Jordan Gal on increasing AOV with post-purchase upsells
Meeting your customers where they are and building deeper relationships with them is coming to the forefront of DTC in 2020. Today I’m joined by founder and CEO of Carthook Jordan Gal to chat about how brands can start building longer-term relationships with customers from their very first checkout experience.
Meet The Guest
A short summary of the most actionable takeaways and best advice of the episode.
5:43 - Focus on relationships, not just transactions
It may seem like a luxury to prioritize relationships in the world of consumer checkout, but CartHook credits much of its success to exactly that mindset.
“we very quickly realized that in order to make this bigger, in order to have this be adopted as a best practice, we needed to think more carefully about the shopper experience, and move away from just maximizing. And balancing that with the shopper experience being good. And so we changed our positioning, we changed our website, we changed the way we talked about, we changed our pricing, we changed our sales process, everything to orient ourselves toward larger merchants that were more relationship focused, and not transaction focused.
It was necessary for us to be more balanced in our approach instead of just, ‘How do you extract the most revenue from every transaction?’ It was, ‘How do you do it in the right way, that the shopper feels great about it, that you're effectively giving them a gift?"
8:59 - Don’t be afraid to be selective
CartHook’s selective application process let them zero in on their best clients - even though that meant turning down hundreds of thousands of dollars in potential revenue.
“we had an application process with a demo that was required. So you could not get the software, you couldn't get a link to sign up until you filled out an application. If you didn't pass that application and were declined by us, which wasn't just like a marketing thing, like we really declined like 50%. We would just send you a link to our competitor, because we were being serious, like "This is not a good fit for you. This other competitor is the right fit for you." And then you would get on a demo with us, and only once we went through these multiple layers of making sure that we fit.
There's no rule that because you have software, you must allow everyone to use it. That's not true, just like it's not true in any other business.”
12:46 - Identify a “blank canvas” for revenue potential
As you work your way down the funnel, you lose control over time. This is the opposite of how it should be.
“to create a new buying opportunity in between the checkout page and the thank you page, it's a new canvas. It's a new thing that didn't exist before. We knew from the results we had early on, that we should have plenty of confidence around this, because it makes a huge impact. And so, when we made that decision to switch from trials to application process, we did that because we looked at the numbers and we saw some merchants were just smashing it out of the park. People would come on board, they'd be doing 500K a month in revenue and then the next month they would add 100K in upsell revenue. And they would like, they could not believe what was happening.”
15:12 - Follow your instincts to work towards future best practices
Innovation may seem disruptive to users in the short term, but if you are confident that things will trend a certain way, keep going.
“cart abandonment is the same way. It's a no brainer, if you don't email your abandoned carts, you just don't make that money. If you email them, you make, you know, 20% of them convert and you make more money. When we first started the cart abandonment business, we used to get an email, at least once a week, some form of, ‘I can't believe you're doing this. This should be illegal. You should be in jail. This is spam. How dare you?’ And then two years later, we never got those emails because it was adopted as a best practice. And so with post-purchase offers, we knew ‘This is straightforward. This just makes you more money.’”
18:35 - Protect brand integrity at every stage
As CartHook prepares to fully integrate with the Shopify network, they are maintaining their focus on treating shoppers the right way - no tricks or spam allowed.
“post-purchase offers are now going to start to be offered to the entire network. And there's something satisfying and agitating about the fact that the amount of value that's going to be created is enormous!
And there's a lot of pride on our part around breaking through properly, and treating merchants right, and treating shoppers the right way. And we do a lot of things to protect the brand integrity. We limit the number of upsells you can do, we limit, for example, what you can and can't say on the CTA button.”
21:03 - With post-purchase checkout, the magic is in the congruency
You can downsell, upsell, or double-sell. It’s a win any way you slice it.
“in many ways this is like the email that you send out two weeks later, to see if they want to buy something else. You're just moving that interaction all the way through the point of checkout at the initial transaction. And the good part about it is you can base it on what they're buying, and so it makes it very congruent.
And that's where things start to get interesting. People start testing. Some people have a lot of success in selling the same product that was just purchased, which is a bit counterintuitive, but it really works. A lot of people do a downsell to something that's cheaper, but complimentary. A lot of people have been doing upsell into a subscription.”
23:05 - Case Study: Native Deodorant
The example of Native Deodorant illustrates how you can add value and make a profit.
“Make sure it makes sense with what they're buying: how are you actually adding value? A great example of that is Native Deodorant. When they started, they did extremely well with an offer for a travel-sized version of whatever you bought on the checkout page. So if I bought the men's eucalyptus deodorant for whatever it is, $18, they would then make an offer for the travel size version for $4. And everybody took it - it converted like crazy because it made sense. It was actually valuable to me as the shopper.
a lot of these direct consumer brands are known for their one hero product, and then they start to add in new categories. So Native took the post-purchase offer and used that to introduce their toothpaste. And they actually didn't charge for it. They made it free. So it was a post purchase offer that you could add to your cart for free. And everybody took it. And now everyone that knows them for their deodorant, all of a sudden got to try their toothpaste. And because they had already paid for the traffic, and they'd already paid for the initial conversion, it was a beautiful way to introduce, not just cost, not just visitors, but actual buyers to their new product line.”
27:59 - Buckle up for new online purchase technology
There is no question that current technology is lagging. The future of the online purchasing landscape will look dramatically different.
“I think right now the technology and the experience is very, it's a bit stuck. It is still an analogy to the offline experience, right? The category pages are the aisles, the product pages are you standing in front of the product and holding in your hand, the cart is literally called a cart right? Then you go to a checkout and then you, it's very linear, it's like an offline experience. And it doesn't have to be that way. It's online! There's no rules, the boundaries don't exist the same way. But right now, the way the technology is set up, is according to that.”
29:02 - Get creative using the “hub and spoke” mindset
The buying journey of the future can be pictured as a series of customized journeys, based on separate user channels.
“This is the best terminology I've come up for it: where your site is your hub. That is where your returning shoppers go, your SEO, your press, your word of mouth, maybe your email traffic. But when you are spending money on ads, it makes no sense to me that you're sending everyone from YouTube, Instagram, Facebook, Snapchat, and Tik Tok to the same product page. Does not compute. It doesn't make sense to me.
Your YouTube campaign should go to a page that makes sense for your YouTube audience. And then they should go to a cart that makes sense, they should go to a check out that makes sense for that audience. They should go for upsell and a thank you page that makes sense for that audience. And that's a spoke. And you should have as many spokes as you want in your buying experience, based on where the audience is coming from.”