Dive Deep into Data for Lifetime Customer Value, with ShopAgain’s Maruti Agarwal

When a customer shops around on your website, they’re leaving data points everywhere. But how are you using that information to give them a better shopping experience in the future and ultimately increase lifetime customer value? Our guest today- ShopAgain‘s Maruti Agarwal – has a solution.

Today’s episode of Deal Closers is hosted by Izach Porter, brought to you by WebsiteClosers.com, and is produced by Earfluence.

Transcript

Maruti Agarwal: Your customers are leaving that data on your store. It’s up to you, whether you use it or not. You don’t have to be a marketing expert. You don’t have to be a retention expert. You don’t even have to have a technical expertise to start improving your retention with Shop Again.

Izach Porter: All right. You’re listening to the Deal Closers podcast brought to you by websiteclosers.com. A show about how to build your e-commerce business to be profitable, scalable, and one day even sellable. I’m Izach Porter and on the show today, Maruti Agarwal from Shop Again, a tech platform that helps us dive deep into how we can use data to maximize the lifetime value of our customers.

So when a customer’s shopping around on your website, they’re leaving data points everywhere, but how are you using that information to give them a better shopping experience in the future and ultimately increase the value that receiving for the customers and your bottom line. 

Our guest today has a solution. I’m excited to talk to him. Hey, Maruti how you doing?

Maruti: Doing great Izach. Happy to be here.

Izach: Great man. Good to, good to see you again. You are the CEO of Shop Again, but can you tell us about your experiences that led you to notice some of the problems that you ultimately wanted to solve?

Maruti: Sure. I was just attending a lot of these, uh, webinars conferences meetings where e-commerce folks were there and, and the most common setting was that e-commerce business owners were asking, my store is doing great, but acquisition costs are growing and I’m struggling with that.

And how do I, you know, survive? How do I fight this? And that was really the most common cautions I, I noticed. And one thing I observed was these on the other side of these meetings, the other side was, you know, coaches, growth hackers, mentors, and the common advice these guys were giving, how much are you spending on Facebook ads? Let’s double that. Did you try Google ads? How, what about TikTok? What about, you know, Twitter and, uh, YouTube and other channels? 

So I heard it so many times over and over again. It just became repetitive at, at one point of time. And I, and I did this for months in a row. And the most obvious question in my mind was, it’s simple logic, right? If you have to spend more money to acquire customers now, then it only makes sense to make more money out of that acquired customer, you know, increase the lifetime value, focus on customer retention. So I was wondering why are people not talking about it? So I started having a lot of one on one conversations with these business owners.

And what I realized was that their marketing resources were extremely good at acquisition, but retention is not something they’ve experienced much with and retention doesn’t have instant gratification, the kind acquisition has. You know, as a marketer, you can double the Facebook ad budget on a Friday and can go back to your boss on, on Saturday and tell him, you know, you got this extra traffic because of me. That’s not really how customer attention works. 

It’s just a lot of hard work, understanding your customer data, finding your best and worst customers. You know, what do they like? Uh, when do they buy, what do they buy, creating a strategy implementing it. And that is why a lot of stores in this assembly space and Shopify commerce space don’t do that because it’s just a lot of investment from their side.

So, I mean, that’s really how I got the idea of building Shop Again, to make all of this easier for stores.

Izach: That’s awesome. So, listen, this is so important. I want to dig into it a little bit more. On this podcast, we, we focus on ways to drive value for your business to increase the valuation as an owner of a business who may be planning to sell the company either now, or at some point in the future.

And one of the biggest value drivers we see at the time of exit for e-commerce businesses is the customer retention rate or the repeat customer rate. And the reason that matters so much in valuation and ultimately the price that a seller receives when they go to sell their business is because it makes the cash flows are more predictable of the business. If you can continue to sell to the same customer, multiple times, you increase that lifetime value. Uh, it makes your your margins much higher. It makes the cash flow more valuable and it makes the cash flow more predictable. 

So the, the platform that you’ve developed, I think is really important for just operating efficient uh, eCommerce business, but it also goes directly to one of the best value drivers that we see through the exit process for for brands that are, you know, thinking about exiting or getting ready to do it and, and wanna prepare their business to be received by the market in the, in the best possible way.

So Maruti, so, so you noticed this problem, right? You heard it again and again, but how did you go about actually developing a solution for the problem?

Maruti: I think always the biggest challenge is realizing the right problem. So once we knew that, uh, our engineering background kicked in, so we just started having conversations with a lot of eCommerce business owners and managers and marketers to see what goes behind retention know how do they go about improving the retention.

