May 24, 2024 • 46 mins
Gordon and Ger are joined by Shane Linehan, VP Marketing with Raylo, to talk about the circular economy and electronic consumer goods.
Shane talks about unlocking huge residual value for customers (and revenue for businesses). He also discusses launching an unknown brand with an unknown offering—one that now has 100,000+ paying subscribers.
The boys talk customer funnel analysis, customer acquisition costs and life after cookies.
And you'll find out the answer to the big question, 'Where is Gordon?'
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:01):
This is Functional & Fabulous, the omnichannel podcast where we unbox tales of online retail and digital transformation.
In this episode, Ger asks the tough questions...
Hey, how about we watch a bit of Netflix and maybe have a bit of Irish?
Our guest understandably forgets the question...
(00:22):
I've forgotten the question.
Gordon forgets our guest...
So one of the things I really enjoyed talking to Sean about there... he's not called Sean.
Ger doesn't say what you think you hear...
I can hear that you're trying to make a verb out of it, which is always a cunning stunt.
(00:42):
Gordon searches for the right word...
And do you see things like customers renting multiple, or leasing multiple, or Raylo-ing multiple products from you?
And our guest gives the best episode hook ever...
This is something I think marketers should be talking about more than AI.
This episode of Functional & Fabulous is brought to you with pride by StudioForty9, retail ecommerce experts, omnichannel growth consultants and cut-through performance marketing specialists.
(01:13):
StudioForty9, where your digital retail success is built.
Hello, and you're very welcome to another episode of Functional & Fabulous.
Today, we're delighted to welcome Shane Linehan from Raylo.
Shane describes himself as a hands-on marketing director with over 10 years' experience growing both startup and established tech businesses.
He worked originally in the events industry in Dublin for five years before moving to the UK to work in the financial services sector, where he got a taste of how large marketing functions work, which is to say, large scale, large budget, and very slowly.
(01:48):
Following his time there, and with some great experience in the more strategic side of marketing, he was keen to get back to startups and bring his knowledge to bear in that environment.
He met the guys at Raylo who were looking for a growth director, and the rest was history.
Shane, it's great to have you here today.
Yeah, it's great to be here.
Thanks for having me.
Not at all.
Hey Shane, welcome to the podcast.
Thanks, Gordon.
(02:09):
So I suppose to start with, Raylo, the overall concept is probably not one that our audiences are overly familiar with.
Do you want to tell us a little bit about the business?
Sure.
So Raylo's mission is to change how people access and enjoy devices like phones, laptops, consoles, and so on.
(02:32):
And we do this by offering these types of devices on a subscription.
The subscription has three main benefits for the customer.
Number one is value.
So right now, you can go to Raylo.com, you can get a brand new in the box iPhone 15, get it on a 12-month subscription, and over the 12 months, you'll only pay around 50% of the retail price.
(02:57):
The second is flexibility.
We also offer devices on monthly rolling cancel-anytime subscriptions.
That means you could get a PlayStation 5, play your favorite game, use and pay for as many months as you like, and simply return it when you're done.
The third, very important, is sustainability.
(03:18):
So we've built a fully circular model of refurb, reuse and recycle.
This means no Raylo devices ever go to landfill, and it's a far more sustainable way for consumers to get their tech.
So in terms of traction, so I joined Raylo at the very start back in 2019.
(03:38):
We've grown the business to 100,000 subscribers.
We're a £30 million annual recurring revenue business.
We've grown 40x in the past three years, and we have an industry-leading Trust Pilot score of 4.5 across 10,000 reviews, which we recently hit and we're very proud of.
(03:59):
And those are some magnificent stats, Shane.
I suppose one of the things that really attracted me to the whole idea that Raylo has is this concept of unlocking the residual value in a piece of hardware.
It's kind of a very elegant idea, but also somewhat hard to get your head around.
Can you explain a little bit where that came from originally?
(04:19):
Who had the idea?
Where they came up with it?
Yeah, so it was Carl, our CEO.
I think he was straddled with a drawer full of devices, as most people have.
Like literally, most people in the UK have a drawer full of devices.
And he couldn't get it out of his head that there must be so much value worth of devices, sitting in these drawers.
(04:43):
And residual value is a core part of what drives our pricing engine.
So our pricing engine really is driven by a circular economy of really maximizing the residual value and maximizing the use of the device.
What does that actually mean?
That means that our devices get used by multiple consumers for the maximum useful life of the device.
(05:10):
We then pass those savings back to the consumer.
And as I mentioned earlier, the ability to get a new iPhone 15, say, for 50% of the retail price, that's all driven by utilising this residual device model or residual value model.
Yeah, it's really, yeah, it's quite interesting because I suppose, I mean, everybody does have that drawer full of old iPhones, which they usually hold on to in the anticipation that maybe a child will want it at some stage.
(05:41):
And they're very hard to let go because you've paid a lot for them in the first place.
You know how much you paid for them.
You want to upgrade, but you're definitely not ready to throw it out.
The device often still works.
But at the same time, you're kind of in that mindset that you're not going to be able to sell it for very much either because the secondary market mightn't be very good.
(06:04):
Definitely the trade-in values that you get sometimes, I know certainly I've been looking at trading in, let's say, old MacBook Pros back to the original manufacturer.
And the actual value that you'll get for your trade-in is so pathetic, you'd prefer to nearly hang it on a wall than actually hand it back.
