Optimized Ecommerce EP 044 – How Continuity & Recurring Income Can Help Grow Your Ecom Business
Today on The Optimized Ecommerce Podcast, Brad Owens joins Tanner Larsson to talk about one of the areas in the eCommerce industry that Tanner loves to talk about and that is, continuity and recurring revenue. Dive in today’s episode and learn how you can use and build continuity and recurring revenue to grow your
Welcome to Episode #044 of Optimized Ecommerce – How Continuity & Recurring Income Can Help Grow Your Ecom Business. I’m your host, Tanner Larsson, CEO of BGS.
BGS means Build Grow Scale! It is a community that we founded where eCommerce entrepreneurs and physical product sellers come to learn how to take their businesses to the next level.
Brad Owens is a returning guest on the show, he is one of the BGS Revenue Optimization Experts who work with our amplified stores. He has been a BGS customer and been using continuity and recurring revenue to grow his ecom business.
Brad is also one of the head coaches in our eCommerce business blueprint, our beginner’s training program for people who are trying to start a store from scratch or figure out what they want to sell. He works along with Jeremy Friedland, and they do a phenomenal job.
Here’s just a taste of what we talked about today:
Tanner discussed what continuity and recurring revenues are.
Continuity is recurring revenue that can be set on a monthly quarterly or yearly basis. It is a predictable recurring revenue where people sign up once and get billed ongoingly. This is very common in some of the most popular products such as supplements and consumables.
Brad talks about the more popular ways continuity is used in the eCommerce space.
Popular platforms such as Amazon Prime is an example of a Buyers Club. Also, Costco and Sam’s Club used continuity by prompting people to sign up to get discounts, free shipping, or get a digital product every month.
Some stores go a little step further with a micro continuity program where their customers pay $3-$5 a month to join and ship out inexpensive or expensive jewelry from Alibaba or Aliexpress. Some stores that sell essential oils and diffusers send out newsletters with amazing information that buyers are going to want to have.
The other big thing right now is boxes. They can be mystery boxes, they can also be themed boxes. People these days, love to order boxes, they love to open and record themselves while opening the box, which is great for user-generated content that stores might get.
We also discussed a few other fun topics, including:
- The kind of product that goes well with continuity.
- Brad’s experience in building continuity and how it worked out for him.
- Some stores have a great continuity program.
- Effective ways to use Buyers Club.
- What are some of the best ways to sell a continuity?
But you’ll have to watch or listen to the episode to hear about those!
How To Stay Connected With Brad Owens
Want to stay connected with Brad? Please check out their social profiles below.
- Website: BuildGrowScale.com
Also, Brad mentioned the following items on the show. You can find that on:
Tanner Larsson 0:07
Hey everybody, welcome back to The Optimized Ecommerce Podcast. I’m Tanner Larsson, your host, and today we’re joined by Brad Owens. He is one of the BGS team members and the revenue optimization experts. This is a repeat performance for Brad, he is a repeat guest he’s been on a couple of times before and will be on many more times in the future. But today Brad and I are going to be talking about a topic that just is super near and dear to my heart. It’s one of my favorite topics in the ecommerce and online business space. And that is continuity and recurring revenue. How do you use it? How can you build it into your systems? How can you build it into your business and all of that, the cool thing is I love to talk about this. I have an entire chapter on it in my book, and I’ve created courses on it. And it’s one of those things that I will preach from the rooftop to everybody who will listen to me it’s my soapbox. When I met Brad, Brad was a customer, a student of Build Grow Scale. And he was doing it, he was using what we talked about, cuz a lot of times I’ll say something people go Oh, yeah, that’s cool, but they don’t do it. Brad actually did it in his business before he came to work with BGS. And he’s also a huge fan of continuity and using recurring revenue to grow your business and stuff. So we’re going to be talking about that is really cool. A little background on Brad, just as an update, in case you don’t know, Brad is one of the revenue optimization experts here at Build Grow Scale, he works on our amplified partner store. So he’s one of the guys in the trenches working with our team to scale large ecommerce brands. And then on the flip side of that, he’s also one of the head coaches in our ecommerce business blueprint, which is our beginners training program for people who are just getting off the ground trying to start a store from scratch or, figure out what they want to sell. And he’s one of the lead coaches in that along with Jeremy Friedland, and they do a phenomenal job. So Brad really gets to see both sides of the equation from complete startup all the way to scaling eight-figure brands. So it’s got a really good knowledge, as well as his own personal experience growing his own brand. So Brad, thank you very much for joining us today. Appreciate it.