 Once we did that it was very clear most of this work, we can just automate with the experience we have so far, and that’s really what Shop Again was about. So instead of people having to do the hard work of understanding their customer data, creating customer segments, creating strategy, creating, you know, elaborate drip campaigns, our system was capable of doing all of that automatically.

Izach: Okay. So let’s talk about it in a little bit more detail Shop Again, how, how does it do that? How does the technology work? You know, I watched a bunch of videos. The, the results are super cool, but maybe just give us like a, a plain English version of how it actually aggregates that data and then uses it and what the results are.

Maruti: Absolutely. So I mean, I would say it’s just three simple steps in what platform works. So step one is you can connect, uh, Shop Again to your e-commerce stores. And as soon as you do that, the platform pulls your customers browsing data, purchase data, demographic data, and all of your stores history purchases.

Izach: Okay, let’s stop right there for a second. Cuz that, that alone, what you just said is one of the biggest missing links that has occurred in post iOS 14 world, right? How do you actually get data from your customer’s behavior? And then figure out a way to use it going forward.

Maruti: So, uh, we, we install a pixel on, on a customer store and start tracking, you know, the, the browsing and intent data from their shoppers. And that’s very, very valuable data because see guys, purchase data is always, always much, much less compared to the browsing and intent data that is out there. And I mean, it, your customers are leaving that data on your store. It’s up to you, whether you use it or not.

Izach: So you’re learning, so I’ve got a store and I’ve got, you know, 50,000 visitors a month, maybe a couple thousand of those are transacting. They’re completing a purchase, but you’re collecting data from everybody who comes in and tracking what they look at while they’re in my store.

Maruti: Yep. Absolutely, and that’s enormous amount of data that you could actually be using. And that’s what we do. You know, uh, our engine feeds on a lot of data and it uses a lot of browsing data as well, learns from that.

In step one, the platform automatically create 15, 20 plus customer segments. And these are your best, worst, lost customers, and at different life cycle stage, you know, whether they are super active, they’re kind of, you know, slipping away or those who have become unengaged. And then in step two, the platform creates elaborate email, SMS, drip campaigns, uh, which are hundred percent ready to launch.

And these even emails are very well designed, you know, based on your brand’s style, color, product images, description, et cetera. So you don’t necessarily have to change anything. You can just go on the dashboard, click a button, launch those campaign, review everything, or you can change whatever you want.

It’s all on you, but you don’t have to necessarily. And that’s it. That’s the third step. Just go, you get a notification that this there’s a new campaign ready in your account to review and launch, and it takes couple of clicks to review and launch stuff. And you can go back to your daily life. You don’t have to be a marketing expert. You don’t have to be a retention expert. You don’t even have to have a technical expertise to start improving your retention with shop again. 

Izach: That’s fantastic. Okay. What what’s the low hanging fruit out there for most e-commerce companies? Where, where are they leaving money on the table in kind of a way that shop again, can can help with it. Is it in the, just the email marketing, is that the low hanging fruit or are there others?

Maruti: So, one thing is very important, right? I mean, people who are running the e-commerce businesses, they know it very well. Most customers don’t convert with a single touchpoint. It takes multiple touch points to convert someone, right? So it’s very important to have a omnichannel strategy if you want to convert more and more, even your repeat customers as well.

Right? So email, SMS is only the beginning, right? Shop Again supports WhatsApp, direct mail, soon enough push notifications to Facebook and Google audience, so you can retarget easily. So with all of these channels put together, you, you have much more higher chances of converting your customers. Don’t rely on just one or two channels. Don’t do that. Not in 2022 anymore.

Izach: Yeah. Yeah. And look, that’s a, that’s a really key theme. And one of the reasons that we do this segment on the podcast with, with technology platforms is because, what the companies that I see being the most successful right now, and, and this has been true in e-commerce for a decade or more, are the ones that are staying at the front edge.

They’re staying at the cutting edge of what technology can deliver and how they’re using and implementing that technology to drive revenue and profitability for their business. And that that’s constantly evolving. And you know, there was a big evolution last year and the way that Facebook tracks data that some companies got left behind.

And so now the question is, how do you, how do you find that next step, that next competitive advantage within the e-commerce space, that’ll give your store an edge over the other stores and help you continue to grow. That leads to of course, more profit, you know, more sales, more profitability for the businesses.

And ultimately when you go to sell your company, that creates, that creates a higher value for the exit. So it’s a compounding effect on the impact of valuation to be able to stay at the front end of what technology can do to drive your results.

Maruti: Absolutely. And one point I wanna add Izach, you made a brilliant point there. You know, uh, Right now the shoppers have so many different options to choose from, right? The only edge you have bigger than your traffic is actually the brand loyalty. So the one point you made, which a lot of folk don’t seem to talk enough about is having repeat customer rate.

