Guillaume: Hello everyone, Guillaume Le Tual here, and I’m the host of the Ecommerce Wizards Podcast where I feature top leaders in business and e-commerce. Today our guest is Tivan Amour, CEO of Tonemessaging, and we’ll be talking about how to build the highest value SMS marketing strategy for your e-commerce and Magento. We’ll be talking about the entrepreneurship journey of Tivan as the CEO and other various musings we might get to.
So before we get started, our sponsorship message; this episode is brought to you by Mage Montreal. If a business wants a powerful e-commerce online store that will increase their sales or to move out piled up dormant inventory to free up cash reserves, or to automate business processes to gain efficiency and reduce human processing errors. Our company, Mage Montreal, can do that. We’ve been helping e-commerce stores for over a decade. Here’s the catch, we’re specialized and we’re only on the Adobe Magento e-commerce platform. If a company is not on Magento, we convert a lot of sites over. We do everything Magento related. If you know someone who needs design development, maintenance, training, support, we’ve got their back. Email our team, [email protected] or go to magemontreal.com.
Alright, Tivan, I’m happy to have you with me today. We’re just the two of us today, there’s nobody else. So welcome.
Tivan: Hello Guillaume. I’m delighted to be here.
Guillaume: Thanks. So let’s talk just a little bit quickly about your background, getting to where you are now. So you built the first company, an app business and that led into a second company, which was a bicycle company that you sold in 2019, to an e-commerce conglomerate. And that led you to your third company now, which is Tone Messaging and so far you’ve raised $4 million to build this company. It’s a very interesting venture that you’re on here. Can you tell us a little bit about this product, this third company?
Tivan: Sure. So at Tone, we aim to be the most personalized mobile messaging or mobile marketing company on earth. The way we got here, very much was an itch that we were scratching ourselves as e-commerce founders. So I started this bicycle company in 2012 with my co-founder Slava. We grew it for the better part of 4-5 years, first from a Kickstarter that did like $100,000 in sales, to four successful Kickstarters, 30,000 customers worldwide, and millions of dollars in sales, with a whole slew of products from bicycle lights that were really tough and rugged, to full bicycles that we guaranteed against death. And you might notice this sort of service component to everything we were doing like we guarantee this thing about our bicycle. So that sort of mantra actually led us to do kind of crazy things, in terms of what we promised customers.
One of them was, we promised that we will just have this personal relationship with you and text you whenever you want, you can just text us questions. And through doing that, we figured out that the best way to convert somebody on an $800 bicycle sale, was to befriend them on text message. Talk to them for a while, make sure all their barriers were sort of uncovered and avoided, and then sort of build this personal relationship over time to convert the customer. So the kind of the initial foundational insight that we had was that people really want to text and it’s actually a really, really good conversion channel.
Guillaume: All right. And, of course, there are lots of SMS, in marketing automation platforms out there, MailChimp, Klaviyo, and a bunch of others. You already covered a bit how yours here is different with personalization. But do you want to go a bit deeper in this aspect?
Tivan: Sure. I think over the last three years, there’s been quite a proliferation of SMS marketing companies. And I won’t really knock any of them, because a lot of them are good at different things. You’ve got some companies that are really, really good at just doing automations. Other companies that are really, really good, lead collection tools, so you can build subscriber lists really fast. What we really think about is, as your SMS marketing inbox starts to fill up, or as your SMS inbox starts to fill up with marketing messages from brands, what is sort of the next evolution of that? What is actually going to get us as consumers to look at these messages and to respond? So right now, SMS has a 99 or 95% open rate, click-through rates that are 5x higher than email. So it’s a natural channel to be moving to as a marketer, whether you’re on Shopify or Magento, or, you know, headless or WooCommerce. But that’s quickly going to diminish in power over the next three to five years as everyone starts SMS marketing.
The question is how do you actually cut through the clutter as a marketer? And how do you make sure that consumers are actually looking at that SMS inbox and clicking on your ad? We think that the answer is actually generating conversations with customers and actually building a relationship over time.
Guillaume: So, let’s create a scenario here. Let’s pretend I am a merchant, or there’s a new merchant here. He’s doing a lot of things already, he has a successful e-commerce store, preferably on Magento, but other platforms are okay too. What would be the game plan? What’s the roadmap here? Say, let’s start implementing SMS from the zero and how do we run this up?
