Welcome to Growth Interviews!
Welcome to Growth Interviews, the fun, stimulating and engaging series of conversations driven by digital business growth.
Our mission is to provide insights and ideas from world-class professionals on the topic of growth and to cut through the noise of so-called marketing tips and tricks, revealing the money-making strategies behind e-commerce.
Each episode is an intriguing challenge involving an insightful expert who reveals some of their best-kept secrets, which you can use right away to boost your business.
In this week’s episode of Growth Interviews, we invite you to join our conversation with Jason Greenwood, a digital native with deep omnichannel commerce expertise (B2C | B2B | DTC), who simply loves what he does. He is a passionate mentor, commentator, worldwide keynote speaker and content producer that loves giving back to an industry that has given him so much over the years.
Jason’s focus in business is to bring together the core tenets of online success – traffic, conversion & customer lifetime value – with a wider solution that encompasses teams, business goals, systems, processes and integration/automation.
For the last 17+ years, he has helped organizations across Australia – New Zealand build exciting, compelling, differentiated, integrated and technically sound digital shopping & engagement experiences imaginable.
He is a strong advocate for phygital experiences – digitally-led experiences within physical retail which includes the use of biometrics, AR/VR, IoT, mobile NFC, progressive web apps and more to create fully merged, integrated and immersive in-store experiences that drive consumer brand affinity and stickiness.
“I love digital. I love the passion, the impact, and the opportunity to do hugely fun and fulfilling work that has truly quantifiable outcomes. Digital is changing the entire world and is the foundation for the societal knowledge revolution that is now well underway.”
Jason is a thinker and a doer and truly passionate about the digital world and in this interview he dives really deep into what technology can bring to eCommerce and omnichannel. We bet you’re going to love our talk with him!
The Early Days of eCommerce that Shaped the Future
Valentin Radu: Hello everyone and welcome to a new episode of Growth Interviews. We have here Jason Greenwood from New Zealand in Auckland. Jason, tell us for the beginning who you are and what you do and how you got into the digital landscape.
Jason Greenwood: Sure. So, I’ve been here working in the digital space for over 17 years and I’m currently e-commerce manager of Health Post here in New Zealand based in Auckland. And Health Post is Zealand’s largest online retailer of natural health products. So, we sell vitamins and minerals and supplements and educate and do a lot of other things in the natural health space. I also have my own digital consultancy and I consult with medium and large-sized enterprises in the Australia New Zealand region.
As I said, I’ve been in digital for about 17 years. And this was still the very early days of e-commerce. The company that I was working had their own in-house built sort of e-commerce platform, and then we were also building websites on OS commerce which was an early open source e-commerce platform at the time. And from there, I started my own e-commerce pure-play, ran that were over seven years with a business partner.
We sold flash memory online. We were a pure-play online business only. We imported products, warehouse them, ship them directly to our customers. New Zealand Wide was the first in New Zealand really to specialize in that space and e-commerce in New Zealand. Then after that, I worked agency side for five years. A digital agency here in Auckland servicing clients throughout Australia New Zealand. And now, I consult in and also work with Health Post. So, it’s been an exciting journey and it’s super cool to be in the space.
The experience from the early days of eCommerce, working with new, emerging digital channels and understanding their impact and evolution are proving to be the best teachers in the digital world.
Digital is the driver of change in the entire world and the foundation for the societal knowledge revolution that is now well underway.
A Deeper Understanding of the Importance of Customer Lifetime Value
Valentin Radu: Jason, we have been chatting a bit about customer retention and the fact that people are not focusing on lifetime value. What’s your take on that? Why do you think this happens?
Jason Greenwood: Because the top of the funnel is always easier to manage I guess than lower down the funnel. The further down the funnel you go, the closer relationship you have to have with the customer. And there’s more accountability associated with retaining customers than simply getting new ones in the door, whether it be through paid search, through social, paid social, organic social, market places, whatever. Acquisition is what everybody is about because it’s relatively easy to do. You turn on a switch, you spend some money and you go and acquire new customers.
