April 2, 2020

Ep. 12 – How To Leverage Subscription Revenue Channels On Shopify – With Rob Barr

Again, we’ve been approaching this in a very
similar fashion to Shopify. We don’t want to be experts in every single field. We’ve
got our core thing, which is subscription billing. So, we spent a lot of time thinking
in the last 18/24 months, identifying which technologies people are using, why they are
and where we can organically connect with them. Welcome to Honest eCommerce where we are dedicated
to cutting through the BS and finding actionable advice for online store owners. I’m your host, Chase Clymer. And I’m your host, Annette Grant. And we believe running an online business
does not have to be complicated or a guessing game. If you’re struggling in scaling your sales,
Electric Eye is here to help. To apply to work with us, visit electriceye.io/connect
to learn more. And let’s get on with the show. On this episode of Honest eCommerce, we talked
to Rob Barr, the lead of partnerships and enterprise sales at ReCharge, a subscription
billing platform for Shopify. Hello everybody and welcome back to yet another
episode of Honest eCommerce. I’m sitting here next to Annette Grant, who’s smiling ear to
ear. And today we welcome to the show a subscriptions expert, Rob Barr from ReCharge Payments. So
Rob, what makes you so expert-y at subscriptions That was a terrible word but we’re going to
keep it. (laughs) And I’m smiling. I’m excited to talk
to you, Rob. And learn about subscriptions. I like the expert-y term. So for myself, I’ve
been with ReCharge now for 2 to 3 years. When I joined, we’re a very small team of five.
We’ve now since scaled up to around 75. So with that, we’re really seeing the trajectory
of both ReCharge and also just subscriptions in general, on Shopify in particular. And
just seeing how it spanned away from just smaller merchants on Shopify, testing out
the model, transitioning over to these huge conglomerates and you brand new direct-to-consumer
brands coming into the space, and really taking this to a whole new scale. So just having
visibility in the last three years, I feel, gives you some expert-y skills in the arena. Do you want to let our listeners know, give
a brief description of ReCharge and what it does for the Shopify store owners? Sure. I’m sure everyone on Shopify knows they
try and give you around 80% of all you need to run a business out of the box. But there
are those nuances and particular elements to a business that they don’t offer out of
the box directly. And with that they tend to rely upon like a 20% model with experts
in their fields, and that there’s something from the platforms that they can plug into. And also, as with Chase from Electric Eye,
also the agency side as well. And for ReCharge, which it came out of an agency about five-six
years ago… And part of that agency was looking at new areas on Shopify where the core offering
wasn’t covering, or giving the merchants the best experience. And there was no and there’s
still no recurring billing tooling within the Shopify platform. It’s all external. And so with that, we’re the only Shopify Plus
Technology Partner for recurring billing. And so with ReCharge, we handle the entire
subscription lifecycle for both subscribers and owners who want to offer a recurring revenue
model on their storefront. Be it a subscription-only box, or alternatively that kind of consumable
Subscribe & Save model. Absolutely. So I feel that… And you can
give me… This is just my opinion here, but I feel like the subscription model, maybe
a bit more in the past year or so, was not gimmicky but definitely like a buzz term in
the eCommerce space. Do you feel that you saw an uptick of stores branching out from
their traditional model and adding in like a subscription thing? Yeah. There’s definitely been a range of that.
We’re also seeing certain brands transition, whereas before they were no one-time purchase
first. Now, the primary objective, and it’s all the call to actions are around subscription
by default, or even brands whereby the only option to purchase is just their subscription
model. Arguably, there are larger merchant base out
there, but also relatively new, since as you say, it’s historically seen as quite gimmicky.
A lot of it was down to the fact that tech stacks, historically, were kind of opaque.
