Customer Value Optimization Explained with Defiant’s Jason Chappel

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Jason Chappel, founder of Defiant, discusses the need for customer value optimization (CVO) in the e-commerce industry. He highlights the challenges faced by merchants in understanding various services and providers, and emphasizes the importance of providing value to customers. CVO integrates acquisition, conversion, customer experience, and retention to create meaningful relationships between brands and consumers.

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Jason Chappel 0:00
Most people don’t propose as soon as they’ve met somebody, whereas when we translate that into into an online transaction, what happens when you visit an ecommerce store? Within seconds, there’s a pop up saying, Do you want to discount? Do you want to do this? You want to sign up for our email newsletter? Or do you want to? Whoa, timeout. Let’s get to know each other a little bit.

Tracy Laranjo 0:26
Hey, Jason, how are you doing today? Very good. How are you? I am excellent. I am so excited to chat with you today. I just learned recently about defiant and I have so many questions for you about why defiant came to be

Tracy Laranjo 0:43
what you even do with defiance. And also just so many questions about all the CRO CBO CXO CJ O’s that you see all over the place. And I guess kind of how you look to be in that that space. So yeah, I would love if you could tell our listeners a bit more about yourself and why you started defiant?

Jason Chappel 1:04
Sure. So I mean, let’s maybe touch on the acronyms piece. Yes, they are a nightmare. And I will try not to use any if I can help, but they just slip into conversation. So I am a strategic consultant. And I work with DC ecommerce that I’ve already slipped into it direct to consumer ecommerce brands, helping them on their on their growth. So I started defiant back in January of this year. So it’s something relatively new. I I’ve run agencies before, and I sold my last agency back in 2017, end of 2017. And vowed that I would never do it again. And I figured, actually, you know what, I’m going to be an employee, and I’m gonna go and do that. And that’s what I’m going to do. And I ended up working in insurance, let’s not even go there. And then I found my home really working in like a couple of Shopify Plus agencies. And being an employee was really difficult. It was really hard, you know, letting other people make calls, they set direction, they do all of these things. And I don’t know, I’m probably probably a bit of a Maverick and, you know, have have lots of my own thoughts and ideas about how things should be done. And probably like every entrepreneur out there, I thought, you know, I can I can do this better. So, so I set up define, and really, it came about, because having worked in in these agencies, I could see the trap that that I felt they were in and trying to offer a whole host of services, to merchants, you know, wanting to do everything from like acquisition and social and SEO through to like design and Dev, an email marketing, and then layering in strategy on top of it. And they were just trying to do so much. And I could see, I could see the the difficulty from the merchants standpoint where they’re trying to understand exactly what this agency does. And they’re trying to they’re trying to grow, but they’re trying to mitigate risk. And and there’s a whole you know, especially in Shopify, there’s a whole ecosystem of tech partners and platforms and providers. And it’s a really tangled web. And so I wanted to simplify the solution a little bit and say, you need strategy, in whatever business you’re running, but why why is it always locked into a design and Dev agency or an email marketing agency or any of these things? Let’s pull it out and make it standalone service on its own, that you can add to your, your mix of agencies or partners to layer in and really kind of help drive a return on investment from all of your spend, you know, somebody who’s not got a vested interest in doing a certain amount of development work or selling us, you know, a certain amount of ad spend or any of these things I’m completely disconnected from all of them. and can independently advise merchants on where you can place your efforts to get the greatest return on investment. So that’s really kind of how it all came about.

Jason Chappel 5:13
layer that in with me being difficult to manage, and all of those things, it kind of it birth itself, really,

Tracy Laranjo 5:26
that is such a moment of self awareness, but I can relate to it 100% As you know, someone who has worked in house like you, and agency like you, and now kind of going off and like an entrepreneurial direction, I really echo a lot of what you just said. And I think it’s funny that you started defiant this year, because I’m seeing a lot of people come out and start their own independent consulting practices in all of these different much needed areas of optimization. So obviously, you found a really good spot in and a good need for customer value optimization. But I really kind of want to know in your words how you define CVO, and how it’s really different from maybe conversion rate optimization, we see customer journey optimization was the customer experience optimization, how do you see CVO differ from those other C’s?