However, I think that that’s only getting much more expensive. For example, if you just look at the AdWords channel alone, AdWords inflation is running at about 12 % per year. And that’s completely unsustainable for most businesses. So, the reality is that even though there are other cheaper channels in many respects to acquire customers, we’re going to reach parity across all channels in terms of acquisition costs where it has value. That’s where marketers flock to. That pushes up the price of those acquisition channels and therefore will eventually get to a place where acquisition costs will be about the same regardless of what digital channel you acquired them through.
So, the reality is that businesses are now starting to realize that it’s been a slow journey. Many businesses are also starting to recognize that and as a result, they’re focusing on retention and reducing churn. They are starting to better understand the concept of customer lifetime value.
And so, people that have been focusing on lifetime value since forever, are helping them to better understand what lifetime value is, what the lifetime value of the customer is, what the lifetime duration, the average lifetime duration of the customer in their business is. Therefore, we can start to assign proper acquisition value to a customer. Because if you look at the acquisition cost against a single-time sale, you have to reacquire a customer for every single sale. That all of a sudden doesn’t look as attractive. When we start looking at that compared to the initial acquisition cost, all of a sudden, the economics often start to make sense. But as an isolated single acquisition, single transaction the math just doesn’t make sense for a lot of businesses.
Acquisition is proving to become unsustainable for most businesses with an annual inflation rate of 12% for Google Ads. As a consequence, an increasing number of eCommerce companies are focusing on retention and reducing churn.
They are starting to better understand the concept of what customer lifetime value is and start to assign proper acquisition value to a customer.
How to Advocate for Loyalty Retention
Valentin Radu: We’ve been doing some research in the last three years since we started to build a product which is addressing the issue of customer retention and the findings were staggering. A customer that’s in the best RFM (Recency Frequency Monetary Value) group is as valuable as 397 new customers. So, that does the math. However, these companies are not doing anything to understand them. The benefits would be to also improve their advertising.
If you look at the most important customers, you’ll be able to target your ads much better. And even though people are seeing this data, they are not actually jumping on the bandwagon. And I think this has to do a lot with their education level, with the fact that they are much more relying on spending. I mean they are not marketing managers, they are spending managers and they are acquiring traffic, they are not generating traffic. And that has to do a lot with education and education is the key component here. How do you see education evolving in the future? How do you think we can fix that in this ecosystem?
Jason Greenwood: I think there has to be an internal advocate for loyalty retention. If we look at, for example, the Health Post team, we’ve got somebody that their sole role is retention and customer loyalty. So, that person is an absolute–They effectively have a seat at the table on behalf of the customer. So, they’re always seeing our business through the customer lens. And if a business has someone dedicated to that skill and that specialization, then it’s really got to be top-down and at the end of the day is if the owners of the business and the managers of the business and the board can’t pretty easily understand this smart data that retaining a customer is always cheaper than going and getting a new one.
Trying to convince somebody is always a challenge. I think that Google Analytics, Facebook ads, remarketing, retargeting platforms, marketplaces, etc, they intentionally do a poor job. I don’t want to see it as a conspiracy but certainly, it’s not in their best interest to show you the value of a retained customer. It’s in their best interest to show you how cheaply they can help you acquire new customers. That’s their goal. They want you to continue to acquire customers through their platforms. The reality is that you have to find ways to quantify that internally. However you do it, you have to do it because otherwise, if you don’t do it, then your competitors will do it and do it well, and will outcompete you. They will underspend you. They will be creating a much better customer experience anyway. And ultimately, they’re going to put you out of business by being smarter.
How to advocate internally for loyalty retention:
? Get an expert whose role is retention and customer loyalty
?See and explain the business through the consumer lens
? Make an argument with simple and smart data that retaining a customer is always cheaper
The Goldmine of Keeping Up With the Latest Tech Developments
Valentin Radu: Jason, you have a lot of experience in this field. Tell us a story related to growth or a discovery that you made, a case study, anything.
