secrets to scale

Secrets To Scale Podcast
039 - The Future Of Product Subscriptions With Matthew Holman

039 – The Future Of Product Subscriptions With Matthew Holman

Secrets To Scale is a marketing and entrepreneurship podcast that revolves around hearing the stories of successful entrepreneurs and uncovering their secrets to scaling their businesses. Music for every episode of this podcast was written and produced by Treycen Clausse.

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Tanner:

This week, I have Matt Holman, Marketing Director at Qpilot. On the show, Matt and I talk about user experience and why that’s so important to find success in e-commerce. Matt is an awesome guy, such an amazing marketer. Let’s get right into this week’s episode. Welcome to the show, man. I’m really excited to have you. Go ahead and introduce yourself to the audience.

Matt:

It’s an honor. I’m excited to be here. Yeah, so my name is Matt Holman. I’m currently the Marketing Director for Qpilot, which has a plugin called auto-ship cloud that works with e-commerce companies to build up repeat and recurring revenue.

Tanner:

Awesome, man. So how did you get started? Take us on a walk down memory lane.

Matt:

Yeah, in my twenties, I was mostly in print design. I did a lot of work with creating signs and other types of graphics and stuff. And then I’d say about five years ago, I wanted to pivot my career and went back to school. Actually I have a degree in information systems. So a bit of a tech guy, but as with my graphic design background, I’ve always loved marketing and I’ve always wanted to kind of get online.

And so I actually ended up doing e-commerce internship a few years ago and for me e-commerce is kind of the perfect blend of marketing and technology. And so those are the things I’m most passionate about. And I was able to find a career in that, I’ve been a little bit of an operator consultant marketer. And then the last couple years migrated into the B2B side of things, which is trying to help e-commerce companies get the solutions they need for their business objectives.

Tanner:

So give us an idea of what auto-ship cloud is. It’s relatively new, right?

Matt:

Well, yeah, it’s been around about two years. There hasn’t been much marketing for it. So it’s been kind of hidden under wraps. I think for most people, the way I like to think about it is a few years ago in e-commerce the big buzzword was drop shipping, right? So everybody thought, okay, I can start a drop ship model and I’ll retire to Tahiti and I’ll never have to do anything again, because it will be automated and that’s highly competitive. And there are a lot of people that are successful in drop shipping, but again, it was like a buzz words, what people were kind of flocking to. And the one that’s been successful, I think recently the last couple of years, is subscriptions or recurring revenue. It’s like, okay, I’m going to start a supplement business. And then I’m going to get a thousand customers buying my stuff every month and I’m going to get to retire to an island in Tahiti and not have to worry about managing my company. And making all that happen is that there is a ton of subscription software out there that helps people with billing, which is just like, hey, I need my CR. I need to hit my customer’s credit cards every month or every six weeks, whatever that occurrence is.

But for anybody trying to operate any commerce business where you’re like, there’s a lot of other things to manage where I’m trying to give my customers more flexibility. I need shipping rate integrations. I need to know what my available inventory is for upcoming subscriptions. Those are not handled by most billing software. So auto-ship was built by our founder, David Bradley, who was an operator and he’s built these systems before. So he’s an e-commerce operator who’s built an e-commerce subscription software to help in delivery. If you’re getting a physical delivery you need on a repeat basis, then auto-ship can help you.

Tanner:

Yeah. And as someone who has designed and developed several e-commerce websites, I can definitely tell that there was a void in the market because you know, all these subscription plugins like WooCommerce subscriptions, for example, that’s more like a software subscription or like paying a monthly fee for access to the program. There’s really nothing out there for a physical product.

Matt:

Yeah, no, you hit the nail on the head. It’s definitely something that we’re trying to solve.

In the end, that’s what you have to do is just test everything.

Tanner:

So, man, what are some obstacles that you guys are facing currently and trying to scale or grow auto-ship cloud?

