understanding because sometimes they do have different email addresses or they will see it somewhere in social media so, even if you segment them based on email, they will get an understanding that there are better promotions out of the subscription. 

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What to Consider Before Launching a Loyalty Program

Christian Hoppe
Yeah, so this leads us to loyalty program. 

There's a lot of different ways, right? You can have loyalty programs with points, you can have memberships, you can have subscriptions. Is this something that, you mentioned, competes with each other? 

And, when is also the right time for brands to implement loyalty programs? I also see often brands go, they just start it out and say, "Hey, we need a loyalty program." 

Thomas Grabner
So yeah, we see the same thing. 

So, people just randomly start loyalty programs. They think about what tier should we do and then they usually eat up their margin because people, either refer themselves because you don't have it set up properly or they will, like you will have so many people in like different tiers. 

So, I think the first thing is you need to be an established company and you need to understand how people purchase and how their lifetime value develops over time and be very careful in how you introduce your tiering, have the top 10% in your best tier and then go based on these ones. 

Also, what we see here with our clients is the biggest problem is if I just introduce a loyalty program because I want to boost retention, I have a cool tool and then I introduce tiers and then I just let it run by themselves, usually I will just give out discount codes. 

What I would rather do and think about is, "Could we have an exciting loyalty program?" For example, we do have a client at the moment who thinks about not only the discounting side but what could I offer my customers 

"Is there maybe some kind of magazine I could share with them that I could even list on my website that maybe it's paid for a couple of euros but they would get it quarterly for example for free?" 

Or, "Could I introduce some kind of community where people will interact with each other and I have kind of my own ambassadors who sell to each other or do they want to have some maybe courses or extra content where there would even be more close to the brand. 

So, I would think about are there real benefits that maybe my customer base wants, and send out the survey beforehand and understand what are the things they would like to have and could I get them even more excited about it or also, one thing I came across, we haven't tested it with one of our clients, but for example I saw in the pet industry a discounter online who has a loyalty program you even pay for it. 

So you pay, I think, 10 euros per quarter or something like this in order to have a small buy-in, people will get more discounting there. And they would think twice if they would buy somewhere else. 

So, they would always come back to these specific retailers. Think more in terms of, not only tiers and pricing, more like, "Are there actual benefits that benefit my target group, and where I could gather more market share there?" 

Christian Hoppe
Yeah, these memberships programs are interesting. It's basically the Costco model, right? 

When Costco also started doing this and say, "Hey, it's also Amazon Prime, right? You want to think, "I pay a membership fee so now it should be worth it. So, I will rather order more often." It's an interesting, interesting thought process. 

Regarding the tiers and everything; I think what we also found and community is that customers, once they're connected, either you create your community where you can basically manage the narrative and what's happening there and steer the communication. 

But, it will also happen if you're a strong brand that customers do that themselves and maybe create also groups and ways to communicate outside of that. So having this tiered approach in loyalty is quite difficult because, at least in my experience, also customers said, "Hey, why do you get better prices than me?" 

So just because you spend more, are you worth more for the company? So that can also be very tricky. But otherwise it's a very powerful tool as well to create these communities. 

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How To Build a Community That Will Sell Your Product

Thomas Grabner
Yeah, absolutely. 

Especially, if people create their own communities, usually they speak more about it. We had one client in the fashion industry before, where people were sharing screenshots. “Why do you get this A/B test and I get this A/B test and you have all your access than me?”

So, be careful if you don't manage your own community there. 

But apart from that, if you usually manage your own community, you have... at least you can manage them usually and argument these kinds of things because in my opinion, it's something I can argument if someone has purchased more times before and they are in a bigger tier and it's communicated openly. 

I would be fine with having people with different discounting structures. 

Christian Hoppe
Yeah, exactly. It needs to be transparent and you need to have clear communication, I guess, for customers to accept it. Yeah. 

The communities are actually very interesting, as you mentioned, because the customers can sell to each other. 