Jason Greenwood: Even though I’m not a developer, I’m probably one of the most technical e-com manager/digital consultants in the market or at least in this part of the market purely because I have a very strong interest in the technical side. So, I think for a lot of businesses, controlling digital tech stack costs is something that they don’t know how to do. They don’t know how to roadmap. They don’t know how to plan. They don’t know how to move with new technologies. And so, therefore because they oftentimes miss out on one or two or three generations of digital technology, when they make a move, they’re moving some say for example generation one technology to a generation four technology. Whereas if they went gen one, gen two, gen three, gen four, it would be substantially less expensive, substantially less disruptive for their business. And in terms of change management, not just financial change management, but internal philosophical and mindshare change management within the business, it would be substantially easier.
We see people sitting on the fence with old technology for years and years. A lot of businesses are clinging to the outdated ideas that they have to stay with what they know and it’s in the same way as you pointed out, a lot of businesses are clinging to the idea of acquiring customers instead of retaining them.
I see businesses clinging to old technology when they should have changed it probably three to five years ago. And when I do cost modeling nowadays in terms of saving money for businesses, oftentimes by moving one leap of technology forward, they can save anywhere from 15% to 30% on the total spec tax that costs while increasing their functionality tenfold. So, the reality is that businesses need to stay up with the latest developments not only from acquisition, retention and personalization strategy but with the whole lot. And so that’s where they can’t afford internal resources to do all of those things on a full-time basis, that’s why they reach out to specialists in the field. They can come in and surgically help them update their business and update their mindset. To be honest with you, probably over 70% of my work is less about the technology and the skillset and more about helping companies upgrade the way in which they do digital or the way that they think about digital in the business. So, it’s about bringing boards and senior leadership teams along for the journey and upgrading their mindset.
The lack of profound digital knowledge in most of the businesses, of planning and creating actionable roadmaps with the help of the new technologies is deeply affecting their performance.
Taking only one step forward in improving and adopting new technologies can save between 15% to 30% of the costs and tremendously increase functionality. However, the adoption of new technologies is being delayed by the senior board members who do not understand the multitude of benefits new technologies bring to the business.
Machine Learning Sets a New Norm for Great Customer Experience
Valentin Radu: Where do you think the machine learning fits in and where do you see the place of the marketer here in this whole game? Which are the jobs that you think are going to be sticky and which are the jobs that are going to vanish?
Jason Greenwood: I don’t have a crystal ball but I can only base what I think from what I’ve seen happen in the more recent years where machine learning and AI have become more common. So I think that AI and machine learning are mostly going to come through your existing tech partner.
For example, if you’ve got an existing ERP partner or a CRM partner or mocking automation partner or, as in your case, a CRO technology partner, the reality is that those technology partners, they are a tech-focused product company. And most of the time, the leveraging of artificial intelligence and machine work is going to come through that. They’re the ones that are going to incorporate machine learning and AI in their technology products and their stack. And you’re going to get the benefits of that whether you like it or not. It’s just going to roll out and it’s going to be available to you as a consumer of that technology. Just like we don’t think about the fact for example as consumers, as end consumers. If we look at Instagram, Facebook, LinkedIn, all the social media platforms, they are all using machine learning and AI to improve the experience for us as users. We don’t think about it that way. We just think business experience good or is shit. And if it’s shit, we stop using it. If it is good, we continue using it.
That is exactly how the tech vendors of the future will be. Their marketing automation for example either creates great experiences for you and your customers or it doesn’t. You will either continue to use the technology or you wouldn’t. Amazon is going to bring on-demand machine learning and AI as a consumable API service. They’re going to service that, and they already do. And you can pipe into that. You can tap into that. But the reality is leveraging that technology is actually really hard. So, for me, personally, I’m looking into the tech vendors and the commerce stack to bring that into their technology so that I don’t have to be a genius on machine learning and AI.
Machine learning and Artificial Intelligence (AI) are set to be adopted and implemented mostly by technology and martech companies that are developing new products for their B2B clients through innovation or incrementally. The consequence is that all companies will be shortly exposed to working with and also reaping the benefits of the new tech tools based on machine learning.
Furthermore, the end result is that marketing automation will create great customer experience for companies adopting machine learning-based tech as well as for their end consumers.
The Value of Data as a Strategic Asset in Customer Retention
Valentin Radu: Jason, you’ve spoken about the retention and the fact that you are focusing on that, and you are in a team that has real specialists that are working for lifetime value optimization. Which are the techniques, the strategies that you would recommend to companies which are just starting their customer retention optimization?