Matt:

Yeah. Well, that’s an interesting thing. I mean we’re not your typical SaaS model where we’ve got this free plan. We’re trying to get you to try one little thing and then try the rest of the software later. We have a somewhat sophisticated solution in that it does a lot. We try to make it really easy to implement. So for us challenges have been that we’ve grown to about 200 customers without any real marketing. So on the one hand, we’ve got a great product that we know that works. On the other hand, we don’t have a ton of experience in how we talk and communicate that to people so that they can start using us. So it’s a classic marketing challenge, which is how do I get my product in front of more people? How do I talk to people in a way so that they’ll believe me, that our solution could help them? So that’s something that I’m dealing with on a daily basis.

Tanner:

Yeah. And that’s marketing in a nutshell, right? Talk about your solution, ways that your target customer can understand, speaking their language, speaking to their pain points and problems. So, Matt, what would you attribute your success to over the years?

Matt:

You know, it’s funny. One of the things that had got us feedback in a job review a long time ago was that I was really great at taking feedback, which at the time I actually was kind of offended by like, you know, you don’t value my incredible intelligence or like my problem solving capability or time management skills. It’s like, no, my manager felt like feedback was my greatest strength because as soon as the ego kind of subsided and she explained it to me, she said, I know that I can tell you good or bad what’s going on. And that you’ll listen. And, kind of looking back, that I think has been the secrets of my success is that I pay attention and I listen and I try hard to set me go aside.

I don’t need to be right. I’ve had a lot of experiences in my life where I believe that anybody who knows, knows why things are successful. So I’m never concerned with feeling like I’m not getting the credit that I need or anything like that. I’m really just paying attention to a problem and trying to solve it. And I listened to people and network to people read resources, experiment. And I think that’s important, honestly, especially in a landscape like e-commerce where it’s so easy to test things quickly to see what’s working or not. And in digital marketing it’s the same thing that it makes a lot of sense to pay attention to more people and what they’re doing and not just be kind of hard headed about what you want to do.

Tanner:

Yeah. I couldn’t agree with you more. The moment we let our ego step in front of us and in fact, our decision-making, that’s where we start getting stagnant, especially in marketing because it changes every single day. What worked yesterday, isn’t always going to work today.

Matt:

Right. No, definitely. I think listening is just so important, whether we’re talking about listening to our coworkers or our customers and being able to hear what they have to say. And, and I think marketing like gold is being able to sift through some of that and finding like different things to try. And then you hit home runs. I mean, that’s really how it works.

Tanner:

Yeah. And you hit the nail on the head about trying new things because that’s all you can do. Like, oh, I saw someone doing this cool thing. Let’s give it a go. Sometimes it works. Sometimes it doesn’t, but in the end, that’s what you have to do is just test everything. And eventually you’re going to hit a home run, like you mentioned. So auto-ship cloud, in my opinion, exists to provide a better user experience for the customer in terms of e-commerce. Right? I’d like to specifically talk the meal subscription space you know, like HelloFresh, Blue Apron, because that’s one of the ways that your plugin can really be utilized. So what impact do you think user experience has on these types of businesses?

Matt:

So I think with these and with realistically with anything, I think that user experience is paramount. It’s, really, really the most important thing. I mean, you’re talking about, as an e-commerce business, you want somebody to give you money trust in exchange for product. And if it’s somebody who’s never bought from me before, there’s going to be a lot of fear and a lot of obstacles and hurdles that you’re going to have to overcome and in order to get them to purchase. And if they bought from you before, you need to make that experience useful and positive as well, otherwise they’re going to go to Amazon. That’s how we talked about an auto ship. If you have something that causes friction for a repeat order, you’ve lost your customer to Amazon. So for meal plan sites and for they’re really great at crafting an experience that they have full control over because realistically the business model is actually a lot more complex in some ways, because you’re dealing with perishable goods and you’re dealing with stuff that’s actually fairly expensive to build.