Brad Owens 2:13
Well, thank you for having me.
Tanner Larsson 2:14
Absolutely. So let’s get into it. Let’s talk a little bit about continuity. So continuity is what we’re talking about here is recurring revenue, whether it’s on a monthly quarterly, or yearly or whatever basis, some kind of predictable recurring revenue where they sign up once and get billed ongoingly, very common in the supplement space, very common in consumables. But those are some of the most popular ones. But why don’t you kind of go through some more of the popular ways continuity is used specifically in ecommerce.
Brad Owens 2:47
Okay, the one that you should be very familiar with is going to be Amazon. So if you’re on Amazon, you probably have amazon prime. And that’s an example of a Buyers Club. Another example is Costco or Sam’s Club, you can do that for your website, where people can sign up, and they can get discounts, they can get free shipping, they can get digital products or anything like that. It’s just recurring revenue every month. And you can even go a little step further with a micro continuity program, where it’s a very small amount that they pay, it could be four or $5 or $7 a month. It’s almost a no-brainer for them to join. And then you can ship out something like very inexpensive, it could be inexpensive jewelry that you get from Alibaba or Aliexpress. If you’re in the essential oils and diffusers, things like that. It could be a digital product, like a newsletter with just amazing information that your buyers are going to want to have. So you’ve got micro continuity, and then the other really big thing right now is boxes. They can be like mystery boxes, they can be themed boxes, but people love to order boxes, they love opening them and they love recording themselves opening the boxes, which is great for user generated content that you might get.
Tanner Larsson 4:14
And those boxes in every conceivable market from obviously like the famous ones like bark box for toys and, but there’s a niche boxes down into little certain Star Wars theme. There’s now a Mandalorian-themed box. There’s kid boxes for all these different Shopkins and different types of toys like clothing, Stitch Fix for women. Then there’s versions for the guys as well. A lot of brands are now rolling out their own boxes. There’s mixed match box boxes like Honest Company does Jessica Alba’s company where you can get a monthly box of whether it’s cleaning or mixer like baby products or whatever and you can mix and match what you want in your box and they ship it to you. It’s really a cool model if you have the product base. And the reason it works so well like Brad just alluded to is it’s like Christmas every month. They get a box to open a birthday present every single month. And people really like getting stuff in the mail, especially when it’s the stuff that they want. And then some of the mystery boxes have another appeal to them as well. Because not only if you’re going to get something and you love to unwrap it, but there’s that surprise factor of what’s going to be inside, whether its clothes for you to choose from and then send back what you don’t want or mystery stuff like what Brad did with his continuity, you just never know what you’re going to get. People love that. So what kind of products really lend themselves well to, to continuity.
Brad Owens 5:45
If you’re in a POD like apparel, you can do like a shirt of the Month Club. Especially when you’re really branding your business. And they love your shirts, you can do the shirt of the Month Club. And you can do a POD. And if you want to have them pre printed and fulfill them yourselves or to go to a fulfillment center, once you get going, you get an idea of how much you’re going to order, you can get really project that so you can ship it out a lot faster than you could with a typical POD.
Tanner Larsson 6:20
And your costs go way down when you go from a POD to a inventory based system. As an example, we did a print on demand, front end offer on a shirt, and it’s economic niche for a while. And once we scaled that up, we realized we’re sitting about seven to eight bucks of the shirt is what our costs were, when we went to inventory based our shirt cost was 180 to $2 in that range at 225 at the high end. And if we did front and back prints, it wasn’t three hours. We had to buy them in bulk. But we already knew the volume of what we were shipping out on average. So what we would do is we would just have our printer print 100 of each size that sold the most in it. Once they started getting low, they print another 100. So we always have them in batches. Or once that scaled up, we print a 500, then we print 1000. But it’s super profitable. And if you’re going to do a continuity the month it’s possible to do a $20 or less continuity the month with a shirt including shipping and still be massively profitable, once you get it going.