Jason Chappel 6:28
For me, it’s really an amalgamation of all of those. All of those C’s, you know, CVO customer value optimization really is pulling lots of those together. So it’s taking a holistic view, across acquisition, conversion, customer experience, retention, all of these things, rather than them being being standalone. It’s it’s pulling them all together, because they all relate to one another. Looking at, you know, conversion rate optimisation very traditionally, agencies or, or consultants will look at solely increasing conversion rate. And that’s great to a certain extent, but at what cost? There’s always a trade off. You know, and and how does the customer experience play out across? Acquisition, conversion and retention, you know, is that seamless is the messaging coherent and consistent? So for me, it’s about tying lots of almost disparate disciplines, pulling them all together. But looking at the business and saying, how much value can you provide to your customer? Yes, there’s that there’s the flip side of that about how much value you can extract from them. But if you start to change your, your mentality as, as a merchant into thinking, how can I provide value for my customers, they’ll find a way to extract it. And in doing that, you probably hit better customers, because you’re targeting them better, because you’re defining who they are and what they’re buying. And just your understanding of that relationship goes so much deeper, you know, rather than, than viewing it as a transactional relationship, this goes into actually creating a meaningful relationship between brand and consumer, where loyalty starts to come into play, where price is less of a motivator. And all of the challenges that merchants face on a on a day to day basis, start to get smaller and smaller, as they get smarter and smarter. Like, very often I compare it with the dating scene. You know, you don’t go on a blind date. And you sit down at the table or meet somebody at the bar and propose to them. I mean, maybe maybe some people do, but

Tracy Laranjo 9:28
it’s never happened to you before.

Jason Chappel 9:31
Hey, I’m hanging out for it. Good luck. I’m not sure what my other half would say about that.

Jason Chappel 9:40
But most people don’t do that. Most people don’t propose as soon as they’ve met somebody. Whereas when we translate that into into an online transaction, what happens when you visit an ecommerce store? Within seconds there’s a pop up saying Do you want to discount Do you want to do this? You want to sign up for our email newsletter or do you want to do Whoa, timeout, let’s get to know each other a little bit. I don’t know if I like you and your product, I don’t I don’t know, if I buy into you as a brand, I don’t know if, if our ethos matches, I don’t know, if my values are the same as your values. So it’s, it’s about creating that longer term relationship. And I think it’s just a big a big shift in mindset. So customer value optimization really is about changing your view on how you want to sell and pulling in all these other disciplines. And optimizing each one of those in our, I’m quite vocal on LinkedIn and, and things like that. And I bash, conversion rate optimisation quite a lot. And apologies to everybody out there who who does conversion rate optimization, it’s not personal. And I don’t have an actual hatred of it. Because it is really important. It’s a key part of customer value optimization. But you’ve got to understand the intricacies of it and the relationship that that one metric has with all of the others that be you know, that are around. So all the haters don’t jump straight on my LinkedIn. And

Tracy Laranjo 11:34
yeah, I don’t think you have to worry about that Jason, work and CRO, and I’m always shitting on CROs. So you’re not alone in that. You brought up so many interesting things there. And something that I think about a lot. This is Rommil Santiago from experiment nation,

Rommil Santiago 11:52
every week we share interviews with and conference sessions by our favorite conversion rate optimizers from around the world. So if you liked this video, smash that like button and consider subscribing, it helps us a bunch. Now back to the episode,

Tracy Laranjo 12:03
as someone who does conversion rate optimization is, you know, let’s say for example, I’m working with a client and I noticed that their checkout rate is horrible, but I go when I google them, and I see oh, they’re Trustpilot reviews are like a one out of five stars. But it’s just a couple. It’s a very low volume of poor reviews. So then I start kind of talking to clients about, oh, well, maybe you should be integrating this into your blog post purchase drip campaigns where you encourage happy customers to leave a review so that your Trustpilot is now a bit more like reflective of the good experience your customers are actually happening. Does customer value optimization? Take into account other channels like lifecycle and CRM and like, reviews, aggregators? What does that look like in terms of the disciplines that you work with?