I've seen it also that if you get your most loyal customers into a community and then you get new customers also join the community, and then whenever you have a question, they are answered by other customers automatically, and they feel rewarded, right? Everyone wants to say something and have recognition. 

And it's of course much more powerful than if you try to sell your own product. So this can be a really strong retention boost. 

Thomas Grabner
Yeah. Especially if you have delayed gratification, meaning I take the supplement for 2 months and I don't see anything happening. And then after 2 months I see effects. 

It helps if, I don't know, Mary joins new into the group but then there are 3 people already in sharing their results there. It would motivate the new person joining usually and it would help getting over this initial barrier of taking a supplement every day and not seeing a result. 

Same thing with losing weight or having a like weight-loss products having this motivation for products I have to use for a longer time in order to see effects there. 

Christian Hoppe
Yeah, that's a very good point. 

Also, I heard an interesting statement that, when you have these brands or when you have this product that takes a little bit of time, right, 3 months or longer, then it's also a good idea to sell that either as a subscription or as a bundle to customers so the expectation is set right. 

Of course, the acquisition team can try to promise too much, that your whole life will change in two weeks. But that hurts, of course, retention and ultimately the business, if you over promise and instead of setting the expectations right. 

Thomas Grabner
Right, yeah. I would say the same and especially having some kind of guide with it, like having the expectation for the customers. Well, I do get the product but then I get some kind of information around it and usually the more they consume the information, whether it's written or it's in video form, usually the better they use the product and then the more likely they are to repurchase again. 

So, if I can take the promise at the beginning and then stretch it out over a longer email chain usually has more success for them to understand how to use the product, how long they have to use it. 

Or maybe add some kind of things, for example have some kind of routine checker where they would maybe like cross out the days they're using it or maybe if WhatsApp or push notifications get bigger and bigger over time, having some kind of daily reminder, you know, "Use the product" or whatever that I could set as a customer, like helping them as much as possible to get the thing into their routine and give them an understanding. 

You know, the first week, “You don't see anything but this, this and this is happening.” And then in the second week, “You don't see much either but this, this and this is happening”, in order for them to stay on longer. 

Christian Hoppe
Yeah, what you say is not what others hear. So, often it takes more touch points, both in acquisition and retention, for customers to understand. Yeah. 

Thomas Grabner
Yeah, I would say the same. And also if I sell them a bundle, and the bundle is, I don't know, 100 euros or 150 euros, that's still no commitment for them to use the product. 

Like, we all are on too many topics at the same time and we have so many things we deal with on a daily basis, especially also with like being on social media, having so many messages in usually just buying something. Yeah, it doesn't mean that people will use it up for the whole time or even start with it, I would assume.

The big problem in ecommerce is, we don't see if people use the product later on, but I think there are so many companies and so many people buying a product and never even starting to use it. 

Christian Hoppe
I agree. 

It's a very good statement to say that the product doesn't compete, maybe with other products, but it competes with watching TV or spending time with family or doing some other leisure activity that might be more rewarding or have more instant gratification than starting to create a new habit. 

Thomas Grabner
And then, I think also the first 2-3 times they use it, it should be in some kind of way, if possible, rewarding that they stick on longer. 

I think that's also... I think the first gap is they start using it the second, that the even harder gap is that they stay on with the product that they use it in a longer time frame. 

Christian Hoppe
What do you think about the unboxing experience? 

I guess always that, if you open up a product or if you actually train the customer already to be excited when the product will come, as you mentioned, in the time between ordering and receiving the product, and then you have an amazing unboxing experience, something that is like, "Wow, I'm really looking forward to trying this out." Then, I guess this can help. 

Thomas Grabner
Yeah, I think so too. 

I think unboxing... but then also having some kind of, you know, don't just unbox it and put it somewhere away, because I think this happens as well. People get excited, open packaging and like, "Oh, I will try it on later." 

Having some kind of intuitive explanation that people will, I don't know, either scan a QR code and see some explanation there, or have a small booklet where they will get some information, or maybe there is a small sample in, if it's for food products that they'll just take out and try and have maybe a good experience there to have the unboxing experience exciting, but then also having some kind of mechanism that they will start using as soon as possible. 