Brad Owens 7:23
Exactly right. And other things would be consumables is kind of a no brainer. If you have like supplements or like keto is super popular right now. So things like this popular with keto like almond flour, or the pork rind breadcrumbs, things like that. They’re going to use them up, you kind of project like how long it’s gonna last. And you can set a standalone price and then also a subscription price, where you’ll get a new bottle every six weeks, or whatever it is. So if you’re doing supplements any consumables, you got to get the continuity going with that. And then just things like any stock that you might have, especially if you already have a retail store, that’s a great way to move you’re dead inventory, you don’t want to have like a crappy box. You still wanted to have good stuff. You can really move some of your inventory that’s been sitting there for a long time. And collectibles are great jewelry, almost anything can be in a box.
Tanner Larsson 8:29
And where Brad was going with the shirt of the Month Club. And they’ve been doing mailer guys for years practically an of the Month Club for anything you can think of there is a sock of the Month Club, the wine of the Month Club, the cheese of the Month Club, the lingerie of the Month Club, the flower of the Month Club, you could put anything in there. And the other thing is, let’s say you sell mountain biking gear, but you have a real rabid following. And you’re in tune with the market and you could produce some shirts that are themed to fit that market. You could build a continuity of like a mountain bikers of the Month Club, even though you’re not a POD company, or an apparel company, you could easily bolt that on, let it be printed on demand. And so shirts that your audience would wear. So you basically offer it as an upsell to people who buy your mountain biking gear. They’re passionate about the market and you give them, especially if you are in that market, you give them shirts that have the right kind of sayings or the right kind of designs, they’re gonna be like, Oh, dude, I want that. And the only way to get it is to be part of the monthly subscription where they send a shirt every single month. So lots of ways you can bolt these different things together. And it’s not just shirts, guys, there’s all kinds of different print on demand. There’s even now there’s basically supplement on demand platforms out there as well. There are companies that do jackets and shoes and apparel and pillows and mugs and all there are all kinds of things you can do it from a non inventory based thing but if you have Inventory are ready, then you can totally do a box very, very effectively. And actually, Brad, you just touched on your collectibles and having a storefront and how you were able to do that. So why don’t we go ahead and jump into your experience? Can you tell us a little bit about how you built your continuity and how it worked for you?
Brad Owens 10:16
Okay, so I started a retail store in 2010 it’s inside the mall of Georgia, and it’s a comic book shop, essentially. With the comics, the retail comic shop model is subscription based, because you have customers that come in, and they subscribe to different comics. They may say, Okay, I want every Batman and Superman and X- men and Avengers. And so you already have that recurring revenue every month from really good repeat buyers. And so for eight years running my comics store, I had continuity built-in. But what I found is, I sit on a lot of inventory, you have a lot of longtail things like comics that may sit in boxes for like years. And so I started doing boxes in my store, and they got super popular. And then when you see other comic shops of your competitors do the same thing, you know that you’re doing something, right. Because they all copy everybody. So it was just a great way to clear out a lot of my inventory in the retail store. In 2018 is when I decided to shut my store down it was, I want to spend more time with my family, I was tired of the mall management. A lot of different things. I closed my store, I was already familiar with making the boxes. So I just added that, to my ecom site. It’s still kind of comic related. Anyway, I added the boxes and then added the subscription element to it. And it just really took off. And it was, the comics that I already had, I had like a ton of Funko toys, I had relationships with Funko direct, so I could still get them wholesale with a comic distributor so I can get really good discounts on other collectibles, and things like that. So it just grew within probably three months of doing my Facebook Ads, I grew to about 325 or so monthly subscribers, and close to 700 boxes a month. And you may think like 325, that’s not much. But the way my boxes were made that they were collectible based, they were kind of like loot crates, but more comic oriented. So they had 10 comics, plus a collectible comic plus a trade paperback plus a collectible. So it took a really long time to kit. But anyway, every month you’re not starting from zero. Which is great.