Tivan: Yep. I’ll start with kind of the general roadmap for SMS that is working really well, for merchants. And then if you twist my arm, I can speak to the specific roadmap and the specific strategies that we suggest people use. But in general, just like email lead collection, making sure that when people get to the site, they have a good call to action, to put their number in, to receive some sort of discount, or to be the first to know about special offers or product launches. More and more shoppers are mobile, so they’re naturally doing a lot of their shopping online. So it makes a lot of sense for them to actually put in a mobile way to contact them. Also, everyone’s email inbox is full of junk. So a lot of people say, if this is a brand, I actually do want to hear from them, I don’t want to go into my junk, I want to actually be in my SMS inbox.
So the first step is making sure that your lead collection game is tight. And there are plenty of players in the space, Klaviyo being one of them who we have an integration with, that does a really good job of the lead collection pop-ups for both SMS and email. The second step to that is then having an automation strategy that dynamically adjusts to all sorts of customer data points, how much they’ve purchased, whether they’ve been in an order, whether they’ve recently ordered, anything you can think of, and to send targeted personalized messages to those customers throughout their customer lifecycle based on the actions that they’ve taken. And then the third sort of higher-level air support approach is to have a general sort of more general marketing campaign strategy, to make sure that on a monthly basis, or a couple of times a month, depending on the nature of your product, you’re reaching out to all customers, and saying perhaps a little bit of a segmented message, here are the new products that we’ve got, here are some deals that we’re offering. And based on who you are, here’s what we think you’re going to like most.
Guillaume: Okay, so you start with building up a list of people. Obviously, you can use your existing customer list, but lots of people visit your site, but you don’t have their numbers or their emails. So you want to collect that to build the list, then you want to send them personalized messages as much as possible. And also your third phase is general, targeting everybody, ideally, with some segmentation still, but at the very least send out the newsletters and the SMS to everybody. So that’s like the global play, right?
Guillaume: Okay, and now let’s narrow it down a bit like the merchant is coming to you, he doesn’t have a clue. So now what will you tell him? Okay, he did that. Now he’s sending out his monthly thing, he has a capture system. He’s trying to send some targeted relevant messages to his customer, what’s the next step for him?
Tivan: Sure. So what a lot of merchants that implement SMS find is, people think of SMS as a personal two-way channel. So consumers interact with it as such. Meaning that if you start sending 1000s of one-way messages on SMS, promoting sales, and promoting new products, you’ll start to get this steady flow of responses. So you might send out a message about a sale, and you might have a few 100 customers respond and say, actually my code is not working, or I want to buy this bundle and I’m not exactly sure how to put it in my car, or what’s the shipping going to be to this address in Florida? All sorts of questions that emerge as various to purchase that with a traditional customer service model, there’s no way to really convert those customers quickly. Because the customer would have to email support, wait at best, several hours if not a full day to get a response and by that time, you’ve kind of lost the opportunity.
So the next iteration of this that 1000s of our merchants are figuring out is to make this a conversational channel that within minutes you can have answers that actually convert customers who are naturally going to respond to this type of marketing.
Guillaume: Very awesome. Okay, so you make it a conversation, as you’re saying before. And that’s the service that actually Tone is offering because you mentioned Klaviyo, if I understood correctly, you have a little bit of an overlap with them. They can send SMS again, send emails, you can do that too. But then you seem to have that personalized workforce that will do sales and communication, back and forth, and remove barriers to sell by answering customers’ concerns to move the transaction forward.
Tivan: That’s right. So our platform, in addition to having all the standard SMS marketing, SMS marketing automation features that you would expect, we have a team of agents in the background who we call superhumans and some AI in the background, that at all times are looking at customer responses, and figuring out the best answer to convert the customer or to move them down the funnel. All the brand has to do is set up some easy parameters, and basically set the rules of engagement. And over time, this system becomes very powerful, a big knowledge base, often bigger than the actual knowledge base that the brand has, like for their actual customer support. On average, three to three and a half minute response times on every single message.
Guillaume: Oh, that’s quick. Okay, a very interesting approach there. We’re still fairly high level in the general concepts and strategies. Now if we zoom down even more, we get tactical. Is there any specific tactic that you saw a better version or lift for the brands, for example, abandoned cart, email reminder? Or is there a specific hot tactic of the moment?