Because the best thing that could happen is, if people get excited, they will open the package they have, I don't know, five flavors of porridge in, and they are super excited about the chocolate flavor and they will right away start using it rather than just opening, putting it somewhere and then starting later on. maybe don't even ever start using the product. 

‍

How To Leverage WhatsApp and Print to Increase Your CLV

Christian Hoppe
Just quickly, maybe you can share some case studies or not case studies, but maybe some cases of WhatsApp, print, just to understand maybe what is possible with these channels, when do these channels make sense and yeah, how can you implement them? 

Thomas Grabner
Maybe we start with when do they make sense. 

I think they do make sense if I have email nailed because it's the cheapest channel I can use and have. So, it doesn't make sense to start with more expensive channels if I haven't nailed the free ones or the cheaper ones. 

And then for me, there is, on one hand side there is print campaigns, usually print work well if I have little bit higher AOVs, because if I have 30 euros in AOV and then I spend 50 cents for a postcard, it's quite hard to get it profitable, but then print usually makes sense if I have a larger list I can send to. 

So, of course I can say I send a win-back email and then I wait 10 days and I send a second win-back email and then I send for example a print campaign after. But then, if I only have a couple of print campaigns per week or per month, it's quite expensive to send them.

So usually it makes more sense to take a look at I have a big database of maybe a 100,000 people and then there is maybe 30,000 unsubscribed from email and then out of these 30,000 there is 5,000 that have a high CLV, they haven't purchased the last couple of months and then for these specifically I do a print campaign so I only use money for people I can't reach via email, and then send out the print campaign. 

Usually, and this is something we have observed as well, don't do the print campaign in summer to fix your like revenue problems there, do it when it's already going good and start doing print then. So, that's kind of when does print make sense. 

And then the second piece with WhatsApp, again, it does make sense if I have a higher AOV because I pay per message, usually like 9 to 11 cents when I do marketing messages, and they also have an understanding of, "Am I profitable?", and in my opinion email always makes sense at a certain point in an ecommerce lifetime. 

But then, WhatsApp and print is more like a performance channel to me. I need to be very careful on what I'm spending and what do I make and I don't want to have return on investment of free when I'm already marketing to existing customers. 

So, same thing with WhatsApp. I pay per message. I don't have the volume problem. But then, I would approach WhatsApp in two matters it always makes sense in my opinion. The first piece is... If I have people that don't open my email and then I send, for example, a WhatsApp message after I do a product launch at 10am and then maybe at 6pm I send after a WhatsApp message where I have both email and the telephone number to also be very efficient in terms of budgeting. 

And then the second piece is, can I use the ease of opt-in from WhatsApp to gather people that I don't gather in my email list, meaning maybe I have smaller influencers I use in normal ways. I have the story, people click on the story, they go on to the landing page and either they will buy or they don't buy. 

If I put an email opt-in between I will lose probably everyone. Like, you have to opt-in first to go on to the landing page and then purchase because people will wait for the email, the email doesn't get delivered, then they click on it, they have to type the email in first, maybe they have a spelling mistake, like super long way of getting to towards the landing page. But if I put WhatsApp in between, I have click, I am in WhatsApp, I need a second click to send the first message. 

I get my discount code there, I have very little friction, I can just test it, see how many people do I lose over this process, but then I will get everyone who wants to have the discount code, no matter if they will check out later or not. And then, I could maybe retarget them a week later. 

And then, I'm building WhatsApp lists where I can't reach via email compared to... I will just gather in all the telephone numbers I have and then just sending out WhatsApp and, usually, I eat up revenue from email, put it towards WhatsApp and I just pay, I don't know, 10 times the price of what I could do with email. 

Christian Hoppe
So, have you tested that? That you basically have an influencer, that you have an influencer and you send them to a landing page or you have a WhatsApp opt-in in between? 

