The Future of DTC

Hi Readers!

An exciting week here. Nice weather, stellar energy, I feel like my brain has finally resettled after all the travel. It feels good to be centered and back at it again.

Some exciting updates before we get into this week's newsie on the future of commerce and how CX relates to it:

1.Really stoked that we hit 2,000 lovely readers on this newsie. I am truly excited to continue building an audience of builders and operators passionate about all things customer, and I am beyond thankful for this week’s sponsor, Gorgias.

For Q3 only, Gorgias is offering to buy out any Zendesk contract to celebrate becoming the #1 Shopify Helpdesk. Gorgias supports over 10k Shopify brands like Princess Polly, Absolute Collagen, Shinesty, and of course JRB.

Gorgias is not only the #1 helpdesk by installs, but is also the highest rated Shopify Helpdesk. Gorgias has 4.4 stars (500+ Shopify App reviews) vs. Zendesk 3.3 stars (150 reviews).

Why?

Because CX agents respond 30% faster on Gorgias (4.8hrs) vs. Zendesk (6.36hrs), and Gorgias doesn't charge for onboarding, # of seats, or require brands to invest in technical resources to configure the fundamental CX playbook of a modern brand.

If you want to level up your CX toolkit before the holidays click here.

2. In the last 3 years, I’ve met hundreds of amazing CX'ers in the startup universe. From CPG to SaaS to Fintech, it’s been so inspiring meeting leaders and founders from all over the globe, each with their own incredible CX stories to share.

I’d love to start featuring some of them. At the end of each upcoming newsie, I’ll be highlighting my fav CPG brands that have been putting CX first and asking them 2 simple questions.

What’s your philosophy on CX?What’s your fav CX story?You'll see the first one at the end of this newsie, and it's one of my fav brands. 😍

3. Third, Cody and I finally had a chance to sit down with our very own Joanne Coffey, legendary retention marketer at JRB, to chat all things retention, email, and SMS on the DTC podcast, and we would love it if y’all took a listen. It's been one of my favorite retention conversations ever.

Spotify | Apple Podcasts

4. Lastly, if you like what I share on CX and are looking for a leg up on all things marketing, I highly recommend checking out Cody’s newsletter here. Cody is a revolutionary brand and performance marketer, and the CMO at Jones Road Beauty. His intentionality around the customer is second to none, and he truly thinks differently.

Join the thousands of marketers getting Cody's weekly insights: Sign Up

Now, let’s get right into it.

There’s been a ton of talk about the economy lately. Call it an economic downturn, a recession, a bear market, crypto winter, it does not matter. What matters is that the gangbusters growth of the last few glory years of DTC might start slowing down, if it has not already.

The good old Facebook arbitrage where you can slap on a label on a white-labeled product or dropship your way to the Three Commas Club is slowly starting to wash away, and we are entering this new uncertain, and scary phase. It’s quite bizarre.

You now need this thing called “brand” and these mythical “loyal customers” in order to build something sustainable. 🤣

What does that mean to you? Well, I’m not here to scare anyone, but I am here to forecast a bit as to what that means for CX, CX teams, and brands in general.

*grabs crystal ball*

Customer Experience has come a long way over the last 20 years. Remember when Zappos launched as a shoe company that would focus on great customer experiences? It sounded overly idealistic at best and absurd at worst when Tony Hsieh started it. (If you have not yet read Tony’s book “Delivering Happiness”, it’s a must-read. The best $12 you’ll spend this year.)

Even a decade into it, when they were purchased by Amazon for $1.2 billion dollars, folks still questioned whether it was a wise acquisition—how CX can be a core differentiation worth over a billion dollars. (Remember, this closed in November 2009. Bitcoin had just launched in January of that year, and a billion dollars was still real money.)

But hey, customers voted with their wallets. They chose to pay a few bucks more than Famous Footwear or DSW for excellent customer support if something went wrong, as well as for the perks and benefits of the Zappos loyalty program.

Fun fact, I found out that they had a VIP program to get free next-day delivery on every order, and I politely asked to be added to it a decade ago… It’s still my fav way of buying shoes.

Zappos proved that CX is indeed a brand-building tool, and a key market differentiator, even as a shoe marketplace.

Chewy is another great example of a brand that innovated and created a successful brand by focusing on the customer. While they sell the same pet food as many other brands, their CX and compassion for customers is a key differentiator, and it’s paid off.

Stories like this are in the news all the time, and it’s done wonders for them as a brand.

They have built lifelong brand evangelists with a very simple brand premise: giving a shit.

Sidebar: did you know you can get a job as a Chewy card writer? Yup, you can.

As the economy tightens, I strongly think customers will take one of 3 routes when it comes to purchasing and the brands they are loyal to.

1. Zero Friction: Brands that offer them a simple way to get essentials with zero-to-limited friction, at a competitive price (think Amazon, Walmart, Target etc.)

2. Values: Brands that align with their values (seeing this even more with Gen-z shoppers—think Patagonia, Parade, Ben & Jerry's etc). Social mission has become increasingly important to consumers, especially the younger generation.

3. Loyalty: Brands that have gained their loyalty and hold a space in their heart and wallet.

Many of the aggressively expensive, extravagant, and excessive purchases will take a backseat to the purchases that scratch the itch a bit higher on the hierarchy of needs.