For both the subscriber; It’s been very difficult to navigate, cancel, control, edit; And the
same for the merchants as well, not a good experience. All that’s changed. So we can give that subscriber
an emotional experience out of the box. It removes a barrier to entry and also a lot
of the fear about setting up a subscription business. And did you say… Is ReCharge only for Shopify
Plus store owners or is it available to everyone? We are available to everyone. Okay. Shopify Plus merchants, we’ve only two, have
gone through the Plus vetting process. Things like scales, stability, etc. Okay, great. I just wanted to confirm that. Yes, I’ve actually used ReCharge on quite
a few client applications this year already. So it’s a great platform. And again, I say
this every time I have like an app partner on. He’s not paying me to say this, I’m trying
to bring quality to the people. And so with my store, if you wanna… Could
you give me some… Give us some examples of the most successful new subscription models
you’ve seen recently? Kind of disruptors? Yeah, of course, I think it spans two areas.
One is the expectant model and then one’s where it’s kind of a bit of a curveball for
us as well. I’d certainly expect inside… If you’re a consumable brand, and you really
want to look at best practice for how to approach things like incentivizing subscription over
a one-time purchase, looking at things like incentivized trial flows, I would say Dr.
Axe are a fantastic example of a merchant doing that at scale. Can you spell that? Dr. Axe? Is that what
you said? Yeah. Like A-X-E? Yeah. Like Doctor then A-X-E. Okay, I’ll check that out. A similar vein, My Lola, they’re a very new
brand. Only 2 to 3 years old. They’ve come in to transform the feminine hygiene space
with natural products. Getting away from concepts of highly chemical, traditional model. And
again, it’s subscription-only. For them, they’ve really optimized the idea of the customer
narrative. So, how do you truly engage with your consumer
base, and transform it from a transactional experience where you’re just buying a product,
one or two times from them. But you are part of the business, it’s conversational. That’s more of a partnership between consumer
and merchant. And that’s all driven by the subscription model. So, driving that conversation
wherever they can and the engagement. And that is amazing. So I have a sidebar question.
Do you feel that Amazon, with their introduction of the Subscribe & Save model, helped increase
that acceptance into the public and maybe help these businesses use that model to their
advantage? Absolutely. Amazon, where they are… They
are smarter at what they do. We’re at the point now where a lot of our default terminology
that we use is around Subscribe & Save since it’s just so embedded now in the consumer
mindset. It just makes sense. And see, I think that’s true. And also a lot of trust, as well. The consumer base, they understand now what
the model, is how it works. They can edit, they can cancel, they have control, which
I think Amazon has done a great job of. And I think also interestingly, –and this ties
into this idea of the curveball I mentioned earlier is– Amazon’s still pushing new boundaries
and subscriptions. So Amazon Prime, where you’re subscribing
or becoming a member for something that isn’t necessarily a physical product that arrives
on a certain frequency. You’re more became a member to get access to fringe benefits.
We’re now seeing that being adopted as well by our consumer base. So a great example of this is the company,
Freshly Picked. Where it’s a high end, child’s moccasin, which historically we would’ve said
is not a great fit for subscription (services). But what they’ve done is implemented a membership
model where you sign up, any money you paid towards membership accrues its credits, so
you can use that at any time. But more interestingly, you get early access
to new products, the product line, their launch, free shipping on any purchase. It’s going
to give that gated access and community that you don’t get by being a single transactional
consumer. That’s a great idea that I haven’t really…
I don’t utilize that in my store, but that is smart to get that early access. Besides
Dr. Axe, My Lola, what are some other merchants that are just doing a great job of optimizing
their subscription channels, that our listeners could go to and check out what they’re doing? Sure. I think a good example right now is
Bulletproof Coffee. They’re doing a great job of approaching subscriptions in a very
personalized way. So, you go through their purchase flow, you’re building out a bundling
of products that are really aligned with your needs. A similar merchant as well that really enjoys
purchase experience is a company called, We Are Ladder. It’s actually founded by Arnold
Schwarzenegger and LeBron James as their protein brand. And again, a very similar flow where
you’re not going through self-identifying a product you want to purchase. It’s taking you through a kind of a quiz whereby
you say no, I’m a male, female, this age bracket, this is how active I am. Here are my goals.