Jason Chappel 13:03
Absolutely, it does, I think reviews and people sentiment is a huge driver for future behavior. Not just their own behavior, but other consumers behavior. And being able to capture that, and distill that into something actionable, that that brands can actually deal with and start to address issues is great, everybody, everybody loves getting five star reviews, and, and all of these things, but you don’t learn very much from five star reviews. When you start to get three star reviews, and two star reviews, and God help us if you get one star. We need to be able to do something with these. But feeding that back into, you know, customer service portal or any of these things is enormously helpful and valuable. But when it starts to get really powerful, is when we layer in the personalization aspect and the segmentation piece, and how you don’t want to treat all your customers the same. If you have your top tier customer who is spending regularly with you, and they parked with a lot of cash. And then they leave you a three star review. Anybody else leaving you a three star review and it might not be the end of the world. If that person’s leaving a three star review, I want an automated trigger in there that sends a message straight to customer service that says you need to get on the phone to this person because something’s gone horrendously wrong, that they’re not happy with and they are worse. X to us. Somebody else who Who comes on and and doesn’t spend very often and isn’t particularly valuable to the business, if they leave a three star review, I’m not going to give them the same service, because it’s not in my interests, in terms of time and money, and all of these other things to be able to provide that. So we want to capture every aspect of somebody’s experience, you know, their sentiment and, and all of these things, to be able to provide the best possible experience for your ideal customer. And, you know, this, this is where the segmentation piece and the data behind the data excites me and probably bores a lot of other people. But this is, this is where the magic kind of really happens for me, because when we can start to look at somebody’s customer lifetime value, you know, lots of lots of, I see lots of people online talking about a customer lifetime value. For me, there’s, for every single store, you should have multiple figures for customer lifetime value, based on your segmentation of your customer base. Because you need to know how much each each one of them is worth to you how much you can afford to spend to acquire more people like that, how much you can afford to spend on retaining that customer, you know, and in those retention efforts will come things like reviews and customer service. And you know how quickly you want to respond to any of those things. Because it all costs money. So I’m only going to really heavily invest in the people who are worth the most for me. And they’re the people who whose data I’m kind of interrogating most often. But then I’m also running other campaigns and and other datasets to be able to say, okay, how can I convert somebody from my second or third tier? How can I push them up? In terms of their value? How can I? How can I provide value to these people, so that they can start to extract it, so I can get my product in their hands. So they can refer so that they can do all of the good things and the good behaviors that we want them to exhibit? How can we facilitate that? And then how can we just like children, how can we ignore the bad behavior, and, you know, encourage the good. So it really, it’s really all encompassing, you know, goes from the kind of tactile, dealing with customers, all those touch points and everything that’s that’s involved there. But also, then, all of the hard data that every single merchant regardless of size, and scale, and whatever else, every single merchant is sitting on a goldmine, because if you have customers, you have information and you have data, you just have to know how to mine it, and how to look how to look through it, and to know what you’re looking for. So that’s, that’s where it gets exciting. And we can talk about unit economics, and we can talk about, you know, ideal customer profiling, we can talk about RFM, segmentation, you know, all of these things start to become enormously valuable. And then, and then you can put in buying habits and products, you know, some of the products you sell, or ship. And you you have to be able to let go of them. And you might think that it’s great, but the market doesn’t like it or warranty or any of these things, or you haven’t found the niche for for that. So it’s about having an honest conversation.

Tracy Laranjo 19:06
So very intrigued to hear about that, I definitely want to ask you about your approach to CBO and just your whole process in general. So we are definitely going to touch upon that. But you just mentioned something really interesting there about sometimes you know, you have to have these difficult conversations with I’m assuming this would be a client. Sometimes you have to let go of a product that the market just does not want. How often do you come across those difficult conversations with a client that you are someone that you’re working with in which you have to speak on behalf of the customer and the market and you’re just kind of a messenger but you’re giving them the advice they don’t necessarily want to hear but they need to hear?