Jason Greenwood: I think one of the things that businesses overlook is the value of data as a strategic asset. When you look at retention, we need to understand not only the buying behavior of people that tend to be loyal to us as a business. We need to understand of course their buying journey and buying behavior, the channels they come from and what their average spend is. We need to be able to segment that portion of our customer base.
In order to do that in a smart way, we also have to understand their communication processes. We have to understand what are the triggers that will cause them to buy more frequently because we only know they’re going to be loyal customers. How do we amp up the frequency a little bit without pissing them off and causing them to churn as a customer? It’s a very fine line. But I think the other piece to this is the data around products. When I consult around the data modeling, around products and customers, they oftentimes tell me what their data model is for customers, what the data model is for products. They can’t tell me what the structural data of the products is and oftentimes they don’t even have that. So, until a business can link together the interests of its customers and their buying behavior with specific attributes of their products, they will never ever be able to personalize that experience to the point where the customer goes, ‘Wow! These guys know me, they respect me and they love me and they’re marketing to me in a way that’s relevant to me and my interests.’ If you don’t have product data and customer data and preference data and behavioral data to link together, you will never be able to market on a one to one basis, and your most loyal customers expect you to market to them on a one to one basis. They don’t want to be marketed too generically. They’re thinking ‘I’m a little customer. I buy from you once a week, once a month, once every quarter’, and they’re thinking ‘You know me better than I know myself or at least you should. So why are you sending me spam e-mails, why are you remarketing to me in a generic way, why are you promoting irrelevant products to me?’
You want to surprise and delight. Yes, occasionally throwing the surprises align elements. But your customers are already telling you what their interests are. They’re already giving you a ton of information for you to personalize against. They’re telling you what categories they visited. They’re telling you what they’ve added to their cart. They’re telling you what they’ve added to their wish lists. They’re telling you what they’ve added to the product comparison. They’re telling you the products that they’ve searched for through product search on your website. They’re giving you a big load of data even then they never buy from you given months. So, why wouldn’t you use that data then to further personalize their journey and their experience with you on an ongoing basis? And I just don’t see businesses doing this very often these days, and the tech is there. It’s relatively easy to do but they first have to get their data right, they have to cleanse their data and they have to gather their data or at least create the data around their products. And it’s an investment a lot of businesses just aren’t prepared to make or they don’t even know how to make it.
Data is again proving to be the greatest strategic asset. For a business to obtain the wow effect from its customers and become a champion of customer retention, it needs to implement a clear strategy with actionable tactics based on already existing data:
? Understand the buying behavior of people, the course their buying journey and buying behavior, the channels they come from and what their average spend is
? Be able to segment realistic and specific your customer base
? Understand the customers’ communication processes, especially what the triggers that will cause them to buy more frequently
? Surprise and delight
? Pay attention to your customers as they are already telling you what their interests are
? Link together the interests of your customers and their buying behavior with specific attributes of their products
? Personalize the experience to the point where the customer goes, ‘Wow!’
Fusing Physical with Digital Experiences
Valentin Radu: If you look around, what’s frustrating for you at this moment in the digital eCommerce world?
Jason Greenwood: My biggest frustration is omnichannel commerce businesses, that either started out with a very strong brick and mortar presence, or they still have or developed a very strong brick and mortar presence. As we know from the global statistics, brick and mortar still account for circa 85-90% of all retail sales. So, eCommerce constitutes about 10% of global commerce.
What I struggle with, what I’m talking to these companies that have a large brick and mortar presence, is they don’t see the benefit in making large investments in digital because they say it’s only 10% of the business or maybe even less and they’re going ‘Why would we make these big investments in digital when it doesn’t constitute much of our business today. We might as well put it into stores, store expansion, range expansion and other initiatives.’ So that’s the first frustration.
Two, it’s ‘Why would we make this massive investment in online when all we’re going to be doing is competing with the Amazons of the world.’ I think that those are two very ignorant comments mainly because they are not looking at the fusing of digital or physical plus digital experiences.