And with that, they give you a curated experience and say these are the products, the frequencies
that we think are most aligned with you. And then beyond that, again, really tying
in that conversational narrative whereby… Think of it as the street view as a consumer.
They know who you are. Targeting you with very appropriate content. They’re upselling
you with the appropriate products where necessary. So I think they’re both really good examples
of really optimized subscription purchase flows. But also, again, that ongoing relationship
and how that’s being handled. And is ReCharge, is it only subscription on
physical products? Is there any digital product at all? Historically, we’ve very much been a physical
product service. Okay. The reason, just being the Shopify itself.
Naturally has been a… Right. …physical product platform. Okay. We are seeing a breakaway from that into digital.
The caveat to that is that the digital can be a little bit more complex. I would really
advise, if you’re approaching digital subscriptions, engage with experts, like Electric Eye, to
really work with you on that because there’s a lot of nuances and… A lot of moving parts. Gotcha. Okay. I actually… With all these examples you
brought up, it’s actually something that I want to challenge our listeners to go do.
So, go look at every single subscription –not all of them– but go look at a few of them.
And you’ll notice that all of them are vastly different. And anytime that we engage a project with
a client to help them with their subscription model, they haven’t thought it all the way
through. And I want to be blunt here. They’ll be like, “Yeah, I want subscriptions. I want
like… This product, we’re going to have a subscription thing to it.” We’re like, “All
right, cool. So is the free shipping on the first order? What about the second? What about
all the concurrent orders? How do the discounts work?” There’s so much to consider and so
much to figure out and think about. It’s its own little business. Yeah, I would absolutely agree with that.
Chase. It’s very rare. You have an out-of-the-box, cookie-cutter solution. Particularly when
it comes to any period of scale or enterprise-level merchant base. So, is that something that ReCharge would
walk the customer through when they install the app? Or would they need to get, like an
Electric Eye, to help them out with that? How out-of-the-box is it easy for someone
to set up? It’s very simple to get setup. We have our
support team, we have webinars to guide through kind of basic installation. Okay. But it’s normally getting to this sort of
idea of you know, as Chase mentioned, how do we dig into incentivizing flows and also
the negative purchase funnels. But anything that’s a little bit out of the ordinary, that’s
always either work with our teams’ consoles and work on what a solution for to look like,
and then definitely work with experts to actually get that implemented in a successful fashion. Simplr Ad
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then what’s the fee for ReCharge? Is it a one time fee? Or is that monthly? We’re a monthly fee. And that’s variable,
depending upon the monthly recurring revenue, of course, the platform. And there are varieties
then depending upon scale. So yeah. Our default fee is $40 a month and a 1% processing fee.
But at scale, that does vary. So I’d say at that point, just ping the team and we can
give you guidance on what the fee would be there. Great. Wow, that’s really affordable though
to get into the game, if you want to give it a try. Yeah, and you know. We really start charging
you when you become a successful business. So it’s kind of a win-win on both sides. Right. I think that’s a low risk for people
if they’re on the fence about trying it. I mean, it’s already built there. I think if
they’re on the fence, definitely just go for it at that price. We do have a 60-day free trial. So again,
you have two months to see if it’s working and valid for your business or if you’re gonna
optimize it in that two-month window, it’s always available as well. That’s great. How are you seeing these businesses leverage
other technologies with these subscription models? And especially with marketing? Yes, it’s a great question. And again, we’ve
been approaching this in a very similar fashion to Shopify and that we were… We don’t want
to be experts in every single field. We’ve got our core thing, which is subscription
billing. So we spent a lot of time, particularly to
the last 18-24 months, identifying which technologies people are using, why they are and where we
can organically connect with them. And so there’s at least two or three, that I’d say,
are really prominent in my mind. First is Klaviyo, which if you’ve not heard
of them, is a great marketing solution. We’ve seen them being used to great success with
ReCharge. And again, tying back to conversational commerce, making sure the right contents going
to the right people at the right time. And I was looking forward to their conference
late last year. And seeing the merchants in that conference,
it’s very much almost a cult-like (laughs) engagement with the platform. They really
do see this huge impact on their personal brands. And a lot of them credit the entire
success, the business, down to the impact Klaviyo has had. So, I’d highly recommend
taking a look at their solution, particularly if you’re using ReCharge as well. And another great tool that we’ve seen…
This is quite idiosyncratic to ReCharge. In that, we have our own checkout environment
that is really making sure that your data is consolidated across both one time purchase
and recurring, and you’ve got the same visibility into your Google Analytics. So with that tool, that we were very much
a proponent of is Littledata. And they’re great at predicting the ReCharge standpoint
and making sure… They can really, genuinely, attribute LTV back to certain campaigns. Tying-in
things that your cohort analysis to make sure that you’re really putting in the cash to
marketing and your efforts there, appropriately and effectively. So, I really would suggest
looking at those guys. And then moving beyond that, just kind of
go into the day to day of the business, there’s some brand new tools out there –I say, brand
new– relatively new tools out there in the support space. One, in particular, is Gorgias.