Tanner Larsson 13:00
In your case, it was awesome, because you were able to leverage old inventory and get rid of stuff that wasn’t moving. And then obviously made some money on it. And then when you needed additional stuff, you went to wholesalers and fill them in. You know, guys now 325 subscribers, that’s not a lot. But it actually is when you have, continuity revenue built in, that’s just free money that you’ve already sold that you have to fulfill on but you already know it’s coming in, it’s bankable, it depends on the price point with a box most boxes, especially things like Brad’s, they’re going to be in that 39, 49 maybe even more dollar price point. So it can add up really, really quick. And when you have something that people like, like Brad Did you get that retention period as well. So they’re not staying for one month, they’re staying for 3, 4, 5, 6, 7 months or sometimes longer. And that really just starts to add up. And as you do more boxes, typically, depending on how you build it, you structure it, your cost per box goes down. Because with volume comes pricing discounts with volume comes the economies of scale and the ability to do better with your margins. So you actually make more money from each box, typically with every new subscriber and if you’re not doing that, as you’re growing, you need to look at where you can apply economies of scale and get better prices, whether that is inventory, buying a little bit more bulk, telling your supplier Hey, you know what, instead of buying it by buy the 10 I want to buy it, buy the 1000 or buy the 100 and see if you get better prices and things like that. So boxes are super powerful,
Brad Owens 13:43
And with my 325 That’s why I decided to start scaling it down and stopping it because it was just me and then I had a part timer and it was getting to the point where we’re gonna have to hire some more people I was gonna have to get pallets of product. I was gonna have to get warehouse space and I was Like crossroads, it’s like, do I even want to do this? And then the opportunity to join BGS came up. So that kind of like made my decision for me. With 325, I could have easily scaled that up. But I just chose not to.
Tanner Larsson 14:46
Because in your case, your warehouse was your basement, right? That was where all your extra inventory was.
Brad Owens 15:22
Keeping it all my basement, and the wife would not be cool with trucks coming with pallets of products unloading in my garage, my neighbors probably wouldn’t be cool with that either.
Tanner Larsson 15:32
There’s a dark side to any kind of ecom side of thing when you’re dealing with inventory. Just because Brad was doing it, he could have potentially looked at a fulfillment house and gone with that, but he would have had to ship all kinds of inventory that he didn’t want to have moved there. But if you have a very systematic box, where you know exactly what it is, you could you can do it with third party fulfillment, you could go to a warehouse space where you do it, or there’s actually companies out there now that specialize in helping you sell boxes, you’re gonna get a little bit less margin on it, because they’re taking their cut, but they’ll actually assemble it and build and ship your box for you. And that’s what they do as a business, they actually just support subscription box companies. Now boxes aren’t the only thing you have to do, you guys could do a completely digital subscription. Brad mentioned, micro continuity, micro continuity is one of my absolute favorites. These are, you know, 3, 4, 5 $6 a month subscriptions, low cost almost too much of a pain to cancel, but easy to provide value for and easy to fulfill, it could be as easy as a few emails a month or an email a month, or a coupon code that goes out every single month for them, it could be an association, your Buyers Club, your VIP club could be like, hey, for 49 a month, you’re going to get two special sales a month or whatever else, or you’re going to get an extra discount to apply to any order you make throughout the month. And the idea here is that volume makes up for it. We’ve done micro continuity programs where we have 30 and 40,000 people paying us three and $4 a month. And the retention on micro continuity is massive. And I mentioned it, where you talk about the pain of disconnect. And it’s too much of a pain to cancel. When people look at their credit card bills every month, which the most consumers do. They look for big changes, they go, Oh, I gotta stop paying for that, that’s 50 bucks, that’s 30 bucks. But when they see a $3 or 4 dollar charge go on there. They might they don’t even look at it. And if they do they’re like, Is it really worth me picking up the phone or digging out the email to go cancel it. So they don’t do that. And if you’re also providing value on it, you can easily get 9, 10,11, 12 month retention times on that or more we’ve had some members that we’re staying, close to two years in a program. So there are lots of different ways you can skin this cat. And it’s just about getting creative and delivering something of value that would fit your audience and then positioning it in the way you want to sell it. Now we’ve got lots of different ways we can talk about this. But Brad, I know you you’ve got a couple of favorites that you want to talk about in terms of like, these guys do it, right.