Tivan: Yeah, I would say our bread and butter and how we actually started this business as I mentioned kind of generally, was texting customers and working on the actual use case, that really convinced us that this was an opportunity. We realized that a large percentage of our customers or potential customers, were putting an $800 bicycle in their cart, and then leaving, and no amount of cold email, or even trying to call the customers or reach out to them on Facebook, like nothing could actually get them back after we lost them there. But we knew that they weren’t just abandoning because they lost interest. We knew that this was a high-involvement sale. They had questions ranging from, how do I put this thing together when it arrives on my doorstep? How long is it going to take because I need it by a certain time to ride? And can I get a discount? All questions could be answered with some automated message or with a human at the right time.
So what we started doing is, we said, why don’t we just build with Zapier, a quick automation that engages these folks in conversation after they leave their number, and after they leave the bike in their car, and basically surfaces the barriers to purchase that we can then sort of insert our sales team in and close the sale. So the first message said, it was very long, kind of embarrassingly long now thinking about what actually works. But the first message we ever sent was like, hey Guillaume, this is Tivan from Fortified Bicycle. I’m your rider advocate here, and I just want to make sure that you have the best rider experience. Before completing your purchase today, are there any questions I can answer for you?
There, very, very long, but it kind of got the point across. The thing that we learned was, people respond at a really high rate to a personal message like that. By the time we had tweaked a little bit, we were getting 40 to 50% response rates. Now that’s pretty much standard across our entire network of over 1000 brands. Once someone knows they have a human that will get back to them very quickly. All their barriers just surfaced. So like, well, it’s a little bit too expensive for me, I want to make sure that I get the right size, and I want to make sure that I can put it together when it gets here. And then, of course, it just takes a human with a few templates arranged in the right way and responding quickly enough to quickly pick off all of those answers or questions rather, to convert the sale.
So I would say the main play that we have across all of our brands, and sort of what we’ll start our free trial with is always the abandoned checkout recovery play, where we send a very short message, two to three sentences, asking if the customer either wants a discount or if we could help them complete their purchase. That tends to have a 25% conversion rate. But not only that, that actually starts this long-term relationship where the customer now has this person that sold them the item. So we see hundreds of people every single day, come back to Sarah or Rob or Maya, whoever it is, that is the persona that’s texting with them, and saying like, hey, I bought my first thing with you. I’d love some advice on what you think I should buy next, or can you get me a discount on this next thing?
Guillaume: So discounts are great. Not all merchants like them, though, of course, it eats a lot of their net profit margin. Does that ever cannibalize sales to offer the discount or do you have some kind of a rule you wait a bit, you ask the fish to fit in first like, answer their questions, and if that did not convert, then the second series of message would be like with a discount or?
Tivan: You know we customize every single one of these automations for every merchant to make sure that they’re maximizing everything from sales to profitability. But one thing I can say is more often than not, we actually increase the average order value even when we’re offering discounts. The reason being that once somebody feels comfortable and they feel like they have a salesperson that is knowledgeable and that they’re dealing with, and they want to buy from ostensibly, and they actually add more to their cart. So most of our brands, especially as the average order value increases, like if we’re selling expensive clothing, bicycles, furniture, we tend to see the average order value increase by somewhere between 10 and 15%. Just because there is that one in every five or one in every 10 customers that say, you know what? I want to buy from you, Guillaume. I’m going to add the loveseat here.
Guillaume: Alright. I like it. Very interesting. Is there anything else that you’d give as a tip, advice, or whatever attractive strategy for somebody putting in place SMS marketing strategies?
Tivan: Any way that you can make it personal for the customer. So segmenting based on action, based on what you know that they like, is very, very important as soon as possible.
Because like, I’m looking at my SMS inbox over here right now. Now, I’m a little bit ahead of the curve in terms of how many e-commerce brands I subscribe to an SMS. But it’s hard for me to find my friends, and my mom in there. I missed all the marketing, that’s really important to make that marketing personal enough that you actually want to give it the time of day. So that’s one, just make it as personal as possible. Two, which you can do yourself or you can do with us is, find a way to generate a conversation and to generate replies from customers. Because that is the best way to make sure that you cut through the clutter and you’ll have a sort of a lasting relationship that turns into sales.
Guillaume: And let’s say I have some clients who already have the abandoned cart tactic in play, what would be the next step after this one? What would be the second one to put in place after the abandoned cart, if they’re only doing abandoned carts?
Tivan: If they’re only doing the abandoned cart?
Guillaume: Yeah. The general blast, everybody, and the abandoned cart. That’s it.