I’ll kind of be more specific. For example, if you’re launching an e-commerce business, reselling jackets, you can, those jackets, if you don’t sell them really well, you can, you can sit on them for a long time. You can try a lot of other ways. You can resell them. There’s a lot of ways to move off inventory. So their risk is kind of diminished for you. You’re talking about harvest meal sites. There’s a, a higher barrier because people are a lot less likely to try a meal site if they’ve never tried it before. If I bought a jacket online, I’m just trying to find a jacket that I like. It’s a totally different kind of problem. So if you need to build an experience where you can overcome objections, you can create trust where you can let somebody know what’s going to happen. This is what you can expect from us. And the cost of acquiring those customers can be a lot higher. And because of that, that means you have to have more sales ongoing in order to recoup your acquisition costs and become and make that customer profitable to you.

Tanner:

Yeah. And I think that’s a good point. A lot of people really overlook the acquisition costs of getting a new customer, and this new subscription model is one of those things where you put a lot of money in, then you’ve got to wait for that customer to pay that monthly fee to get that return investment.

You have to find ways to either do as well as, or better than, Amazon.

Matt:

And so talking about friction points, anything that can be a friction point, if it’s hard to pick your plan, if it’s hard to pause or cancel, if it’s hard to change the frequency, if it’s hard to change the items, if they feel like there’s any kind of like friction at all on that. They’re out there. They’re going there. You know, I don’t need to deal with this. I can just pick up the food in my local grocery store. I mean, Amazon has as educated customers all over the world to expect a certain type of experience, especially when it comes with things that are being delivered. And so you have to find ways to either do as well as, or better than, Amazon. And in what ways you can control and user experience is one of those things. If you can make the buying process a lot more positive, and you can influence that with information and emotion and steps that are kind of like a natural progression from a sales process, then you’re able to kind of do more than just somebody clicking on something and seeing a product page on Amazon or another website.

Tanner:

Yeah. It’s funny. Amazon has really spoiled all of us with how easy it is to buy on there. Right? But one thing that I liked about what Amazon does is they just obsess over the customer. They obsess at making it easy to buy. And that’s why they are one of the biggest companies in the world. Because naturally as a consumer, or as a human being rather, subconsciously we’re trying to talk ourselves out of making a purchase a lot of the time. Right? Unless it’s something that we really need, but I think that happens a lot with these meal subscription sites, because it’s a luxury item. A lot of people, you know, like the idea of it until they see how much it costs.

Matt:

It’s really interesting. I mean, talking about marketing meal sites, it just kind of depends, for some people the value proposition is time savings for some, it is taste of flavor, weight loss. There can be a lot of different reasons why somebody is willing to try it, which is what makes the user experience so important is if I can tailor an experience based on who I think this user is based on what ad they’ve clicked on or what social campaign maybe they’ve clicked on. Or if I can have a kind of a general capture to kind of understand them, a lot of these sites, when you click on them, one that I was just looking at really common is HelloFresh. They’re asking you right away to personalize your plan.

You haven’t even done anything. You hit the site and they say, pick your preference, meat and veggies, veggie family-friendly pescatarian quick and easy calorie smart. So right away, they’re kind of asking for information that you normally don’t get out of another e-commerce site. I might know what kind of product or category they’ve clicked on, but this one I’m getting high intent information right away. So if somebody clicks on calorie smart, and then they select that plan, the next step that HelloFresh requires you to register as a user. So now they’ve got your email and they know what your preferences are. So for them, now they can segment you as a user. Oh, this person is calorie conscious. So we’re going to put them into of our information on calorie saving and losing weight. Right? So that’s powerful, powerful marketing. If you know that somebody is at least interested and what they’re interested in, maybe the reason why now your remarketing and retargeting efforts are going to be that much more powerful. And it might even be the same product. You might even be selling somebody the same box of food, but you’re selling something to somebody because it’s quick and easy versus calorie smart. That’s what’s going to motivate somebody to buy.