Kind of a strange spelling. They’re a great support desk built for eCom. Shopify is one
of their biggest integrations. And with us, it’s also tying in that ability
to handle support requests about your general eCom but also with subscription, all from
the same place. So really, removing the time drains on the team internally. I have a question about how the subscription
starts showing up at the backend of Shopify. If I were to fire up a subscription model
and I just.. –I know it’s different– Maybe some things are shipping out daily, or maybe
it’s just a once a month drop. Was all that stuff just suddenly populate
in your Shopify orders? or do you prompt… Are you prompting the store owner ahead of
time? What kind of reporting like… How does that change shipping, order fulfillment, things
of that nature? I know that’s a large question, but I’m just
wondering if I fire up the subscription, do I see it in my sales? And then I… Then does
it reoccur again, to ship it out? I’m kind of just like, “Wow, I can’t really wrap my
head around how that starts to populate in the back-end and then have to fulfill those
orders. Sure. Very short answer is, yes. All of the
above. But to give a little bit more context, we do have very deep integration with Shopify.
So yes. If someone goes to the checkout for ReCharge, we’ll generate a customer record
for them in Shopify and then also generate an order in the Shopify fulfillment queue,
same as a one-time purchase, and then all the subsequent logic about when and how our
customers are billed, we’ll handle that. We’ll also handle things like dunning. So in the
event of a failed transaction, we will automate what we can to recapture that payment. Okay. And whenever we can, we have to get after
that payment, we’ll push orders into Shopify. So your fulfillment queues, they’re all the
same. Notifications, all our communication channels are handled by ReCharge, as well.
Customizable, so we wrought on-brand. But it’s really a hands-off experience. Once
our thing is set up, its customers go through. The only interaction from the merchant standpoint
is in the event of a support request, or maybe intervening if there’s been an issue with
someone’s payment, for example. Mmkay. And then there’s reporting for us,
as far as being able to make sure that our inventory is stocked in time for that subscription
that needs to be fulfilled the next month. Are those really robust reports you can get
in Shopify, for your subscription? They are. Yeah. Okay. So we have tools around respecting Shopify
inventory. And then yes, we also have things like upcoming order reports, which you can
pull ahead of time. Make sure that you’re pregaming your inventory and there are no
excuses. Suddenly, “Oh, I have 1000 people tomorrow ordering this one product and it
is not available.” So yeah, we definitely try to make sure that doesn’t happen. Yeah, that kind of goes along with like, Chase
saying customers… Say, I want to start a subscription. And then all of a sudden, I
just went into like, Yeah, that’s a great idea. But then I started thinking about inventory
and fulfillment of like, “Wait a second. That’s a whole…” Like Chase said, it’s almost like
a sub-business of your current business to make sure you’re managing that profit… Yeah. Are you shipping all of your orders
out on the same day? On the day that they originally placed their order? And also with
billing. How are you doing billing? It’s so much stuff. Okay. Well, I have a lot to think about. (laughs) Oh yeah, you do, Annette. Annette was like,
“I’m gonna start a subscription t-shirt…” Yeah. Like, I’m launching it today. Let’s
do it! I’m signing up. But I’m going to pause and think about that one for a little bit. Oh, you’ll be… It’ll be fine. So, outside
of subscription… You’re in the eCommerce space every day. What are some tips and tricks
that you picked up along the way that you’d want to share with our audience? The one thing I just said that I would say
to Shopify merchants is to make sure you’re on top of your integrations game. There’s