Thomas Grabner
Yes. So, we have it for example with Tales and Tails pet food company and they have small... Usually, if you have big influencers it's hard because you have buyout programs and they don't want to have you capture their database, but if you have smaller influencers like Tales and Tails is doing, it works quite good. 

And what you can do in the second phase is, you can't send the WhatsApp from Tales and Tails, but you could send a small maybe UGC video of the influencer taking the phone and showing some products with a reminder later on. 

Or if the people are having a very, very good community, you could even send a voice message when they recognize the voice of the influencer. You can send a voice message later on to remarket there. 

With Tales and Tails it's basically no loss in terms of conversion rate, but then you would gather in more database and have people in the WhatsApp list. 

And then if you take it one step further, and this hasn't been tested, but we also have companies selling, having kind of the Amazon way of doing things. Meaning, I have different brands on my website and I sell for them. 

And if they market towards my ecommerce store, I can also capture the leads in between. So, for example, I have their product selling in my store, they market it maybe on their socials, having their WhatsApp link in between, I would capture database from someone else, sending traffic to my store, and I have it with me as well. 

So, whenever it's possible to capture database, somewhere where people are fine with it and usually that's like smaller influencers, smaller merchants, it's very wise to just try it out and see how much you can capture there. 

Christian Hoppe
That's a great case. How email marketing or WhatsApp, in that case, can actually support acquisition instead of trying to get the big step done, that someone purchased immediately, capture the data and nurture. That's a really cool case. I haven't seen that actually in real life. 

Thomas Grabner
Well, hopefully you will see a couple of more examples soon. But, I think WhatsApp is just a channel that is, yeah, I think WhatsApp is just a channel that is more starting out. 

I think in the beginning, people just imported the whole database, sent out, it was not profitable for them, and now people will look for more smarter solutions there and see how these things develop. Because what I have seen with also clients of ours is WhatsApp gets expensive super quick. 

Because you pay usually more than for your email tool for the provider and then you pay the variable fee in terms of the WhatsApp cost. It does make sense to just target people where you can't target on some other channel cheaper and see how these things work. 

‍

How to Gain Value From Customer Support

Christian Hoppe
Yeah, and Europe is not very receptive to SMS so you have to use WhatsApp in that case. 

Thomas Grabner
Yeah, I would say the same. 

I think we have accepted SMS for logging into our bank account, but not for ecommerce and for shopping purpose. So, you have to go via WhatsApp, but then you also have this; the next thing that costs money, which is support. 

It's way easier if I get a WhatsApp from a company to just type something quickly back like, "Oh, how do I blah  blah blah?", and these are things that would never exist with an email ticket because I would not go to the website and then start writing a long support ticket because just email is the way we communicate in a longer and more in-depth way. 

But If I get a WhatsApp, it's super quick to just answer there. So it's even a topic for customer care. And then, if I'm spending more with email and I get more tickets, then why are there emails? 

And sometimes, these tickets are good because people may check out and buy more. But most of the time people will just have a couple of random questions and it has no impact in terms of performance. 

Christian Hoppe
Yeah, It's a super important topic and super interesting topic, the whole customer support. I think a lot of people see it as a problem. 

And Johannes from Chatarmin also said like, "Customer support is actually one of the best things that can happen to a company. A ticket is basically a gift, not a burden. And if you see it that way, then you can really implement it the right way. You can iterate product, you can improve your experience, you can improve everything. You can also improve your acquisition messaging because you find out what people are, what keeps people from buying, and what are their questions and objections." 

Thomas Grabner
Yeah, I would agree to... I think it depends sometimes on WhatsApp from at least what the tickets I would have seen. 

It's just some questions where I would think like, okay, maybe this could just be answered super quickly. But I would agree. 

I think, on one hand side I would better understand the database. But then on the other hand side, for example, if I have cosmetics products, I think something Junglück tested a couple of years back is, if I interact with customer care, I'm way more likely to not only buy their soap but I would buy the whole set of products that are combined together because I get a better understanding. 