Do you need a $75 olive oil or $6 bev? Idk maybe, but probably not. Will you still be purchasing from brands that you feel strongly connected to and feel have your back? I’m going to say yes.

But hang on. Before I start ranting about bougie CPG brands not putting enough of a focus on CX, let’s talk about what great brand-building CX even looks like.

A. Proactive Customer-Focused Communication: In my opinion, creating a great “CX-focused brand” is putting a focus on the way you perform when customers aren't all over your Facebook page saying “wtf, why is this delayed?”

It's the proactive stuff. It’s reaching out to customers when their order is delayed before they complain, surprising them by responding in record time when they have any questions, and ultimately, treating them how you’d like to be treated (the Golden Rule).

B. Elevating the Voice of the Customer: We often talk about how important talking to (and listening to) the customer is, but most businesses have not added this as a core part of their workflows.

I.e., When you are talking product, marketing messaging, ops, etc, making sure your customer has a “seat at the table” is more important than ever. It’s remarkable how many “hot” companies miss on very basic CX cues by not asking this very simple question: What would the customer say?

The greatest part about having an engaged CX team is that you quite literally have customer insights wherever you turn, just make sure the CX team has a seat at the table during these important conversations.

C. Customer-Centric Policy: I probably complain about this way too often and probably more than I should, but it’s pretty wild to see how many brands have adopted customer-unfriendly policies over the last year or two. From return policies to missing package policies, customers have taken a back seat to process and profits, and I think brands will need to reform those policies as customers prioritize their spending.

Some pretty awful policies I have seen lately:

• Brands allowing returns but not making any mention of the kinda relevant caveat that they’ll only refund store credit.

• Brands not taking accountability for missing packages unless you pay for “premium shipping insurance.”

As customer wallets shrink, I strongly believe customers will choose to shop with brands that put them first. Putting the customer first is great for both customers and brands, it just takes brands longer to see that LTV win. 😏

D. Shrinking CX Teams: As much as I hope CX teams won’t shrink before any other teams do, I do think teams will shrink in general, and CX teams will need to do more with fewer resources.

What does that look like in a practical sense? More thoughtful automation with tools like Gorgias, Wonderment, and the like. CX teams will have to get crafty in scaling special customer moments and automating lots of other basic responses etc.

The gist of it is quite simple: Nice to have will go before “need to have.” Need to have brands will be the bare and basic necessities for some, and for others it’ll be the brands that they feel deeply connected to and cared for by.

Don’t wait until then. Start caring for your customers now.

In today’s first segment of CX chronicles, I’d love to share my quick 2 question interview with Jonny from Huron — my favorite men’s personal care brand. Jonny leads all things strategy and retention, as well as CX. (My personal top two fav collections are Hair and Skin 🥰)

What's your philosophy on CX?

At Huron, CX has always been at the central core of our business. One of the reasons I joined Huron as the first employee was because I was excited for the opportunity to directly chat with our customers as we started and gather their feedback as we strategized and scaled the brand.

We're able to address points of friction in real-time, and we also have the opportunity to go well above and beyond what a customer may be accustomed to for "typical CX." We also incorporate proactive CX tactics as in the CX story highlighted below.

Our goal is to have any customer come out of their interaction with our products and/or CX team delightfully surprised, as the best way for them to remember us is by how we were able to make them feel (in addition to smelling fresh & clean).

Every week, we'll share our best customer reviews and CX wins with the entire Huron team, which really gets everyone fired up and excited. This also means sharing the most insightful feedback as well, so we can continue to improve the product and overall customer experience.

Whenever we run any initiatives, particularly around retention, instead of just looking at a bunch of numbers and ROI, we'll also highlight some individual customer journeys to the team (e.g.: Matt from Ohio first tried our Shower Kit and 27 days later he subscribed to the Jumbo Shower Kit, he also left a 5-star review). This further humanizes the way we look at customers impacted by our strategies and ensures that they always have proper input.

What's your favorite Huron CX story?

We have a few great and memorable CX wins that the team is proud of. For some context, we set up a Shopify Flow notification email so the team gets an alert every time an order is placed over a certain amount, for a city that we are familiar with (e.g.: our hometowns growing up, college towns, and of course NYC where our HQ is located).

We leverage these notifications to then personally reach out and thank new customers and to see if we're able to learn a bit more about their story leading up to trying Huron.

A recent win that comes to mind from earlier in the year was a large order received for 5 kits, from a customer that lived 3 blocks down the road in my own neighborhood! We reached out and threw in a free Huron t-shirt for the large order and also learned that these kits were groomsmen gifts for the customer's upcoming wedding.

We purchased an item off his wedding registry as a surprise and a few weeks later we got an amazing handwritten thank-you note delivered to our office. It's common to hear of brands including handwritten notes to customers, but how often do you hear about a customer writing a thank-you note to a brand after an order?

I keep this note at my desk right below my monitor, so we're reminded daily about the opportunity to delight every customer to that level (and beyond).

Special discount code: NEWSIE25 for 25% off a non-subscription order.

That’s it for this week!

Again, special thanks to our sponsor Gorgias for supporting the newsie, and I look forward to seeing you next week.

Before you go, what topics would you like to see me cover in the future?

Please drop a reply, it means the world.

Eli 💛