Knowing that somebody is serious enough to at least give their email, kind of qualifies them already as a potential customer.

Tanner:

Right. Yeah, at that point you’re just tailoring your messaging towards what they’re looking for rather than benefits of the product. So, what do you think is better, asking the user to register right off the bat or ask them to kind of give segment themselves right off the bat. And do you think that HelloFresh AB tested that and figured out what was best for them?

Matt:

Oh, absolutely. Absolutely. I think you know, like kind of like circling back what we were talking about before, I have ideas on how I would test it if I were starting out. I mean, I mean, one from a marketing perspective, I’m always going to look at what other people are doing and try to kind of reason out why they’re doing it, but there’s a couple things I think that makes it really important. One of them is that getting somebody to give you an email upfront, there’s a part of me that cringes at that, because I liked the idea of just kind of be giveaway as much as you can. And you try to convince people of the value after the fact. So, you know, I try to give away content and other things for free.

I’m not going to qualify that with an email. However, the nice thing about asking for an email up front is you’re actually kind of weeding through people that are just curious. So you know, that at least somebody’s like, you mentioned that reason, we were kind of talking ourselves out of buying something. If somebody isn’t at least interested in the meal side enough to give their email address, then they’re really not that far along in the consideration process, they still may be very top funnel for these meal sites. So knowing that somebody is serious enough to at least give their email, kind of qualifies them already as a potential customer, because, you know, in this day and age, if you give somebody your email, you’re going to get spam, right. You’re going to get all the remarketing stuff out the wazoo. So if you’re willing to kind of like be okay with that at least upfront to find out more about the process and everything you’re, you’re signaling that you’re at least seriously considering a meal plan. And that makes it much easier again, with other actions that they can take and how they frame their website, the rest of their user experience, as well as remarketing efforts.

Tanner:

You know, another interesting thing might be, if you skipped the registration as the first step and ask them to segment themselves, couldn’t you also create a custom audience based on the segment that they chose. And so by not asking for the email right off the bat, you could at least remarket to them.

Matt:

You’re absolutely right. Yeah, no, definitely.

Tanner:

So I mean, what are the disadvantages of each, like asking them for their email, I guess the only disadvantage to that would be that you have everything behind a registration wall and you might lose some people that get offended by that right off the bat, and they might actually be interested, right?

Matt:

Yeah, for sure. I mean, you’re talking about trying to understand different types of users. And so if I’m someone who’s just considering this and you don’t even get my email, you don’t even have the opportunity to address what my barriers to purchase are. Like if I’m concerned about how easy it is to cancel, or whether you have the meals, even just the meals that I would prefer. I might not be willing to do that if you’re asking for an email, there is a tradeoff for sure. And that’s kind of why we circle back to want to test these things. And, honestly, I think that a lot of what they’re doing is crafting custom experiences. So shopping for a meal online is totally different than shopping for anything else.

Because of that, you’re basically right from the gate walking through a signup process. You’re not browsing, you’re walking through a signup process. And on all of these pages, there’s different information that they’re putting out there about savings, about how it works and FAQ’s, and things like that, to try to minimize the friction from each step to the next, but they are really trying to look at it like, hey, you know, we’re not wasting your time and you don’t need to waste ours. Just kind of go through this and see what you need and what you and what questions you have. And a lot of them are always trying to, with the banners and the pop-ups, get this much off your first signup, get 10 free meals, those types of things. They just want you to try it.

Each step has a unique or different set of questions that someone is going to have.

Tanner:

So this question might be a little obvious to anyone that has any marketing experience, but what are the advantages of separating everything out and a step-by-step process rather than just showing them everything right at the beginning?