Jason Chappel 19:52
pretty often. I would say every every class When, how’s it product? Every client, every client has a star product, right? They have that one thing that people come to them for. And it’s the absolute hero product, they sell out of it, or they sell it regularly, it makes them, it might not make them the largest margin of all of their product base, but they they sell enough of it, that it that, you know, it really makes a difference to their business. And that’s the one thing that their customers come to them for. On the flip side of that, they have the product that nobody buys. And they thought it was a good idea to add it as an additional product, because they probably had a really good idea that they wanted to pump up their average order value. And it’s rubbish. Yeah. And but the, you know, the the founder or the owner, or that the Eco manager says, Yeah, but five people bought it last month.

Tracy Laranjo 21:08
Everybody’s doing this, all our competitors are offering this. So we have to get on this.

Jason Chappel 21:13
Yeah, exactly. But then you look at the data, and you say, Okay, fine, you sold however many of those those things. But those customers have never come back. So you’ve got a toxic product, effectively, you’ve got a product that is just killing your lifetime value. Because people have been really happy they’ve been ordering, and then they receive that product. And we’ve all been there as well. You order a product from somebody, and you just think, Oh, this is awful. It could be quality, it could be any, any any number of things. And you just think I’m done. I’m gonna go to a competitor. And it’s that cutthroat that that customers will leave after one. One bad product. And the problem is, they usually don’t tell you, they won’t come back and review it, they just silently quit. So I think I don’t have to have that, that many brutal conversations. But probably every single client, we have to have a conversation that says, Okay, maybe maybe we should scale back on this product, or maybe we should cut it. Or maybe just turn off your ad spend on it. You know, stop pushing it, if somebody wants to, you know, buy it and find it, more power to them. But let’s let’s not push it as a business. And then we can quietly turn it off later.

Tracy Laranjo 22:49
I relate to that a lot. I even one of my there were like my favorite client. I am not working with them right now. But they had moved away from their bread and butter product, which really was the moneymaker and think they wanted to try and introduce products that are subscription eligible, because everybody here subscription is where that for lifetime value, you have to make things subscription. And it just wasn’t there for them. And I felt kind of limited in as see a CRO strategist saying, Oh, well, we optimize one product and not the other. But the other product will use it as an upsell or cross sell. There’s almost kind of those moments where I had to tell the client like, we have to focus on where your revenue is going to be. And also, this product alone is not going to keep customers coming back and back and back. It’s just the revenue is not there. And it’s also just a product that you can get anywhere else. It’s pulling people further away from the the cash cow that like the best, the best seller. So that was kind of relatable to me right there. One thing that I noticed, looking on your website is that some of your methods are very similar to conversion optimization, in the sense that, you know, you do some similar user research tactics. So I think I saw surveying, I think reviews mining, I think I’ve also seen, but I really want to know what your whole approach is your methodology, what goes into it. And I’m specifically intrigued by ideal customer profiles, because we talk about this quite a bit. So yeah, we’d love to hear more about that.