And, rather than just purchasing for 30 or 40 euros, I would take the whole set for maybe 100 and something euros. And most likely when I repurchase, I will take the whole set again if the product quality is good and I have my expected results. 

So, I would assume there as well, if I have a product where there is information needed, that is support heavy already, WhatsApp could be a good channel to help people find the products they needed and then also increase their basket size there. 

Christian Hoppe
100%. A personal touch always helps to build connection. And we've also tried that at waterdrop, before WhatsApp was really a thing, to send basically personalized videos for loyal customers or something. And now with WhatsApp, there's definitely a much more direct channel and more direct way to do that. 

Thomas Grabner
Yeah, we will see if it goes more to the WhatsApp route or if people start developing apps or from at least what I understood it should be possible to also send push notifications without your own app. 

I think this could also be a nice channel because it's way cheaper. Instead of paying 11 cents, I could start and send push notifications out, be on the first screen. I would prefer from a brand receiving a push notification compared to having between, I don't know, my best friend and my mom, having a company sending me promotions all the time and appearing in my WhatsApp inbox. I could assume next to WhatsApp, push could be a good channel. 

It's fine to not always do a sell because if I pay 9 or 11 cents you know I need to drive conversions otherwise it gets expensive. 

But if I could do it for free I could, in like in your waterdrop case, I could send them, "Hey did you think about hydration today? You know you should drink, I don't know, two liters per day, take a moment and start drinking some water." 

Or If I have some kind of weight loss product, I could ping them every day and remind them of the routine. Or in the calls of Glow25, I could remind them every morning, you know, "Did you take your Glow coffee today?" 

And I could have more interaction where I would say it's more valuable for the customer as well, not having promotion all the time. 

Christian Hoppe
Yeah, I also know my mom was in WhatsApp groups where you basically have 30-day challenges or something and you just support each other and, and have the feeling there's someone listening to you and acknowledging what you did. 

So, it definitely also helps. And I think if you leverage customer support or the WhatsApp on the other hand, on the brand side, you get the commitment from the customers, right? 

So you help the customers solve a problem, and then you send them a direct checkout link, and then you can tell them, "Hey, let me know if it worked out." They feel also this commitment to go through with this because there is someone on the other side. 

Thomas Grabner
Absolutely. I think this is something, if we would think about weight loss products, like there are so many out there, and there are so many people trying them and I would assume, I don't know the statistics, but 90% of them fail with the weight-loss products. 

And if I would just have this small mechanism where I would check in with people, maybe have a personal trainer, and I could schedule 10-minute check-ins. And if I would help them over a period of a couple of weeks without having like, you know, going back, like dropping weight and going back quickly, I would assume you would have a customer for life and they will buy whatever you will launch that would help them stay on the weight. 

If you could help this first, I don't know, 30 to 60 days and actually receive the result in these competitive places like weight loss or quitting smoking or whatever you would have, I think if you go over this place you would have like the client for forever and they will never switch the company because they have tried five products before and never like really succeeded there. 

Christian Hoppe
Yeah, that's a good point. 

It goes back to what we discussed in the beginning; that having a great product and basically helping customers achieve the desired outcome and solve a problem is the best retention metric that you can have. 

Is there, now we talked a lot about email marketing, WhatsApp, push notifications, loyalty program subscriptions, anything that I missed on the retention side that you wanted to add?

‍

The #1 Retention Metric to Look At

Thomas Grabner
I think we covered the most important points. 

I think it's not about having the next technical hack and this specific flow that we could target somewhere. It's more about, as we were speaking, the product and then also I would say the messaging, and messaging would convert into how do I treat my customer in order to use the product in the right way. 

And how people are doing it. What we could add to the set of topics we have spoken about is kind of taking feedback into account and having, as you're talking about in many LinkedIn posts or in many discussions, firstly post-purchase survey but then also checking in later on. 

How do people feel in the time they purchase, and how do they feel a couple of weeks down the line? Because how they feel when they purchase is how is the messaging, how excited are they, how is the website, how is the value proposition? But, do we even hold up to it? 