Matt:

Yeah. Well, I’m not sure it’s necessarily obvious because there’s a couple of things. The first is you certainly don’t want to overwhelm somebody all at once by asking for all this information, like you think about a lot of UX testing centers around how much information to ask for at once that people are willing to give so that they don’t leave. Right? So if you have a 10 step process, you have that much more chance to lose somebody at every step. But if you have everything all on one page, you’re going to just overwhelm a ton of people. Because if they see you see a huge form, it’s like, well, screw this. I’m not going to do this. And it kind of lends a lot of like power and credence to the idea of Apple Pay and Amazon Pay where I know that I can store my payment and shipping and billing information all within this app.

And if I want to order something and they have that available, I can click it and then it’s done, right? So it’s definitely a powerful process. But one of the things that you might take for granted is something I mentioned kind of earlier, which is each step has a unique or different set of questions that, that someone is going to have. So for example, like looking at hello fresh is again, when they’re asking you to select a plan, they’re looking, they’re highlighting the actual meal types that are available for April 17th, April 23rd. If you’re looking at this for ordering and the next week. So if you’re thinking about what kind of food is available, they’re telling you what kind of food is available on the address page. They’re going to be overcoming what shipping and delivery looks like and check out how easy it is to pause or cancel. So every step they’re allowed to then kind of be a little bit more specific with their UX and user experience to overcome what barriers you might have, that’s associated with that kind of type, which is kind of a way to counter some of that friction that we talked about, but also a really powerful way to kind of like walk people through the experience.

Tanner:

Yeah. And, you know, even if it’s just a contact form and you know, the checkout registration process, you know, giving it in micro pieces is always the best way to do it. Right? And also asking for the most, it’s a good way to put the most sensitive information at the end, rather than the beginning. Because naturally for some reason, I’m sure there’s studies on this, but when someone is filling out a form, if you start with the easy stuff that they don’t really care about as they go through, step-by-step there, they’re invested at that point and they’re more likely to finish the process.

Matt:

No, it’s a great point. Yeah. And that’s why, like, even looking at somebody like HelloFresh, they’re putting the select meals even after the checkout. So you’re going through that whole process of kind of registering yourself as a user and putting all their information to get to do the fun stuff, which is pick your meals.

And in all marketing, all walks of life, the more targeted you can be, the more successful.

Tanner:

So, Matt, what would you say your secrets to scale are?

Matt:

Yeah, for me, I think any e-commerce or B2B kind of all comes down to the same thing, which is understanding why somebody wants to buy from you. So you’re talking about a new business, you got to try to survey people and figure that out. If you’re talking about an established business where you have customers and purchase, really, it comes down to figuring out why somebody chose you and why somebody continues to choose you. I believe that even if you can identify one thing that seems extremely unique, that you will then be able to use that to find hundreds or thousands, maybe even more than that, of customers, because if somebody has that problem and you were able to solve it for that person, you’ll be able to find other people that way. And in all marketing, all walks of life, the more targeted you can be, you can be more successful because we live in a world with so much messaging, so many ads, so many posts.

I can’t tell you how many ads I see every day where it’s just, very blank statements. But if I can say to somebody, hey, if you’re trying to build muscle while on keto, you should try out this meal plan because our consumers gained 3% body mass on muscle using our diet plan. So that might miss some people because not everybody’s trying to build muscle while they’re still on keto, but being able as an example, to be that stat specific means somebody who’s trying to do that is going to be a lot more likely to pay attention to your ad. And as you figure that out and you capture more and more of those customers, actually, it becomes easier to capture customers because you’re being really, really specific. And you’re not wasting time by trying to grab everybody. But I think what some of the beauty is if you think about the last time you looked at an ad, even if you’re just adjacent to that problem, and it’s really specific consumers, B2B, or B2C, or that much more likely to want to interact with your brand, because you’re speaking about something really specific that they understand, and it might not be their exact problem, but it’s similar.