Jason Chappel 24:36
Yeah, I guess they’re, there’s so many synergies, you know, with with what we do and and at some point, I do sit and do just almost pure conversion rate optimization with clients and work with them on those sorts of things, but the process really is a case of understanding the business challenges and the business goals. And taking a step back from just their sight metrics and saying, Okay, you want to achieve whatever the revenue number is you want to achieve. That means let’s work backwards and then start to plug in some of the metrics that are going to help us achieve that. Some of them are going to be direct metrics, like conversion rate, or average order value, or purchase frequency, or any of these sorts of things. And some are going to be indirect metrics. So some are going to be okay, let’s have a look at your, your reviews, let’s have a look at your shipping. Let’s have a look at your unit economics. Let’s take a look at what your customer base looks like. Let’s see how much you’re spending on acquisition. Let’s see whether that is competitive. Let’s start to look at layering some of these these numbers. So I want to work out customer lifetime value numbers. And then I want to run that in a ratio with acquisition cost. And then I don’t just want to know it, I want to leverage that number. So I want to be able to take that and say, okay, the objective is to grow market share, aggressively. Alright, let’s dial that in, so that we are potentially less profitable. Because we’re spending more on acquisition. But in acquiring those customers, where we’re growing our market share, and squeezing our competitors. If we’re smart, you know, we can then kind of go full circle and say, let’s have a look at ideal customer profiling, which is an enormous part of, of the value optimization piece. Because I don’t want to optimize this business and this store for everybody. I want to optimize it for our ideal customer. And that might be exactly the same as your competitors, it might be slightly different, the chances of them being identical are so slim, because everybody plays in a slightly different space, there’s probably overlap. And that’s, that’s where you’re going to fight for acquisition and, and market share. But there’s a there’s a niche that is carved just for you. And you’ve got to find it. And you’ve got find those people and talk to those people and only those people. So all of that information lies in your retention data. So all of the customers who have already bought from you, that information sits in there. And this is this is the proverbial Goldmine that I spoke about earlier. Yeah, it’s full of some crap as well. But you don’t dig for gold and just dig up gold. You got to be able to, to take a pan full of that. And like sift through it, and figure out, Okay, what does our ideal customer look like in this, and we’ll get rid of all that others and stop communicating with them, the way we’ve been communicating with them. And I, I’m quite brutal with my clients, and they often laugh at how brutal I am about it, it’s either they’re going up the value chain, or they’re going out of the value chain. I’m not happy with people stagnating in, unless they’re in that top tier, I’m not happy with them kind of sticking in there needs to be it needs to be constant, constant movement. A client recently turned around to me and said, Oh, we we’ve been desperately trying to cling on to like all of our email subscribers and all that. Why? Why? Like, if they just, they’d wait, if they’re not buying from you, then they’re costing you money. So there’s the approach for me is about saying, Okay, what’s, what’s your hard data? What are your business objectives? What do your unit economics look like? How much money are you really making? Do you do know that I mean, the scary thing is a lot of merchants don’t know what their gross margin is. Well, if you don’t know your gross margin, how do you know how much you can afford to spend on acquiring somebody? Why are you giving them a 10% discount when they just come to the site? Do you know that you’ve just chopped your margin by like 25% and giving them 10% off all of these kind of fundamental business numbers lots of lots of people fall down on. But once you’ve got that foundation in place, then everything else becomes so much easier. And I think that’s, that’s where CVO starts to win out over just focusing on one particular area. Because it it says, Okay, I’ve got an understanding of my business, I’ve got an understanding of my market, and who I want to target in that market. I know how much I can spend to acquire them profitably. I know that if I want to up that spend, because I want to squeeze out my competitors, or I want to increase market share. I know how I can do that, because I can make the numbers work for me. And then equally on the flip side, you know what? Maybe I’m, maybe I’m the market leader, and I can afford to just kind of sit here and get fat on the profits? Or what if I’m not spending enough? What if I think there’s more growth to be done and all of these other things, there’s, there’s so many data points that this now gives me to be able to run a constant health check on a business and say, Okay, if you want to invest more, this is where you’re gonna get the greatest return. Okay, fine. We’ve done that the date has now shifted. So we need to switch our efforts from acquisition to retention. Or, you know, we now need to start getting people into repurchasing. So, are there replenishable that people need? Are there supplementary products that people will will start to need after a certain period of time? Or is there just simple education that we can give to our customers that will help them utilize the products that they’ve bought, which might then turn them into evangelists, and they start referring customers and all of these sorts of things. So it’s a complete holistic view. But it always starts with business numbers, not site numbers.

Tracy Laranjo 32:10
Okay, that was so informative. Thank you, I really appreciate that. And then just thinking about what what the ideal customer profile looks like, in the businesses that you work with? Do you ever encounter situations in which each ideal customer profile has different success metrics, when you’re actually trying to improve their lifetime value or improve their retention? Like, does that happen often where, first of all, that there’s even more than one ideal customer profile, and that to that the success metrics vary between the different profiles?