Brad Owens 18:13
One of my favorites. And this is one that my son turned me on my son a few years ago just really got into fishing, went off to college. He’s going in the country really got into fishing. And he told me about a site called Carl’s Bait and Tackle. And it’s actually a spin off of another site called mystery tackle box. And they do boxes for the fishing niche. They’re like fishing accessory luers, things like that. And they do over 150,000 boxes a month. They’re, yeah, they’re huge. And they were so successful that they created Carl’s Bait and Tackle, which is amazing with their branding that they do Carl, it’s like this really goofy fishing dude. And just the whole site is pretty funny. But they have their mystery boxes on that side. And they also have another layer of continuity. They have a Buyers Club as well. So you can also order their mystery boxes, but also like standalone items. They have like some apparel, they’ve got fishing accessories, they have poles and in reels and just all kinds of stuff. And you can join there. I think it’s Carl’s club, where you get a discount on everything. So they’ve got two layers of continuity going on. Which is amazing. They’re really good. And the other one, you mentioned it at the beginning, but to Stitch Fix. And I think they’re probably the most successful like box company they do over a billion a year in sales. And the great thing about Stitch Fix is its apparel. It’s actually like a whole wardrobe for men or women and there’s no risk to the customer at all. You order you got kind of get through with the wizard and they’ll send you a wardrobe of the month. And you basically decide what you want to keep and what you want to return. And they pay for the return shipping and everything and you only pay for what you want to keep. So they take on all the risks the customer, that’s one thing with any kind of mystery boxes is you want to reduce as much of the risk as you can. Because just getting a mystery box in itself, it’s risky, you don’t know if you’re gonna like it or not. So that’s probably my two favorites.
Tanner Larsson 20:37
Those are both great ones. Guys, I want to touch on one more thing about the Buyers Club, because Brad mentioned it again, and they give you a good site that’s using it. So the Buyers Club, especially if you have lots of products, there’s a reason for people to come back and buy from you again, the Buyers Club, yes, you can make some money on that. Let’s say you do a biker continuity, where it’s five bucks a month to be a part of the VIP Buyers Club. That’s five bucks, that’s not very much. Again, we talked about how volume as you get a lot of people in it, that increases, that’s not the most the biggest benefit of a buyer’s club or a VIP club. The benefit of that is the psychology that goes along with it, they’re paying you five bucks a month to be a VIP member of your club. Now they’ve got this back of their mind thing in their brain where it’s going, Okay, well, I got to leverage this membership, I’ve got to use this. These people who are in your Buyers Club and paying you to get discounts to become your absolute best repeat customers, they purchase way more than anybody else. So don’t look at it as I’m going to get five bucks out of this customer look at it as I’m getting a commitment from this customer to buy from me again and again. And that far outweighs that five bucks. But although you get a couple of 1000 people into your membership at five bucks adds up pretty nicely offsets your ad spend or different things like that. And all of a sudden, you’re smiling and singing a different tune because you’re making a lot of money. But every single time we’ve launched a buyer’s club for a company and help them do it or dialed in what they were doing. If we track the metrics out, people in their Buyers Club basically become the whales of their brand, the ones that spend the most 3, 4, 5, 10 times. Devin one of our amplified partner members. And he also teaches in our ecom challenge, just mentioned the other day that, from their VIP club, they have a guy that just did his 75th purchase, from an ecom store, that’s only a couple of years old 75 times they’ve got this guy to buy, and it’s a women’s jewelry brand. So you know, but that’s what you can do when you have that power of commitment from people joining your VIP Buyers Club. So it doesn’t necessarily have to be a financial front end when and if you make that barrier too high, you get less people in. So the lower that barrier is you got to find that happy medium where you get a lot of people in, but you still make some money on it. But then you turn them into that repeat buyer that you want. The catch here is that you actually have to deliver on that once they’re in the Buyers Club, gotta give them reasons to buy, give them good discounts, give them good deals, give them special deals that the rest of the world doesn’t get to see. Maybe do a limited edition product for them or a variation that only they get. Sky’s the limit of what you can offer them. But that’s one of the ways to leverage the Buyers Club.
Brad Owens 23:26
You got to do that with boxes as well. You don’t want to have a crappy box, because they will unbox on YouTube. And if they don’t like it, they’ll let you know. And everyone will know. So it’s not just what the Buyers Club too is you’ve got to make if you’re doing a box, make sure it’s a good box, get into the mindset of your customer. And think, as a customer would I like this, if I opened it, this is something that I want. What I’ll be happy with it.