Tivan: Got it. So if they’re not doing a lead collection on the website, either within a time to lead collection, like 30 seconds after you arrive, you’ll have a pop up that says, get 10% off by subscribing to our SMS list. That’s definitely one of the fastest ways to grow your subscriber base. So that’s what I would say is next. The next thing I would say is automations. That first abandoned cart message is important. If they don’t purchase, then reaching out to them 30 days later, and asking why they didn’t purchase or offering them something new, is also very important. And then automations around folks who have purchased one thing, but there are 10 accessories that they could buy. Building out all of the different opportunities based on existing customer data that you already have, like if you tend to see customers buying a second item after X amount of time, then you’ll know a couple of days after that time window has expired, where most people will buy the second thing, reaching out to customers and trying to push them over the edge. It’s also a really, really good thing.
And then the third thing, which is sort of a Tone exclusive here, but you can also do yourself, is what we call live text. These days, people don’t have any sort of patience when it comes to getting an answer from a brand. So most people aren’t even going to spend the time when they have a question to search for the support email on the website. Live chat is also really, really hard to keep people engaged with, because if you don’t respond in seconds, then the person just leaves. So we think that live text is actually a really happy medium. So what it is, it’s actually a button that you put all over your website that enables people, while they’re on their mobile phone, tap, it opens up a text message conversation with a pre-filled message like, for the Fortified bicycle, I’ve got a question. And then within minutes, they’re actually texting with someone at the brand.
The reason that’s really valuable is twofold. One, it’s an asynchronous conversation so that people don’t have to sit on the website waiting for a live chat conversation to finish. Most people don’t have that kind of time. It’s fast enough that people don’t forget about it like email and it has the added benefit of adding to your subscriber list. So after you’ve solved that problem for the customer, then they are actually like a VIP highly engaged customer that when you send a message to, they’re like, Oh I had a great experience with them! Yeah, I’ll consider buying from them again.
Guillaume: But I do remember like, we’re both the new dads, like how being a dad affects your management styles as an entrepreneur, say okay, we know about that.
Tivan: Yeah. I think this was something that I just mentioned to you offhand when we first chatted, maybe because it was on my mind. Because I think for the third time in a day throughout the business day like, quell the crying baby. But I think something that you would probably agree with is that perhaps going into fatherhood, I thought that I had a lot of patience, I thought that I was calm in the face of adversity. Nothing could have prepared me for getting up five times in the middle of the night to a screaming child that knows no better, and that you’re sort of the only sort of resource for. So I feel like I certainly won’t call myself a perfect leader at all. But I do think that it’s given me a little bit of insight into how much patience just people need in general, and how you get good results out of folks when you give them the sort of patience and the attention that they’re asking for.
Guillaume: Yeah, I agree with that statement. Like getting up five times a night, it’s really hard. The first three months were really hard for lack of sleep. It is not enough to describe it. In our case, it was a little sleep torture. The baby could not hold the milk, so anyway, it took an hour or two to make him sleep, and he wanted to drink two hours again. It was a nightmare.
Tivan: You mentioned that you went off coffee around that time?
Guillaume: Yeah. Actually, no, that’s one year after. You got the timeline right, one year off.
Tivan: Got it.
Guillaume: Yeah. Going off coffee is an experiment,we’ll see if that works. The doctor was explaining to me something that I’ll not be able to explain back to you, that energy is a molecule, they can identify it. Basically, that coffee molecule blocks your true energy molecule. So it’s a test, we’ll see if that’s true that no coffee actually gives you more energy after you’re done with your period.
Tivan: Well, if that’s the case, then I’m running on about 24 ounces of fake energy.
Guillaume: Fakeenergy, yeah.
Tivan: But it’s keeping me happy.
Guillaume: I like to boost for sure from coffee. But anyway, it’s an experiment, we’ll see how that thing goes. I want to hope that I would never cut my coffee, I need my coffee in the morning to just get started, as an entrepreneur. But hey, it’s a test. What if I can have even more energy than by just getting on that truly healthy lifestyle, plenty of sleep? If I need more than eight hours, maybe nine, now that the baby sleeps at night, it’s a test, we’ll see. I’ve seen other studies about side effects of coffee, and so on. But what do I know? I’m going to test it and see if it works.
Tivan: I’d love to hear the results.
Guillaume: Yeah. So what’s next for you, for your business? What’s the vision? Where are you going?