Jason Chappel 32:49
Absolutely, I think there are, there’s, there’s probably more than one ideal customer profile, you know, for for each business. If you just go fishing in one pond, you’re going to exhaust that quite quickly. Where as if you have a few different customer profiles that you target in different ways, you tailor your approach and spend and time to each of those profiles within your business, then you can start to manipulate them and grow each of those. And they do have different data points and datasets that are relevant to each of them. So for some for some profiles, and customers, it might be revenue might be the one of the keys, it might be average order value, it might be purchase frequency, is this customer coming back and buying regularly, their average order value might be quite low, but they’re coming back regularly. They’re engaged, that their value is going to be high, because their frequency and their recency is is up there. Whereas others it might be actually they’re not spending that much. But they’re referring that’s a free lead. Like when you look at how much you’re spending to acquire somebody, quite often it can be negative on the first purchase. Whereas if a certain customer profile is referring you to their friends and family and and these sorts of things, then they have a value. You just might not see it on the balance sheet attributed to them. It might be attributed to others, but you’ve got to be able to find that that link. And then then you have like the superstars within every every business that they order regularly. They spend a lot of money. They’re brand evangelists. But they’re unicorns, you don’t find them every day. You might grow them and develop them over time, you might stumble across some and get lucky and acquire a few and whatever else. But most of the time, we don’t focus on acquiring those people. Because you know, really are looking for a needle in a haystack unless you’ve massively dug into your dataset, and you have a complete grasp on, okay, this is this particular ideal customer profile, I’m going to spend a ton of money acquiring them. And you know what I might not, I might not break even on them until like purchase three or purchase four. But the data says typically, they’re going to purchase 12 times, and they’re going to stick with me for 15 years, and their average order value is going to be high. So I can afford to do that. But unless you know, some of those numbers right at the beginning, you know, you’re you’re not going to know. But yeah, absolutely, I’d go for multiple customer profiles with relevant data points against each one. And that is completely bespoke to every single business. You know, even if they’re in the same category and selling the same product, and, and all of these things, you’re still going to have different data points against those customers, because the customer base is different.

Tracy Laranjo 36:27
What do you find are the best data sources to learn those traits of the ideal customer profile?

Jason Chappel 36:37
I mean, Shopify gives you great data, straight off the bat. It doesn’t always marry with Google Analytics, which is slightly difficult thing, guys. But you know, you kind of got to find find your way in. I use a tool called Omniconvert. And you know, of Omniconvert

Tracy Laranjo 36:58
Oh, yes, they are. I think our latest episode of the podcast was an omni couverte interview. So yes, we are very well aware.

Jason Chappel 37:06
Yeah. So in terms of the data, that that provides, and pulls, and it’s incredible, absolutely incredible, the the depth that you can start to drill down to in there, and it’s all automated, which is amazing, you know, it’s pulling it straight from your Shopify store, or you can plug it into, you know, other platforms. And it will go and pull all the historical data, and then it just starts to surface it in a dashboard, that is easy to digest, straight off. And then if you want to go deep, you can go deep, you know, you can really start to dig into whatever metric and angle and, and layer you want. And you can then start to marry that with other metrics, so that you get this kind of three dimensional view of your entire customer base, and then you can start to dig into each individual segment, smaller and smaller, you know, down to a super granular level. And for me, that’s, that’s where I get most of my data. And I probably spend far too much of my day. You know, looking at those sorts of things, I mean, I’ve got two screens sitting beside me, and one has a Shopify dashboard up on it. And the other one actually has Omniconvert, open for the same store. And I’m, I’m running through that that data, because I was in the middle of doing some reporting this afternoon.

Tracy Laranjo 38:39
So love it, it never stops. So this all sounds really awesome. But it’s hard to kind of put the pieces together in a practical sense. I know that you you had a success story with a pain cream. So can you kind of explain to our listeners, like were five years old, just how you took that approach that you just described to us and then turn it into a win for the skin cream company?