Tanner Larsson 23:56
And on boxes guys, something else just to add in there. Most people look at boxes with man, I have to find new stuff to put in the box every single month. So when they start their store or their continuity, they get one sale, or they create a box in the next month. They’re like man, I gotta create a whole new box for only the one person or the two people or the three people that I have in there. It’s different when you have 1000s of members, the next month is not as big of a deal because you already have that money coming in, you have the buying power to create the new box and all that but when you’re starting out, it can be kind of prohibitive and also trying to think of what that next thing is going to be if you’re trying to keep it different every single month. We had that issue with us. We launched a subscription box for the second amendment space a few years ago. Actually, I always say a few but it’s been more than a few now it was back in 2016, 17 when we launched it and we went to you know a few 1000 people very, very quickly our membership but when we launched it, we said okay, we don’t know how long is it going to take to grow. We were trying to downsize our warehouse and move to a third party fulfillment, we really don’t want to get into having to constantly be buying lots and lots of different products. So what we did was we did what we call a drip fed box, which is where month each month is always the same. And when someone joins the membership, let’s say, Brad’s been part of my membership for five months, he’s on month five, he gets the month five box, but someone else who joins today gets the month one box. So all month one boxes are the same all month, two boxes the same all month three, and so on. So every month, you add one more box. But it’s just one more box. And you’ve already got, let’s say you have 12 months, you’ve got 12 boxes full of predefined products. If you’re going to use a third party fulfillment, super easy to do, because they can build those boxes in advance, like okay, here’s the five products that go into box one, here’s the five products go into box two, here are the five products that are in the box three, and you can buy them in volume. And then what you do is you buy them in volume based on your retention, okay, so once you learn your retention, you’re like, Okay, my average retention is six months, well, I’m going to make sure I have the most inventory on month one through six, and then I can scale down months 7, 8, 9, 10 11, 12. And then if you increase your retention, then you scale it up like that. But that way, you only are producing and shipping very fixed thing, it allows you to have a very linear progression to your box, but still have the surprise effect for each person. And it works really, really well. We’ve done it in a lot of different industries, we’ve done it, we do it in the shirt of the month, we’ve done it on anything where we don’t want to be on the hook for creativity if we don’t have members. This allows you to scale it over time, and drip feed members into it without having to go crazy, and you only have to keep producing a box for the longest term member. If your members drop off at six months, and you don’t have somebody who’s going to go to the seventh month like then you don’t have to make a seven month box, you can stop it at six. The other thing we’ve done in another business was we had another membership that was going to be ongoing, who’s going to be on ongoing membership. But we realized that it was actually month six was our main thing, our biggest retention and we had this massive drop to month seven. And we tried everything we could do to bump the retention up to get them to stay that month seven. And it no matter what we did, it just didn’t seem to work. So what we did was we turned it around, and we said, Hey, this is a six month fixed term membership. As soon as we said it was a fixed term, and there was an end in sight like it only is going to last for six months, our conversions skyrocketed, because all of a sudden, people are like, Oh, I’m not going to be paying for this forever. It’s only for six months, and I’m going to get all this cool stuff. It gives them an end in mind like a finish line. And it allowed them to feel more comfortable buying price stayed the same. But our conversion went through the roof. So there are lots of different ways guys can leverage this.
Brad Owens 28:07
It’s all about reducing the risk for the customer. When you do that and increase in your trust.
Tanner Larsson 28:14
And again, the people who are in your continuity, increasing that trust, every time you deliver to them, whether it’s a box or a monthly newsletter, or whatever the deliverable is, you’re getting Top of Mind, again, you’re reaffirming that trust, and you’re making them think, I wonder what else I should get from them. And then a lot of your continuity buyers also become your best buyers in terms of other sales that they make from the company. And then every time you ship them something in the mail or email them something every time you contact them is a perfect opportunity for you to give them a coupon for a different sale or launch a new product or an offer for this. So not only is it delivering the thing, but it’s also a way for you to continue your marketing and push them to buy something else.
Brad Owens 28:57
Make sure that you’re emailing asking for a photo or even video reviews. Those are so huge on your product page.
Tanner Larsson 29:06
User-generated content is very critical for that kind of stuff.
Brad Owens 29:10
And it depends on it. They’re like if it supplements, maybe not so much as far as like the photographs, but with especially with my collectibles, and apparel and things like that, like the Luke style reviews, which really focuses on the customer’s image or photograph. They work really well.