Tivan: Yeah, I think the biggest insight that we’ve had over the last six months, is really that the shortest distance to increasing your lifetime value with a customer is to sprint to that reply.The quicker that you can get a customer to engage and to reply, the more they will spend in a shorter amount of time. So everything in our business is really geared towards, at every single interaction point, whether it’s on the website, at abandoned Checkout, in automations, in recurring monthly campaigns, how do we entice folks to give us a message back? Because once we have that message back, we can work with that, and the possibilities are unlimited, versus sending to a list where most people don’t really engage. You’ve got a single-digit click-through rate, and then what do you really know about the rest of the customers? So what that really means in practice for us in terms of a roadmap, is thinking about building a software that takes the data that we know about customers, and allows marketers to leverage that to generate the reply. I know it’s a little bit abstract.
Guillaume: But you’re touching on something important because you’re talking about the speed to that first reply. First, the customer gives you a reply, and then the speed for you to reply to that reply as fast as you can. Very often if you analyze a lot of scenarios for business, I mean, speed like that is very often the key driver above almost everything else. You look at project management, look at car manufacturing, look at what Elon Musk puts forward as the most important thing like he’s crunching time mostly, more than other things. If you look at an example, like the Toyota Production System, the one piece of all that stuff just in time as they call it also, it’s the same thing. They want the production to flow from the start to the end as fast as it can and stuff does not stay stuck in one state. So it’s really flowing fast and they optimize everything around slow, that stuff doesn’t block, it goes fast. So when I hear a concept that you want this to go fast for the first reply from the client, and to go fast as the first reply to your client’s reply, to me it sounds like a winner from a more universal business point of view.
Tivan: Right, there’s also kind of like a social morality aspect to this. There’s folks in your life that maybe you’ve tangentially met them at parties of friends of friends. And if you don’t have a good conversation with that person, soon enough, what happens? You kind of have this awkward barrier between you where you’re like, well, they don’t really want to be my friend, I don’t really want to be their friend so we’re just kind of acquaintances and we just nod at each other whenever we see each other. I think the same is kind of true with a brand. If you join their subscriber list, if you start interacting with a brand, but you don’t really get much back, or you don’t have a real reason to engage, eventually, you’re like, yeah, this is a brand I signed up for, I don’t really remember why but I’ve gotten my 50th message from them and now I’m done. As opposed to imagine if you sign up for a list with a brand and within the first 10 minutes, you’ve kind of made a personal connection, a personal bond with someone at that brand. What sort of trajectory does that put you on as a customer with them?
Guillaume: That’s a huge difference. You have more of this in the B2B world or high end B2C customer products, like you’re saying paid $100 or more bicycle, then you have the time and the money to pay a sales guy to do all that. It’s interesting if you’re bringing this more and more to a mix of automation, AI and train staff and knowledge base for support, and so on that you’re trying to bring something that’s more exclusive, usually to something that’s becoming more and more mass market. That the lower end product could afford that kind of service and personal connection with thousands of their own customers with that approach.
Tivan: It’s the Tesla’s strategy.
Guillaume: Yeah, you start high and then you go down.
Tivan: Start with the expensive sports car and then eventually cannibalize yourself with a cheap model.
Guillaume: It worked for the iPhone as well, you just cannibalize iPhone and cannibalize iPod. It makes sense, because in a way, otherwise, somebody else will take that market. So, you’re not truly cannibalizing yourself if you’re actually taking the market because otherwise, somebody else will take it from you. You cannibalize yourself, it’s true, but it’s to protect the next slice of the market as well, so it’s actually expansion. But it has to be done in a smart way, if you didn’t analyze it right, you could be cannibalizing yourself in the wrong way.
Tivan: Guillaume, I had a question for you. Am I allowed to ask questions?
Guillaume: Of course, go ahead.
Tivan: Okay. When we first got connected, one of my first questions that you started to answer was, in the Shopify ecosystem, we’re starting to see merchants really adopt SMS marketing pretty fast. But as we’re rolling into the Magento ecosystem, we’re seeing pretty good adoption but it does seem like in general, they’re definitely behind in terms of SMS marketing there. What do you see as the barriers to brands that are using Magento to jumping on SMS? Is it a focus thing? Is it a technology thing? What are the main barriers to really getting into this growth channel?
Guillaume: I’d say it’s the crawl, walk, run aspect and a lot of them are not running yet. They’re just walking. For sure, you need to be there in your whole roadmap that now it’s time for this. The ease of setting up the thing, if you have a really great extension, I have, for example, Avalara for the tax. In Magento, install that extension, the US taxes are super complex, and there’s never a problem. Maybe there are problems when they set up with Avalara, I don’t know that part. But I know that for the Magento part, I’ve never had a single bug with the thing. It’s like I put it in my project plan, and I lower the amount of hours because I know this is not going to give us a problem. I’ll recommend it strongly to my clients. I know this one works awesome, Avalara can’t go wrong on Magento.