Jason Chappel 39:09
Sure. So these guys are big in in retail and they want to be able to increase their margin, ultimately. So they know that selling DTC is a surefire way for them to be able to cut out the retailers and increase that margin. But there are other challenges, obviously, that that that come on board with that. Something that, you know, the retailer, when you’re in there will handle customer acquisition, you know, they’re paying rent on on a store, and they make sure that there’s footfall and that they’re driving, you know, marketing and sales activities to get people into that store. And then serendipitously, you We end up with somebody purchasing your product. And they say, Hey, actually, I need that. I didn’t come in for it. But that’s what I need, or I’ve come in to buy this particular product, and yours is right next to it. So I’m going to pick that up. All of those things are taken care of, for you, by the retailer, when you decide to go, DTC, you have all of these headaches that now become yours. And not only that, you’re competing with yourself. So you’ve got to really take a look at, okay. Out of my new increased margin that I’m going to get from selling this direct to a consumer. What’s the difference between that and what I get from the retailer, okay, in there’s really the money that I’ve got to play with, for my day to see offering. And it’s about saying, Okay, where do I put it? This was this was effectively the question, what what do we do with that? That money that difference? Why do we spend it on acquisition that we spend it on retention? How does subscription fit into this model? How? How are we going to make sure that we’re targeting the right people? All of these all of these big questions. And so they did a lot of TV advertising. And there were, there’s a lot of traffic generated in off the back of the TV advertising, which is really non traditional. In I can’t remember the last time I watched an advert on TV. But people watched, and they would go on, and they’d hit the site. And then the the problems start off. Okay, how do we get them to convert? Do we take them to the website in general? Do we take them to a specific landing page? So we started running a B tests on the best, the best converting? Journey effectively? So you know, if we’re sending people to the landing page, how do they convert? If we’re sending people just to the generic site? How do they convert? What messaging are they receiving on those on those sites? Then once they have converted? What are we doing to retain them? What what do those people look like moving forward? I mean, really, interestingly, their their site was they running, we ended up running at about just below 5% conversion rate, on average for their site. When we use the landing page, we were up at nearly 20% conversion rate, which was no no real surprise. But it’s when you start to look at the longer term, the longer term play. So in seeing their conversion rate go up, we saw that average order value come down, which was slightly alarming for them. But we also seen purchase frequency go up. So people are ordering more often. But they’re spending slightly less. Actually, that’s okay, because we’re watching that customer lifetime value number as well. So we’re managing this all the way through, we’re looking at messaging, we’re looking at how easy it is for somebody to purchase and check out, you know, what are the friction points that are in there? How can we remove as many of them as possible. A big part of revenue that was driven, was subscription. And making sure that we got subscription options available to people early enough in their journey. So they understood, I have mixed feelings about subscriptions, and we can probably touch on that in a minute. But it we saw in five, six months, we saw subscriber rates go from about 100 100 subscribers to over 500 subscribers. And the churn was reasonably low. You inevitably have the people signing up because they get the discount, you know, 5% 10% Discount whatever is being offered, which is where my bugbear comes in. But lots of those people were sticking around for four plus months in that in that subscription model. So their recurring revenue and predictable revenue started to get a lot easier for us to manage. So they can then start to place that into that acquisition with more confidence and just about Being able to understand that was it was a game changer for them. Not only that you’re adding, they were constantly adding to people who have purchased. So there, their email marketing efforts and retention efforts were growing exponentially. So we were just able to retarget those people, those people who hadn’t subscribed, we were able to see consumption rates. And we could then start targeting them with well timed emails to say, hey, it might be time to, you know, order again, and then bringing them back on site with with personalization. So knowing that they have ordered a specific product in the past, we can show them that same product, we can then also show them upsells on that. So hey, you saw how, how great that one was, why not try this next one that’s a bit stronger. Why not try this other product that might help with some of the other things that you’ve got going on. And all of that really just started to build a whole host of data. And then you layer in things like quizzes, we would just ask, we’d ask customers to almost tell us what what they were using the product for and how they were using it, how much and how often and all of a sudden, we had cut through on who was using the product and how they were using it and why they were using it. So the education piece then started to run from an email marketing standpoint. So okay, cool, you’ve got you’ve got tennis elbow, you’ve got sore knees, like you’ve got a sore back, whatever it is, here’s another product that’s going to help with that. Or did you know that applying the cream and this time, you know, at this time or in in this certain way, might help ease some of your, your pain. All of those things, just keep that customer way more engaged, and they just started coming back, you know, the return rates start going up. And And with that, in six months, the revenue went up over 60%.