Tanner Larsson 29:32
Absolutely, so we’ve done it all over the place with these different continuity options and stuff. And I’m sure people are kind of wondering, how do I do it? There’s a lot of different ways to do it. And guys, if you really want to get more deep into it, you can go grab ecommerce evolved. This book is on Amazon, go grab a copy of it, we got a whole section on continuity. And that’ll give you a lot more input on how to do that. But for now, Brad, let’s talk about the apps we use and how we actually make At work on a Shopify store because that’s the next thing people have to figure out.
Brad Owens 30:05
The number one app is going to be ReCharge. That is the main one. I’m pretty sure it works out of the box with most Shopify themes. If you have the BGS themes if you’re an EI member, or if you’re with ecommerce business blueprint, you had the BGS theme, then it does require to custom code it but it’s like a very simple process. For me, it took 24 hours, it’s really fast. I think they had it up and go on the next day. My experience with ReCharge their support has been really good. And they’ll get you up and going. It’s very easy to do.
Tanner Larsson 30:45
ReCharge is a great company, there’s a lot of companies that offer apps that do recurring revenue, the problem of recurring billing subscription billing, the problem is, their code is buggy, or it doesn’t integrate correctly with fulfillment, or there are just all kinds of issues. And we’ve tested so many of them. One of the ones that we really, I don’t like to brag on companies or anything like that, but one of the ones we’ve always we stay away from a lot is the Bold recurring app because their code is so bloated and just unfinished. It always causes conflicts in the theme, it just doesn’t work. And again, this isn’t about the company bold is a good company, everything like that. I just we’ve had trouble with that. And so as everybody we’ve ever talked to. ReCharge through, their support is great. like Brad said, if you need to have them custom do it, they do it, they don’t charge you for that it’s just part of the service. It also works with the third party checkouts out there. It has good metrics and tracking. So you can actually see your retention, your churn, all of that kind of stuff, which a lot of apps don’t do very well. And it’s flexible, whether it’s digital products, physical fulfillable boxes, it can work with almost any kind of revenue, if you want to do a digital subscription with some kind of digital membership component or whatever else. There are some apps that plugin with that really nice to allow Shopify to deliver digital products recurring through a membership. So it’s got a lot of robust features, and we use it on all of our amplified partner stores whenever we do any kind of subscription billing. The other thing with that is, if you’re doing a subscription box, this does not work well for drop shipping, because if you can’t drop ship a box unless you have the item. And the other thing is typically a box, if you’re going to do a subscription box, there’s a heavier cost associated with the shipping on that than a drop ship item. And they’re coming from different places. So you may have issues, if you’re selling it in an upsell fashion, where it’s like buy this dropship product and buy the box, you’re going to have a routing issues, but you’re also going to have a sales issue where it’s like, I thought the shipping should be cheap on this product that you’re charging me for this. And then I don’t get them both at the same time. It just creates an avenue for major customer service issues. So if you are drop shipping, AliExpress, drop shipping or do anything like that recommend you do something more like a Buyers Club or a digital subscription or something that doesn’t require you to fulfill a box at a different time like that. It can be done. It’s just a little bit more complicated. And the app is going to definitely add to your customer service complaint levels.
Brad Owens 33:30
Especially right now it takes almost two months to get anything from China.
Tanner Larsson 33:35
Yeah, it’s ridiculous.
Brad Owens 33:37
At the of this recording.
Tanner Larsson 33:38
Yeah, at the time of now. But even then it’s always three to four weeks, you just never know, but now it’s really slow. So the other piece of that is how do you like what are some of the best ways to sell a continuity? How do you like how do you get people to buy it?
Brad Owens 33:56
What I did is we would do a Facebook Lives and just your Facebook page. Create your Facebook ads videos that are great. If you have customers opening your boxes. That’s another thing you do like a giveaway for like a few boxes, have the customer send you a video back. If you can have videos of your customers like doing the unboxing That’s amazing. Just make sure like with any Facebook creative, make sure that your creative connects with your landing page. And that there’s clarity, so they know exactly what you’re doing what you’re selling. So there’s no confusion about that. But with me like Facebook ads and just the Facebook Lives and things like that are what worked really well. Google Shopping was also good when people are looking for things like that, especially with boxes still look for different boxes. Google Shopping and just Facebook we’re the best. Facebook is where you really target and get those people, Google Shopping was secondary for me.