And so now they want to learn more. And I think that’s really the secret that I’ve employed and that I am employing, is knowing why people like something, why they want my service. And just to be specific with us, you mentioned WooCommerce subscriptions, a lot of our customers, the majority of our customers come from that solution. And so we know why they don’t like it. We know why they’re frustrated with it and why they love us because of what we solve for them. So in my marketing, it’s really basic stuff where I just say, Hey, are you tired about multiple plug-ins? Are you tired about having a up manual subscriptions on the software? Like you don’t have to do that with us and somebody that, and the ultimate reason why that’s effective is because our best customers appreciate that. We do that. And so I’m speaking to a problem that I know our existing customers appreciate. So I know that anybody who comes to us because of that’s how I’m talking, it’s going to stick with us and appreciate what we do, and we’re going to have a mutually beneficial relationship.

Tanner:

Yeah. I really, I really love that. I think you really hit the nail on the head in terms of scaling a business and understanding your customer, right? I’d like to just add onto that a little bit. It’s not going to be applicable to every company out there, but you know, if you’re a marketer and you have a sales team, you should be communicating with the sales team, understanding what the customers are asking. What are they not understanding about the marketing messages and use that to craft even more powerful marketing messages?

Matt:

Absolutely. If you have, if you’re working at a company where you have the luxury of having a sales team, I don’t have one right now and I can looking forward to kind of growing into that really they’re in the trenches or talking to customers day in, day out. And it may be even more so than why somebody chooses you, why somebody is not choosing you, right? Like if you’re getting messages from your sales team that, oh, well, they don’t think we can do this. Or they don’t think we’re reliable or, oh, they think this other solution will be better. Well, there’s all the copy you need for new ad campaigns and websites, sales letters about, hey, we do this and hey, we’re better than this. And I say that, but realistically, the way I like talking and marketing is, very emotion, very customer centric. So if you’re trying to do this, or if you’re struggling with this, like you should consider our solution because we can help make your life easier. We can do this for you. I’m talking to about people in the context of their problem or the solution that they’re trying to find is a, I think a really powerful marketing technique.

Tanner:

Yeah. I agree with that. And I think it really comes down to speaking directly to them and talking about them and putting them in the spotlight rather than talking about how great your product or your company is. Because at the end of the day, they don’t really care about your brand or your project. All they care about is getting a solution for their problem. And so, Matt, I want to thank you for taking the time to do this interview. Is there anything that I have not asked you that you think might benefit the audience?

Matt:

I think the only thing Tanner is right now it’s really common for people starting an e-commerce business to look at Shopify. Shopify has a lot of really great marketing tools. One of the things that I think a lot of people get frustrated by Shopify is the inability to customize. And if you’re looking at moving to WooCommerce or Magento or another platform, it can be really, really scary to think, well, I can’t figure all that stuff out. And so that’s why, you know, we talk about there’s a lot of solutions out there that can make things easier. And then ultimately if you’re looking at a specific business use, that’s why you should be evaluating platforms. And so we love WooCommerce because of its customization and the ability to develop customized repeat delivery programs using the auto-ship cloud plugin.

But that’s not to say that there’s not a reason why someone should be on Shopify or another platform. I think as a business owner, you should just always be considering the factors and reasons and talk to more than one person. If you meet anybody who tells you absolutely you should be doing something, you should definitely get a second opinion. But I think that’s really kind of the only other thing is that it is possible. That’s one of the things we’re trying to educate people on is that you can create sites that are more customizable and more flexible on your user experience than what you think you can. And I’d like to just add to that, Shopify is a great, or if you want to be stuck inside a box, right. And others say you can’t go outside of that box, but going outside of that box is going to require a lot of development dollars. And then you’re going to have to keep those developers around, make any changes that you want. I’m a big believer in WordPress and commerce, and I’ve personally used the auto-ship cloud plug-in and I absolutely love it. So everyone go check that out.

Tanner:

That’s great. So, Matt, what’s a great way for anyone listening to get in contact with you.

Matt:

Sure. I’m very active on LinkedIn. So Matthew Holman, or you can hit me up on Twitter. So at NPH Running.

Tanner:

Awesome. And we’ll make sure to link that up in the show notes anyways. Thank you again.

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