When do we start thinking of digital in-store and when we start thinking of simple initiatives which are absolute no brainers like click and collect or kiosks in-store, of apps in stores that can actually scan products and get information about them and complete purchases and do all sorts of other things and increase loyalty, I think there’s an absolute ignorance within businesses. There’s still this absolute silo-ing of channels instead of looking at all channels and say ‘The digital is going to inform the in-store purchase, the in-store experience is going to inform the online purchase.’
And people, when they’re in-store, can find out information about products, add it to the shopping cart through an app or even through a website, mobile site on the phone, and then go home and execute the transaction from home or have them shipped to the home address from in-store. There are just so many permutations of online combined with offline. I think that especially as VR and AI have become the norm, and particularly augmented reality. I think augmented reality is going to become much more normalized for the next two to five years in the VR world and VR is going to take another decade at least to reach the mainstream consumer. But AI alone can create really rich interactive in-store experiences and that’s a digitally-driven experience.
It’s just that it’s another channel. It’s the in-store digital channel. And so when businesses start to think outside the box a little bit, that frustration of mine will go away. But the reality is that the leadership on boards is aging. They don’t have enough youth on the board. And so, we don’t have a lot of digital natives on boards making these financial decisions. If you have a board member that can hardly run a smartphone, it’s unlikely that they’re going to be in support of strong digital initiatives.
Strategies for developing a great omnichannel commerce business:
? Great benefits from digital opportunities should be created with clear business intentions and investments
? Create your own digital print and don’t follow the competition
? Fuse digital with physical and physical with digital experiences
? Create really rich interactive in-store experiences with VR and AI
? Get digitally driven for the shopping experience
Empathy: The Way to the Customer’s Heart
Valentin Radu: Tell us three growth ideas for eCommerce players.
Jason Greenwood: I think as you rightly pointed out, moving away from an almost myopic focus on acquisition to retention and customer experience. Focusing on the actual customer experience that you’d like to have as a customer of your own business. Have some empathy. Think of a customer coming through your doors and think of the treatment you would like to have if you were a customer of your own business and think of all the ways in which you can disrupt yourself as if you were a competitor as well. I think that’s the first thing, focusing on the customer experience and retaining through customer experience. That’s the first thing.
Don’t become overly dependent on any channel whether that be the Facebook acquisition channel or the Google acquisition channel. You know when we got things like voice VR and AI are right around the corner, the reality is, if you’re overdependent on any channel, you are seriously in the shit. Because what was cheap went away. For example, if we look at Facebook organic, that went away and now it’s pay to play on Facebook.
That’s happening now with Instagram. What was originally largely organic is now pay to play. We’re starting to see that with LinkedIn. We’re starting to see the algorithm shift. What was 99% free organic traffic from LinkedIn, now you’ve started to have to do some advertising really to boost your visibility in the sea.
The only constant in digital is change and the reality is that every acquisition channel that is cheap today will be expensive tomorrow. Don’t ever get over-dependent and wedded to any one channel. Be completely channel-agnostic. Go after and develop skill sets around emerging channels and devote maybe 10% to 20% of your budget to emerging channels and still focus 80% of your budget on the channels that are working really well for you and double down on those channels but keep your eye open for emerging channels.
The third thing I think that a lot of brands are missing out is purely the ability to create content and distribute content. This builds a little bit along with the channel thing.
So, I think about the importance of business leaders being highly visible in social media. You have to find a way, whether it be through the written word, video, photos, something to get your brand out there and get it visible because if you don’t, one of your competitors will. You got to do it.
Growth ideas of tomorrow:
? Move away from the myopic focus on acquisition towards retention
? Become your own customer and make the experience delightful for yourself first
? Step into your customers’ shoes with empathy
? Constantly improve on your skillset Chase for the very new acquisition channels while they are cheap
The digital environment is providing every day with new channels of communication helping businesses communicate themselves and their products in different, more innovative ways. This new landscape is presenting all companies with an incredibly wide range of new tactics, new ways to delight the consumers.
It’s the dawn of a new age, a time to become more open and embrace the changes with courage, curiosity and a fresh point of view.
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