Tracy Laranjo 47:17
That’s awesome. And you really had to use a few different channels there to get to this, it sounds like you were you were leveraging, you know, lifecycle data, it sounds like you also take into account acquisition costs. So you are really diving into paid media as well, it sounds like this is also a mixture of vanilla on site conversion optimization. So it does sound like this is kind of a merging of all of these different channels and one and I don’t know how you would be able to get to these sort of wins with just one channel. I don’t know if that’s even possible. That’s awesome. I’m, I’m really interested in what you’re putting together. So definitely gonna keep an eye on defiant in the next few months and see what else you guys come up with. But yeah, this has been a great episode. Thank you so much, Jason, I’ve, I’ve learned personally so much about customer value optimization. I’m sure our listeners will too. It’s not really talked about all that much, at least in my circles. I think everyone is still kind of hung up on CRO. But it’s really awesome to get this perspective.

Jason Chappel 48:23
It’s been, it’s been really good. It’s been really fun.

Tracy Laranjo 48:26
Is there anything that you’d like our listeners to know that you have something going on? Yeah.

Jason Chappel 48:33
Hey, that’s a big question. Right? I, I’m working hard behind the scenes right now doing lots of doing lots of collaborations. So working with lots of lots of partners, lots of agencies on some thought leadership pieces on some workshop pieces. And then somebody even mentioned, like doing a podcast or something along those lines. I’ve heard they’re pretty good. So I think it’s definitely it’s something in the works. And watch this space. There’s, there’s, there’s lots of content coming out. So I want to try and grow people’s knowledge around around CVO and help help everybody see the light that conversion rate optimization is is great. And it might fix things in the short term, but it’s 2023 we need to go long term. And, you know, I think if you want to build a community CBOs a way around it, and the communities where the money’s at, so you want to build a community. But yeah, I think I’m doing everything I can to, to educate as many people as I can and at Talk about CVO and get all the partners and all the merchants and everybody excited about their customer base and their Goldmine that they’re sitting on top of.

Tracy Laranjo 50:10
Oh, love it. That’s great. Where is the best spot to get all of this information from you all of this good content?

Jason Chappel 50:20
You’ll find me on LinkedIn, probably way more than I should be. So hit me up on LinkedIn. That’s, that’s where you’ll find me bashing people from CRO swearing regularly and cursing at my children for giving me far too many gray hairs

Tracy Laranjo 50:41
as one does. Thank you so much, Jason, is there anyone that you would recommend that we interview next?

Jason Chappel 50:49
Oh, good question. That’s a really good question. There is a fantastic group of guys doing some work called Reylo. And they are helping people manage their subscriptions and really kind of get get great value out of that. So you probably want to hit Harry from relah up or Harvey. And, you know, they’re, they are killing it right now, in terms of helping people reduce churn and making sure that everybody’s getting a well timed replenishment message. And those guys are just very, very cool. Awesome.

Tracy Laranjo 51:41
I want to ask them all about subscriptions, and particularly, how to make them not suck. Because I encounter a lot of crappy subscription programs, or products that have no business being subscription, that would be something I definitely want to ask them. So thank you for

Jason Chappel 51:58
saving the subscription model. And come hell or high water for everybody who has one. So if you’re not using Reylo on top of your subscription, then you are definitely missing a trick.

Tracy Laranjo 52:11
Awesome. Well, it’s a dirty job. Someone’s got to do it. So glad it’s them. Well, thank you so much, Jason, this is a great chat and yeah, all the best with define and excited to see what comes.

Jason Chappel 52:22
Thank you very much. All right.

Tracy Laranjo 52:25
So that was our epic

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