If I buy, I don't know, a skincare product. After four weeks I do know how I feel about the product and checking in again and monitoring these kinds of things because a lot of brands, in my opinion, they set up these surveys, they have a post-purchase survey, they have some kind of service but then sometimes you click and the link doesn't even open anymore because they changed some typing from URL and then you're sure they haven't looked into the results for a very long time. 

So, setting up a survey only helps if setting up a survey only helps if you recurrently take a look and work based on these feedback points and gather an understanding there. 

Christian Hoppe
Yeah, that's a very interesting thought. Not just track the data, first of all, also look at the data, right? A lot of people want to do a lot of A/B testing or segmentation, but the end is like, what do you get out of this? 

Regarding this is an interesting thought. I always like to track first directly after the purchase, as you mentioned, then once the customers receive the products. 

And then, as you mentioned, like 2 weeks, 4 weeks after they used the products, because then you have 3 different metrics and you can understand, is it a problem, is maybe the purchase is going well, but okay, I have a shipment problem because, apparently, the rate to the NPS score or whatever goes down at this stage. 

And then later on, maybe the product is not great. So everything is amazing. I'm selling it well, but then the product doesn't keep the promise. That's a very interesting thought. 

Thomas Grabner
And then also, thinking one step further and maybe pushing in the email address and the first name and the last name and maybe even the postal code and then maybe they are AOV or lifetime value and then you suddenly have the list with all of their feedback. 

But, maybe some kind of postal code when you deliver to Austria it doesn't work properly because, I don't know, at the border things get delivered or handled wrong or it takes way longer than you expect. 

Or you could even when you were speaking about the personalized videos you guys did at waterdrop before we could also think about do we have people with very high CLV that have very bad NPS score? 

Apparently, the five others did it before they were happy maybe this time i don't know the postman dropped the product and it broke or something you should be cooling but it was summer and it gets delivered in a bad way. 

Maybe take this top 5% of people and push them into customer care and personally reach out to them if you have some kind of capacity like investing to the couple of best customers because I would assume if I had I don't know eight orders and I was fine and then I have one really bad order where I get the wrong product but then it gets delivered in a bad way or whatever if I would just reach out to these ones, it's include investment into their future lifetime value because probably they will keep on spending more and more to also have this kind of component in your survey. 

Christian Hoppe
100%. 

Yeah, and you can do even automation so that you're not stuck with looking at the metrics every day, every week. You can also say, hey, if there's, as you just said, it's a great example, someone who purchased 3 times, 5 times, 8 times, leaves a bad review, leaves a bad NPS score, get a push notification directly to customer support, and they can do that on the same day. Get something in a Slack channel, a notification or anything up and running. 

A lot of insights, a lot of great cases. I think it's always great to visualize what can be done, how can you implement that. 

Thank you so much, Thomas. I also will remember we had once a discussion where we anonymously shared charts from brands without saying what brands they were, just basically how brands develop. 

And then we said, okay, we can see the returning revenue from this brand stopped, stagnated. So probably they diversified the product portfolio too much. And I guess they just started hiring too many people and then 

Thomas Grabner
Right... Mmm... 

Christian Hoppe
You were laughing and I were laughing because we kind of understood each other very well. What are the challenges? So the challenges are always the same, no matter, you don't even need to know what products they're selling or what brands these are, you understand immediately from "show me the chart" and I'll tell you the state of the business kind of. That was a fun experiment. 

Thomas Grabner
Yeah, I remember when you were saying, "You know, here they hired and here they fired people." And I was like, whoa, you know, you just see the chart of like revenue developing and you don't know the company name and the product line. 

And you even knew how things develop but yeah I would agree. Usually, you can see it from there and most likely even these companies make 10, 20, 30 million a year. They haven't spent maybe even 10 minutes looking at these kind of charts at sometimes. 

So yeah, great wrap up. 

Christian Hoppe
Thanks so much Thomas for your time. It was a very interesting discussion and thank you for joining.

Thomas Grabner
Thank you. Bye bye.