Having good retention rate is really how you separate yourself from the competition, because see, with time, you can also spend 10 times the money on ads and get more traffic. But how much of that traffic keeps coming back and shops again is what makes your brand different from your competition,

Izach: Absolutely. And that if you get those customers to come back, right, and then even if you continue to scale your advertising, but you’ve got the, those customers returning now, your company’s grown exponentially and your advertising cost as a percentage of sales is declining, even though you’re, you’re spending more, more on advertising dollars, you can do both, but if you’re losing the customer, if they’re only purchasing once and you have to go out and pay for that customer, every single time, it’s incredibly expensive to scale.

Maruti: I mean, this is not even a trick anymore. Right? All of e-commerce everybody offers a discount to their first time visitors. Right? So you are already lowering your margin when you’re making that first purchase. And if you just don’t sell them again, you never get the chance to, you know, increase margin with that customer.

Izach: A A hundred percent. Totally agree. So look, I just read an article in Yahoo Finance that quoted you, saying due to the latest AI technology from Shop Again, Shopify stores were able to somewhat counter the challenges faced due to recent advertising restrictions brought about by the ad tech giants and tandem with regulators across the globe. So, what does that mean exactly is that Facebook restrictions, Facebook attribution data changes, what, you know, let’s break that down a little bit

Maruti: Yep. And it’s not just Facebook right now. You know, Google also announced right after that, you know, it’s been few months already now, that in 2023, they will also start, going to take action on your cross app tracking. So it’s, it’s just gonna get harder, and people can’t rely only on bringing traffic by spending money and not building that connection with their customers.

It’s just not possible anymore. So while advertising will continue to grow, I’m not saying advertising is gonna slow, it’s gonna become costly or more and more costly. And targeting might also suffer a little bit. So it will become absolutely inevitable to be able to sell more to your customers

Izach: Gotcha. That makes a lot of sense, and and and maybe that’s just a natural maturation process of e-commerce advertising kind of as a, as an industry or ecosystem, right. That it, the cost will continue to go up until you find that equilibrium point. So you’ve gotta be more efficient with, with ad spent.

Maruti: Absolutely. And there, there’s a popular line that the old trend keeps coming back, right. And you see it in different walks of life. So that’s exactly, you know, I was dis discussing with one folk who was in marketing for few decades and his observation, what that in, in ninties, eighties, the databases were still a new thing, right. All marketers had were some rows about a customer in their databases. And that’s where marketing started from. And that it evolved, you know, Facebook, Google, different ad platform came to be, but now the marketing is going back to basics. You want to use that first party data, which your customers are sharing with you, zero party data.

So it’s, again, going back to the basics, the data that your customer are leaving with you or sharing with you, not just by browsing, but by sharing with, you know, their preferences, their choices, you again, have to start using that to build the brand loyalty.

Izach: Gotcha. Throughout the exit process, as we’re talking with our clients, we talk a lot about KPIs, key performance indicators. So what are the KPIs that, that you track, and how is Shop Again, able to improve some of those.

Maruti: We, I mean, our dashboard shows a lot of KPIs, right. But one portion I would especially like to highlight is we clearly show the revenue, uh, the average order value, even the return rate everything from new customers versus repeat customers. So you get that segment very clearly. And within that, you can further drill down and see which segments are performing better versus worse.

So it tells you to separate the noise, you know, how much your new traffic is doing versus how much your older customers are doing. And that, that’s very important to like look at, that’s not something, you know, most platform allow you to see so easily.

Izach: Yeah. Yeah, that that’s great. And that would be, you know, I, I always come back to thinking about things through the lens of the sale process, but that would be incredibly valuable to know. You know, it’s one thing to say, I’ve got a high re returning customer rate is another thing just to kind of dig into the value of those returning customers and say that their, you know, if their average order value is higher than the, than the first time customers, if they’re, if the margin on those customers is higher, which it likely would be, you know, so that tracking and bifurcating that data between new and existing customers is, is pretty cool.

Maruti: Instead of shying away from showing those details, we really get in, get more and more into it that you can compare all the key KPIs performance from your returning customers, as well as new customers, because that really tells you how your retention is doing.

Izach: Gotcha. Is there any competition out there, who who’s doing something similar to you or are there other companies doing something similar and how is Shop Again differentiated kind of in your mind?