Tivan: That’s a really good heuristic for whether or not it’s a good partner of yours, is you lower the number of hours when you see them in a project plan.
Guillaume: Yeah, exactly. I do that for very few. That’s one thing, you want to feel for sure that the solution is really solid, the integration is really solid, end up rolling this out. Doesn’t mean that it won’t be a lot of work, that they don’t need to dedicate a person in house to do all the marketing with you, feeding the information, knowledge transfer and all that, but that it’s not going to add too much technical hurdle, that for sure is one thing. Because these merchants have a lot on their plate, they’re running like $100 million a year company and they have sourcing and opening new warehouse and new factories and this and that. These guys are busy, they want to get to the next thing but sometimes despite their budget, they seem to have a hard time reaching the full long run, and that’s a really massive company and have massive budgets. The easier you make it for them on board, I’d say it would help for sure.
Tivan: Guillaume, one of the things that I started to notice pretty early on, as we started onboarding our first 50, 100, 200 clients was there was like this distinct profile of entrepreneur, or founder that we would meet that, for whatever reason, had figured out how to really unlock really fast growth. Not 2x per year, not 3x, but like 10x?
Guillaume: You got me interested, I want to hear about that.
Tivan: Maybe if you push me, I could kind of give you some bullet points, but I’m going to ask you a question first. Working with the number of clients that you guys do, if you try and segment like the top clients that you work with, what would you say is the profile of the founders, the founding teams, and the executives that you work with, the folks that are having the most success? What do they like in philosophy? What do they like in demeanor, and how do they think about the world?
Guillaume: You asked me to define the persona of the most successful ecommerce entrepreneurs. For sure, they get the work done, all of them, or they delegate somebody else to do it. There’s not much laziness around, like I don’t have much pictures for my product so I don’t have descriptions and specifications. They see the value of working to get the stuff done. I’m not just going to say that they all work like crazy, but stuff gets done, that’s the foundation.
Tivan: For you guys, it’s like a give and take relationship, right? Because you’re like, we’re going to build the technical side, but we need you to upload X number of photos, they need to be of this quality and needs to be by this…
Guillaume: Yeah, because if you don’t see the quality of anything online, it’s not going to convert, it’s not going to sell. You need a high-quality picture, you need the proper description. When you go to the store, you pick up a box and you read all the details on it, it’s easy. But if you just upload the product title and almost no description, no specification, you need to give to the buyer all the information he needs to make a buying decision. In the sheet, there is comparing other tabs and other vendors and other options, so you need to make him be able to take a decision. That’s one thing about these entrepreneurs. The rest is very varied, trying to come up live with persona marketing, personas of these guys.
Tivan: Are these folks all marketing geniuses?
Tivan: Do they have some sort of insight about acquisition? Or about customer retention? Or about product? Or is it an amalgam of those things?
Guillaume: No, I think you can further divide this in like audio retailer, or the manufacturer or an import export or wholesale business. On the retail side, you need brands that are a bit more exclusive, that you need to get distribution rights. Acquiring those awesome brands being approved by them to be an official distributor becomes even like bragging points to some degree. And it gives you a lot of lift, because you have that large company, and I’m not going to name any names here, that’s broadcasting all that marketing material out there, why this brand is amazing, and then people on the web will search for it. So, having high quality brands is a huge factor for success. This is for retailers.
Now, you may have a company that decides to start their own brand regardless if the sale on their own site or if they sell on Amazon, some are on Amazon or whatever, that’s fine too. But that’s a different ballgame because then you don’t have that giant in front of you who’s really making the product shine, you have to be the one doing that. It’s a very different approach here, you’re more on your own in terms of leveraging traffic and so on. You could even say, we as a company, as an Adobe Magento partner. We are in the wake of a giant, Adobe’s in the front then they give us clients. They’re blasting the world about how Magento is amazing and then customers come to ask us. It’s the same strategy that you can use as a retailer online, use these at the front. This is specifically for retailers. It’s really case by case, for manufacturers, you’ll need to be really strong with the distribution of it actually. Some manufacturers are also the distributor and don’t sell direct, some will just stay the manufacturer and then they’ll have the classic distributor retailer model.
