Matt Schlicht & Ben Parr on personalization
Personalization has been a hot topic in marketing over the last couple of years. And the expectations from consumers for brands to speak that language has never been higher. I talked to Matt Schlitt and Ben Parr, the founders of Octane AI about the impact personalization can have on an e-commerce business and how to implement personalization that delivers on the promise of actually improving the customer buying experience.
Meet The Guest
A short summary of the most actionable takeaways and best advice of the episode.
03:46 - Octane AI was founded on the desire to enable conversation
Founders Matt Matt Schlicht & Ben Parr realized that most conversations were happening on 1-1 private platforms like Facebook Messenger.
“when we started Octane AI, our initial focus on this was the conversational aspect. And it was purely from the perspective initially that people were talking to each other over messaging apps. You would talk to your friends, you would talk to your colleagues. This is where the majority of your conversations happened. It wasn't over email. It wasn't even in person, it wasn't over Twitter. It was through private conversations on messaging apps. And so that was the initial thought was okay: this is where people are hanging out. This is where people are talking. Businesses don't have a way to hang out here. Somebody should fix that.”
04:37 - Two-way conversations = superior to email
A personalized conversation provides so much more insight than tracking open & click rates.
“the thing that is different is what has led us to what our greater vision is, which is personalization. If I send you an email, it's a one way thing, right? I'm going to send you an email. I'm going to measure if you open it, I'm gonna measure if you clicked on something, maybe there's something else I can measure you on. But it's not a back-and-forth conversation. You're not telling me anything that you're thinking. You're not communicating with me as a brand, like a person. This is what building for Facebook Messenger allowed us to realize, is that if you suddenly start communicating in two-way channels, that you can learn infinitely more from your customer than if you're just measuring open rate and click rate.”
08:41 - Personalization gets customers what they need, faster
Example: you wouldn’t recommend the same skincare products to a teen and a 40-year-old.
“now with this data, we can utilize it to do super, super powerful things with the rest of our products. So you know, before we launched Shop Quiz we had Facebook Messenger, we’ve had SMS and we've had pop-ups. And so those kinds of products are enhanced by the data from the quiz. So just being able to say like, okay, they are 18 and they have oily skin, and this other person is in their forties and they have dry skin. They have very different needs. They're very different groups. Don't send them the same message, they're not going to need the same products. You can send them two very different messages because of Octane AI. You automatically create a customer list based on that data. And then you can automatically create a followup or a targeted message or a broadcast message based on that data. It makes it better for everyone.”
10:36 - Learn how to ask (and answer) the right questions
Think about the questions common to your business, and the common Q&A chains that result.
“if you're a brand and you have an e-commerce store, you already know that there are certain questions that people come to you with, and there are certain such scenarios or situations they come to you with...And I think you also know that if you were in person and somebody walked in, if you had a physical store and you wanted to help recommend them the perfect product, you know, based on the type of product you have, there are a certain set of questions that you're probably going to ask them. And depending on what their answers to those questions, there's probably different sets of questions that you're asked going to ask them. And you're not going to just ask everybody the same three questions, because that's not how you talk to people, right?”
15:40 - Quizzing customers can uncover surprising insights
While the purpose of a Ship Quiz is to recommend products, they can also help uncover bigger motivations that are happening in the background.
“if you would ask [Doe Lashes] like, hey, do you think most people who buy lashes from you have never bought lashes before? They'd be like, nope, that's crazy! Of course, people have worn lashes before. But now that they know this information, by having this automated conversation, they were able to then go to Klaviyo and start creating a custom welcome series that is primarily focused on educating people about how to use lashes and why you use lashes and what lashes are, which caters to what they realized was their largest audience. They're able to go to Facebook and Instagram and now create advertising strategies. And so I would argue that the biggest value that they actually got out of the Shop Quiz wasn't necessarily the surface level ability to recommend products, but was actually having a deeper understanding of their customers that then can get carried over.”
21:12 - Personalization is no longer optional; it’s a must
With thousands of brands competing for market share, differentiation is how brands can stand out.
“I think there's so many brands that are getting started. And I think if you listen to any Shopify earnings calls that you will have a very good understanding of the crazy number of people who are starting e-commerce brands. And so that means that for any product that you are thinking of, there are potentially thousands, if not tens of thousands of other brands - maybe even millions in some of these categories - where they're selling very, very similar products to you. So simply offering a product online, which maybe would have worked like 30, 20 years ago, is no longer a differentiator. Your differentiator is no longer, ‘Hey, you can buy this product on the internet,’ because now you can buy any product from the Internet. And that forces brands to figure out, well, what can I do to differentiate with everybody else? And that's where things like brand comes in, and building customer loyalty, and personalization, and conversation, and actually building a relationship between the brand and the customer.”
23:30 - Mimicking physical shopping is more important than ever
With so many people shopping online for the first time ever in 2020, the goal is to help mirror the human element.
“this year is unique in the sense that obviously e-commerce had a huge boom due to the pandemic. But I think a lot of people forget that for a lot of people this year, this is their first or second time ever shopping online and e-commerce. And traditionally they've gone into retail, and they've had the associate or the concierge or the person that they trust, who knew exactly what they were looking for...They're like, I don't know what I'm doing and they drop off. And, you know, the average conversion rate for Shopify stores is under 2%. The quiz and the direction we're going is to build those elements that make in store shopping really great, which is especially that human element and that guidance.”
25:41 - Start collecting data right now
Even if you do nothing with it, you need to have it or you’ll quickly fall behind.
“So step one, get a quiz up. Go learn about your customer. Even if you don't know exactly what you're going to do with the data, you need to start collecting the data now. Especially as your competitors and like other brands are collecting this data, and Amazon and others are collecting this data. And if you're not collecting this data now, and you're not doing this with your customers now, you're going to end up farther and farther behind.”
27:31 - Set up a Shop Quiz as a standalone page
For a great example, checkout this quiz from Rooted
“the best practice for a Shop Quiz is that you create a standalone page for it. Depending on what kind of a business you have this could be called different things. It could be called a bundle builder, a routine builder, a mattress finder, a skincare finder, you know, a hair consultation. There's lots of different ways that you could frame this conversation. But in the end, the goal is to ask you a short series of questions and then recommend your products and track everything so that you can re-use it across all your marketing channels. So you put this on its own page, it fills up the entire page. If you want to go look at a really great example, go to rooted.nyc. It's a plant store. Their Shop Quiz is the most absolutely stunning thing you will ever see. You'll look at it and you'll be like, I can't believe they didn't custom code this.”
30:00 - The future of personalization = channel unification
Right now, different apps and tech don’t talk to each other. Octane AI hopes to change that.
“right now brands use lots of different communication channels to talk to their customers. You have email SMS, Facebook Messenger, your website itself, ads on various platforms. And it's very typical that these are powered by lots of different apps that you might use or different tech solutions that you might use. And what this means in the current situation is that if one of these apps learns data about a customer in one place, that data is not getting passed to the other areas. And so you might have Facebook ads that are starting to personalize to you, but the SMS is not starting to get personalized to you, or vice versa. What we're focused on right now is changing that, so that the brand has one unified relationship with the customer.”
31:54 - The digital future is bright
Today we are mimicking physical shopping. But the long-term possibilities of digital personalization are endless.
“there are certain things that you can do in a digital world that you can't do in the physical world. So that you could actually take personalization, you know, to a whole other level. And so if right now we're focused on providing, you know, parody with what you could do in a physical location, the next step, looking 5-10 years down the line, is doing things that are not possible in a physical location and are truly native to a digital environment.”