Maruti: So I would say the closest to competitors are, are Mail Chip and Clavio. And the key difference from them is first we are omnichannel. They are not, they are mainly on email, or email and SMS only. We give a lot more capability than that. You know, it’s not just email and SMS. It’s WhatsApp, put push notifications, uh, direct mail, a lot more channels. We also have AI driven product recommendation, which is, which has cross sell upsell in it as well. So all of your data really just comes together automatically, uh, to use.

Second using Mail Chimp or, Clavio… great tools, you know, I respect them, but the entire responsibility is still left on you as an e-commerce brand to understand your data, create your retention strategy, implement it, improve it, and see it through. Shop Again is the only platform which automates that, all of that for you.

Izach: Wow. Okay. That’s great. So what’s on the horizon for shop again, is there, do you have future development, uh, in progress or any, any cool additions that you’re considering right now?

Maruti: Absolutely. So, uh, we are launching woocommerce integration, and next month we are launching a new feature, which is pretty amazing. So what it’s going to do is in your email and SMS automations, the system will automatically test a lot of AB test scenarios and keep finding the best, most optimal settings all the time. So your campaigns will always be optimizing themselves automatically.

Izach: How do you do that? You’re gonna automatically AB test the email campaigns?

Maruti: Yes.

Izach: That’s awesome. How does that work?

Maruti: Oh, 

Izach: you know, without getting into the science…

Maruti: So, I mean, I, I can’t elaborate a lot on that, but let let’s just think about, there are a lot of things within a campaign which could be actually, you know, tested and founded because it’s, it’s, there’s never one scheme which works for everyone for every store, right? Every, every store is very different. Their shoppers are different from each other. 

So it becomes very important for each store to find what really works for them. And again, our, our thesis is people are sick of new tools. Nobody wants to, you know, try a new tool or learn a new tool. And I’m telling them my tool is easier to use is, is the same pitch people have been using from last, you know, few decades.

So what we are trying to build is really automate the tool for you, so you don’t even have to learn a new tool. And that’s why, you know, we are automating a lot of testing so that everybody says testing is good, but not everybody’s willing to put in the hard work on creating those tests. Our system will analyze your data, create those tests based on your data and keep finding the, the right ones and keep deploying them automatically.

So I’ll tell you one thing, this is actually a, a pretty good point. 80% of the AB tests that are done by marketers are actually wrong. They don’t collect the right population, right amount of data to make the conclusions, uh, they’re driving. Most of the times people get some conclusions, which they want to see and they say, you know, this is working already. Now because our system is doing everything automatically.

Izach: 80% of…?

Maruti: 80% of the AB tests are actually wrong.

Izach: Right? So you got, you got a 50% chance of guessing correctly in an AB test, 80% of the time you’re wrong.

Maruti: It is actually the case because people jump to conclusions that they want to see.

Izach: yeah.

Maruti: That’s exactly what is happening. And this was reported in a research article actually, I can find out the reference for that, that 80% of there we test are done wrong, actually. We take that element away. You will be doing AB testing and you will be doing it the right way.

Izach: Hmm. That’s that’s huge. All right. So look, if there’s one call to action that you would want our listeners to take from this conversation, what would it be?

Maruti: Hit me up on Twitter, LinkedIn, you know, uh, Facebook, wherever, and let’s schedule a demo. I would love to show you.

Izach: Okay. And I will, I’ll say I, I, uh, have done a demo with Maruti and it’s, it’s fantastic. It was super cool, very eye opening, so blown away with it. I, I wanted to get you on the podcast today to talk about it so we can just educate more people on, on what you’re doing.

Maruti: Absolutely. It, it, it hurts me to see, you know, I’ve seen it with several e-commerce folks. Now that they’re after iOS 14, their, uh, Facebook, Instagram app campaigns just kept on doing worse and to the level, you know, they almost went out of business. So, you know, I tell them every day now focus on your existing customers too, while you should continue to focus on acquisition so that you can build a solid business, which can continue growing.

Izach: Awesome. So Maruti how can our listeners connect with you and shop again?

Maruti: Again, as I said, you know, I’m pretty easy to find. LinkedIn, Twitter. My Twitter handle is @marutiagarwal, which is my full name, or just drop me an email at [email protected]

Izach: All right, that was Maruti Agarwal. And if you’re looking for more revenue from your Shopify store, check out his company at shopagain.io. 

Thanks everyone for listening to this episode of the deal closers podcast brought to you by websiteclosers.com. If you like the show, be sure to rate us, write a review, press the follow button and share it with your network. And of course, if you look looking for help and of course, if you’re looking for help selling your eCommerce business, be sure to visit websiteclosers.com. This episode was edited and produced by Earnfluence I’m Izach Porter, follow me on LinkedIn, and we’ll see you next time on the Deal Closers Podcast.