For manufacturer, then you have to be really amazing at finances and all the operational stuff, factories are very expensive. They’re more on the classic business side of things. And then when they come online, they tend to be already super established, they will be more about automation, just like we’re a factory but online. And how can you reduce the number of phone calls to the office there by having a proper B2B Business to Business portal online? How do you make sure that they can request quotes online, that the whole process is not some kind of clunky annoying thing, but that the customer wants to come back. So even though it’s business to business, you’re still dealing with individuals. The app should be as fun to use as if it was a general consumer app. It’s a sort of a mix of those mindsets, but it will be more on the process of formation and automation of sales flow online.
Tivan: Got it. The thing that prompted that question for me is… What I was finding a lot when I spoke with founders of these companies, with varying degrees of success is the most successful brands tended to have founders who really had a unique insight about the product and the pain that it was solving. We would have brands that started a wine company, like usual wines for example, where the founder just had a problem buying good wine online at the right price. And he was like, this is a problem that I think I can solve, and I’m going to dedicate all my time to solving it instead of being aware. So, you get on a call with them and they’re like, we know everything about who this customer is, because we are the customer and that’s why we’re having success.
Guillaume: That’s true.
Tivan: We’re able to dial in the product, and the message really well. We’re not wasting time selling a generic product amidst a market with tons of competition. The second thing to your point is that those folks that tend to have that founding insight about the product, are really good at outsourcing the things that they’re not going to be good at, so that they can focus on their competitive advantage in the product and the messaging insights. Aligning with a really good agency for engineering for dev, aligning with really good growth agency, for their specific product and for their specific stage. Those are just kind of things that I don’t even know that I necessarily came into this conversation thinking about, but it is something that is trending lately.
Guillaume: I do endorse that. When you’re your own customer, it allows you to make decisions in a much easier way and you understand in depth, all of that. So, it’s always great if you’re your own customer. I would not say that they all are though. Ideally love and have passionate about the product itself, that is the highest level of success. But at the very least, they must like the product and be interested by it and keep that interest for the product. But they’re not all their own customers if you wish. Some are selling commodities and stuff and there’s no way they can use much of the stuff. But you’re talking more about the psychological profile of these guys. It’s highly varied. But yes, understanding their customers well is something that they tend to have, in a strong way because there’s only benefits to that. On a different topic, how do you see ecommerce evolving in the next five years?
Tivan: Caveat is that I have a little bit of a biased opinion here based on our approach to marketing. But here’s kind of where I think the market is now, I think that there is a big discrepancy between the game that companies talk in their marketing, and the level of support and the support experience that they actually provide customers. The analogy that we talk about internally at the company is, imagine if you had an acquaintance that lit you up all the time, texting you, calling you, emailing you saying hey, come to my party, come to my party, come to my party, it’s going to be great and you’re like I got to go to this party, it sounds like it’s going to be amazing. You show up at the party, and then that person won’t even give you the time of day, won’t even talk to you. And they’re like, I don’t have time for you. That is pretty much the experience that every online business in the world is giving their customers right now, where they’re willing to spend the time, energy and money to get folks to the site. But the moment that customers says, I might want to do business with you, can you answer a question for me? They’re like, Oh, that’s going to be at least eight hours, and send us an email.
I think that brands that are smart are realizing that especially in a post COVID world, and in an increasingly mobile world marketing, sales, and support are really going to converge. And the brands that have the advantage are going to be melding their marketing with their support a lot more. SMS happens to be the channel where those things converge, we think, the best. You can build a list of customers that want to listen to you, you can send messages to them and at a moment’s notice, you can give them the support that they need. And we just think that at least from a consumer perspective, we ask consumers, 70% of customers want to text back and forth with brands. So, it’s only a matter of time before all businesses are doing that.
Guillaume: That’s interesting, so what you’re talking about is coming back a bit to omni channel that, regardless how you contact the brand, you’re going to have the same great experience and also just in general, that they care about it, they don’t make you wait all those hours. They can engage by text messages, or chat and get quick response. I do agree that this is something we’re going to see more and more because omni channel is difficult to put in place, it’s a big endeavor. There’s a lot of disconnected system, the will often have a separate accounting system, separate Enterprise Resource Planning system, sometimes it’s the same, sometimes not. And then they have an ecommerce platform and they have Facebook, then they have a different sales platform or a different platform for support sometimes and you have to connect all that stuff together. It’s a lot of work, I do see a lot of the legacy ERP over the next five years, getting progressively replaced with something more up to date, more web based, to connect with websites what’s called the headless right now or PWA, which is the same thing, they are Progressive Web Apps. That’s going to help connecting systems together. From a technical point of view, sites will be faster and we’re going toward that. There’s going to be that change towards progressive web apps from a technology point of view for a consumer that needs a site that’s faster, and that brand trying to get up to speed in a way, the service is far from ideal. They’re going to be improving operational excellence, basically, and connecting all the systems together, omni channel, improving customer experience, like you’re saying.