plenty of people out there every day launching new apps, new platforms, that are really aren’t
that optimized for your business. And so, we see merchants migrating over from
different platforms and they come through with a particular set of requirements which
when you really dig in and say, “Half of these, you can just completely automate or be hands-off
with through tools like Klaviyo, for example. Gorgias, Littledata… –To reference the
ones I mentioned earlier.” So I’d say A – Make sure that you actually
have installed all the ones that make sense for you but also keep a finger on the pulse. Make sure as they’re launching a new release
new integration or the tooling, that you’re always rethinking. It’s almost doing an audit,
I’d say, every at least every six months of your tech stack to make sure that… A – It’s
optimal for what you’re doing and B – All those pieces are talking to each other in
the best way. Yeah, I feel like every app is actively working
on… Especially the top players. I’m definitely a Klaviyo evangelist over here. It’s one of
my favorites. All of them are, more and more, creating integrations between each other so
that they work together, share data and you can create flows and create incentives and
create just… It’s usually on the marketing side or anything
really. But they that they’re actually talking together. And if you’ve set it up once and
that wasn’t there the first time, you got to make sure you’re going back in there, checking
out the new stuff that gets added every couple months. Absolutely. So, with that as well, think about
why you’re on Shopify and not on Amazon. There’s something our CEO, Oisin talks to about a
lot is, this idea of commoditization versus rich experience. You’re selling to Amazon,
you have a very limited way of communicating with your customers or limited ways of showcasing
your product. With Shopify, you can start to build out a
richer experience, more as though you’re almost in store. How do you have a narrative? How
do you engage their customers beyond just raw basic PDPs? How do you communicate an
after-purchase? There’s so many opportunities there to have
a better experience between the merchant and the subscriber or just general consumer. So
just leverage Shopify. Make sure it’s not just there as a standalone Amazon clone, as
it were. Absolutely. I mean, I think Amazon definitely
brings technology to the game. They’re actively just doing crazy, cool stuff in the space.
Their margin is… They’re doing so much business that they can do the slimmest margin so you
got to have a better experience with your brand and really incentivize and captivate
and wow –and your customer experience gotta be top-notch– if you want to compete on eCom
these days. Build a community. That’s what you need to
do there also. Rob, Do you want to point our listeners to where they can find you and where
they can find ReCharge? Unknown Speaker
So the easiest way to find us is through rechargepayments.com. From there, there’s a big call-to-action,
“Get your free trial”, which will direct you off to the Shopify app store where you’ll
download. So yeah. If you have any questions our support team is always available [email protected]
Or if you like to grab me directly, I’m [email protected] as well. Well, we’re so thankful that you came on the
show today. I know I’m excited to check out the brands that you spoke about. It has my
wheels spinning about what a potential subscription is for my community. So thanks for being on
the show. And hopefully, we’ll talk to you again, once I have my subscription up and
running. Well, Annette, Chase, really appreciate the
time today. It’s been great chatting with you both. Thank you. Awesome. Thank you. We can’t thank our guests enough for coming
on the show and sharing the truth. Links and more will be available in the show notes.
If you found any actionable advice in this podcast that you’d like to apply to your business,
please reach out at electriceye.io/connect. Please make sure to subscribe to Apple Podcasts,
Spotify or your podcast app of choice.

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