Tanner Larsson 35:07
So you can definitely leverage the front end like Brad’s talking about. But your subscription can also be sold. One of the best places to offer a subscription is as a post, click one, click upsell, after the purchase of whatever product it is they bought, whether it is a supplement, and you’re now you’re offering a subscription, whether it’s a consumable, whether it’s like they bought something for the dog, and now you’re offering them your doggie bag continuity, where you’re going to supply with poop bags every month, which actually does work, by the way. So one of our favorite ways to leverage it is as a post-purchase one-click upsell, whether you are pushing a subscription box, your Buyers Club, whatever they’ve already bought with you at that buyers high, their guard is down, they’re trusting you, it’s a perfect time to present a continuity offer with a trial or the discounted front month or a front loaded front month, where they get some kind of extra perk for jumping in now, and getting them on that continuity. It can also be done very effectively via email. Once the customer is purchased, you have an entire dedicated automatic campaign that goes out that tries to upsell them into your continuity program. And you can tie that in with ads and all kinds of things. But the thing is, the continuity is oftentimes a harder sell on the front end unless its box boxes are kind of bucked the trend there because the people can buy them. But most continuity, even boxes, in some cases are a harder sell on the front end. And if you just position them as a post purchase promotion, whether it’s as an upsell, or as an email campaign or whatever, you’ve already broken that trust barrier, and they’re good, they’ve made a purchase, they’ve already given you money. And now that the next sale is easier, and you can make a much better break. So it’s just because you have continuity, let’s say you can’t break even on the front end with it, you can’t make it work, don’t scrap it, shift its position in your marketing, put it as an upsell, put it as a campaign or something like that, and retest it, and then just change the entry points and that’s what you want to test is how do you get people into it. Usually, you want to make that first month, just the absolute no brainer, whether it’s a trial a discounted rate, you add extra bonuses, something along those lines. And then once they’re in that monthly takes care of itself as long as you’re delivering value. But don’t don’t feel bad if you can’t convert the continuity on the front end, because a lot of people can’t. And that doesn’t make it a failure, it just means you need to re shift things around and move them into place. But it is a great thing that you guys should be adding pretty much not come into contact with an ecom business yet on the planet that can’t leverage some form of continuity, whether it’s at the minimum, a Buyers Club, or something like that. So don’t look at your business go, Oh, my business is different, I can’t do that, you can you just kind of get creative with it, and then figure out what it is. Now, the downside of the continuity is it’s very easy to look at continuity and go, ooh, that’ll make a lot of money. That is the completely wrong mindset as to getting something to sell. You need to figure out what is going to provide value and what do they actually want? What is your customer actually want? If you figure that part out, apply it to a continuity that works, then yes, you’ll make a lot of money. But if you go, man, I could do a newsletter where I send one email a month, that’ll make me a lot of money and won’t be any work at all. Does that newsletter provide any actual value to them? Is there any reason for them to want to be a part of it. So because you could create it, but it’s not gonna make you any money if there’s no value. And if you do create it, and you get sales, and there’s no value, then you’re going to deal with chargebacks refunds, and bad word of mouth. So go into all your continuity programs with a customer centric customer-focused approach. And then work your way backward to a price point that makes sense in a model that makes sense and then start offering it to your customers. So by any other last words or last thoughts you want to share with anybody before we wrap up.
Brad Owens 39:01
Yeah, it’s just if you can find a way to do it. And as Tanner said, there are so many different things that you can do, like pretty much any business, you can fit this in somewhere. But go ahead and do it. I mean, that’s your safety net. And it will start snowballing too. The first month or two might be kind of slow, but then it will start to snowball and compound over time. So it’s just amazing that you can have an amount that you’re that’s almost guaranteed every month, even if no one comes to your site. Yep, just get that peace of mind.
Tanner Larsson 39:38
Very true. Alright guys, there you have it. The little talk on continuity hopefully got some good value out of it. Make sure you are subscribed to this podcast. If you’re on iTunes or Stitcher or whatever make sure you click the subscribe button if you’re watching this over on YouTube go click the subscribe button on YouTube and the notification icon to make sure you get notified when we release a new episode. And if you need links or you want the show notes, go to build grow scale.com forward slash podcast. You can access everything there in the show notes and links to all the different platforms where you can get this podcast including the videos and all that goodness. So guys, thank you very much and we will see you on the next episode.
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