Tivan: I’m going to bet on two big trends. One is a lot more social shopping, like a lot more checking out directly in Instagram, TikTok, less reliance on the actual CMS platforms and the actual websites. And the consumer expectation that brands give them instant messaging support, whether on SMS, or on social channels, I feel like those two trends are really gaining momentum and really sort of match this post COVID world of people really doing the bulk of their shopping digitally and still feeling like they need that human support. They don’t want to click all the way down into a website, they want to buy the thing, when they see it. My wife does this all the time on Instagram or Facebook, she’s like, I don’t even want to go to the website, I just want to buy it right there. Often, she has to go through too many hoops. So, being able to buy a product at the top of the funnel, and being able to get all the answers to your questions at the top of the funnel, and throughout your purchasing journey as quickly as possible. I think those are the two trends that we’re really going to see accelerate over the next few years.
Guillaume: I’d go in a little further there. If you’re talking about buying on apps such as Instagram app, I would agree that that’s going to keep going up. But if as a business, I have an app, I think that’s going to go down. And then websites are going to take over the app market more and more for brand-based apps. A while back, everybody wanted to have an app. Like why do you want to have an app? I don’t know, but I want an app. So, that trend’s going down because you need to update the app all the time, the new version, and so on. There are very few benefits to the app, you have to upkeep. You have to create your app and to upkeep it, then you have to create your website. So, what we’re seeing is just that the app is just a shortcut to a full screen version of the website and there’s no app development. So that’s the tendency of apps going down for businesses in general but I agree there will be more sales on Instagram and so on. Anyway, we’re forecasting stuff here so it’s fun. The other forecasting stuff, of course, COVID changed the world, but it just accelerates ecommerce. In the first three months of COVID, there was like 10 years of progress in terms of the size of the industry and the volume of transactions and so on. So, COVID is just accelerating ecommerce so that stuff changes faster. We will see at one point drone delivery from Amazon and so on, this is something that’s been talked about. It’s going to be like almost ordering a pizza on Amazon, eventually, for the big city centers. It’s not going to be like prime next day delivery. It’s going to be prime two hours delivery to your door from a drone.
Tivan: What a world our children are going to inherit! By the time they’re old enough to do things like that, we’re going to be like, ‘back in my day…’
Guillaume: ‘Back in my day…’
Tivan: You go to a store to find the thing that took you hours.
Guillaume: Yeah, and you didn’t know if they had stock before you went to the store. It was a discovery process. Now you check online if they have stock, and you just order. But there’s still a lot of operational excellence that is needed. I like Tim Hortons restaurant but I tried placing two orders this morning on the app and I was unable to. This is a big corporation in Canada. And you’re like you’re not there yet for operational excellence for your app, actually. Because as a consumer, I tried twice and I was not able to. It says an error has occurred on the checkout thing.
Tivan: It’s funny you say that, because the app has the ability to make you a lot more loyal if the experience is perfect. The Starbucks app has always worked so well for me, to the point where I can think I need to Starbucks, know that there’s a Starbucks on the way, my wife can put in an order while I’m driving. And then like seven minutes later, we just walk in and grab it and we’re done. But recently, I bought some shoes on the Nike app. And I had this issue at checkout, and there was nobody to help me. There’s nothing I could do and it was some issue with maybe my zip code not matching, because we recently moved. So, I think my zip code didn’t match on my credit card. But once that problem happened, apparently, I was doomed in the app and I couldn’t check out at all because they like blacklisted my IP for a while. I just set that up by googling around. And that is a very app specific problem that Nike didn’t solve, because they’re not app developers, right? It’s just one of many topics.
Guillaume: It happened to me a while back, I think on some Xbox. I tried buying some things like 999 or something like that. I got to the clients, the clients called the support and they said I’ll check with my manager. And it’s like, Hey, man we run a business, we own real estate and it’s kind of a company here, 999. I was like, I think it’s a fraud case and they were like are you kidding? Anyway, operational excellence is extremely difficult to achieve, they will improve their app, I’m sure they’ll get there. They’re very good, very competitive. I would not want to compete against these guys with this market in Canada. Anyway, it’s quite a challenge to reach operational excellence and brands will get there. So, thank you for being here today, Tivan.
Tivan: Thank you for having me.