So what Raylo is doing in a nutshell is allowing customers to buy an item or have an item at a fraction of the cost and kind of pay as they use it and then hand it back.
(06:34):
And then Raylo is able to get the residual value out of it, the rest of the lifespan of the item and reuse it in that kind of sense.
So it's nearly the best of all worlds from a consumer point of view.
Exactly.
I mean, we've always been very focused on what consumers need and want.
And I think the reality of electronic waste is that only 20% of e-waste is properly recycled.
(07:03):
That's like imagining 80% of your neighbors going to their drawers full of devices and dumping that into their general waste bin.
No one actually wants to do that, right?
But it is what inadvertently happens because people sit on these devices for so long, they become worthless and they don't know what to do with them.
(07:23):
And to put this in perspective... Go ahead, Gordon?
I was going to say, what is the useful lifespan of a device?
So Apple and Samsung, if you look at their flagship phones is probably a good example device because they tend to have a quick upgrade cycle, quicker than laptops or tablets, say.
(07:50):
The average upgrade cycle on a phone in the UK is 27 months.
However, the average useful life of, say, an iPhone or a Samsung Galaxy is five or even seven years.
This is proven really by, if you look at the second-hand market, you'll still find iPhone 7 and iPhone 8 trading and being bought in the market.
(08:17):
And these devices still function, still work.
The refurbishment processes have improved so much that you can really maximize the lifespan of a device.
There's also things like battery replacement that can really extend it to its absolute maximum.
Yeah, so basically you buy an item, maybe for a grand.
(08:42):
It's useful for six years or more, but you use it for like 27, for the bones of two years.
So you're only getting 30% of the value out of it, but you've paid for the whole amount.
And what Raylo is doing is unlocking the rest of that there.
You operate on a kind of nearly a pay-as-you-use type policy.
So what happens then after that?
You know, I've been using the device for two years.
(09:04):
What am I doing with it?
Am I sending it back?
What happens next?
So we focus on incentivising customers to upgrade.
So upgrading is free.
And because our pricing model has only improved over time, often the new device is a similar price or even a better price than the old device was.
(09:24):
So a customer chooses to...
We notify the customer that they're due an upgrade.
They go to their Raylo account.
They simply select the device they want to upgrade to.
We send it out to them.
They then have 14 days to transfer their data across, return the old device.
They can do that via their courier of choice.
(09:48):
And no, you don't need to print a return label.
That's all gone now.
So you simply select your courier of choice or you go to your nearest post office.
The device then goes to our returns partner, Ingram.
Ingram are device refurbishment specialists.
They properly refurbish the devices, remove any data that might be on them.
(10:10):
And then what's amazing is those devices can then go back out to consumers who've chosen to lease a refurbished device in just five days.
And that really is critical in terms of...
We speak about residual values.
The quick turnaround is critical.
An iPhone 14 today and an iPhone 14 in six months or even three months, the values are different.
(10:35):
So to be able to turn devices around in five days from when it lands at Ingram to going out to another customer is something we're really happy with.
That's great, Shane.
I think one of the things this kind of reminds me of, and I'm probably showing off my age a little bit here, is the Radio Rentals kind of model that would have been around, I suppose, in the 80s and 90s.
(11:00):
But that meant that consumers were paying inflated prices to lease, effectively lease to buy TVs.
And one of the things I think is really interesting is that the consumer actually is going to pay less if they're using this rental model than they would do in a typical upgrade cycle.
(11:23):
And that's very switched on.
Has that been key to your messaging within your marketing?
Or how have you positioned this so that consumers see the real value?
Yeah, so I think what's interesting about Raylo is, we've built this new type of payment platform.
(11:43):
And really what that unlocks is this all-important circular economy for devices, which aims to completely eradicate e-waste.
But that's not actually the point we lead with.
The value for the customer really starts with amazing pricing, never before seen flexibility and amazing customer service.
(12:09):
And I think if you can't give people these great fundamentals, it doesn't matter how sustainable the end product is.
And frankly, I think consumers get shafted when they go to make more eco-friendly buying decisions.
You know, you want to buy better welfare meat, organic fruit and veg.
You want to buy an electric car, more eco-friendly white goods.
(12:34):
You're going to pay a price.
So that immediately creates barriers to entry.
Also for businesses, all that does is give you a smaller addressable market.
So I think if we want to see real change, we believe businesses need to make products more attractive in terms of access.
That means price, if they want to drive real change.
(12:55):
And so actually it's the great price, flexibility, customer service, actually, that we actually lead with as a means of getting consumers in.
And the great benefit is this circular economy and reduction of e-waste.
Sounds great.
I think it makes an awful lot of sense.
I continuously see, you know, some really interesting new approaches.
(13:21):
The likes of, I think we were talking about, Rockar, the business that is selling cars, basically.
So you can buy a car on a monthly subscription plan and that sort of thing.
And it starts to change how things operate.
But am I right in kind of understanding that, like, the financial services element that Raylo provides is one of the key unlocks for the business?
(13:47):
Is it kind of like, let's say, a variation on a financial service with an ecommerce front end?
Yeah, so how we describe it really is, or how we think about it is, it's really an ecommerce fintech hybrid.
And I think the innovation in creating this new category of payments is what makes Raylo truly unique.
(14:08):
And that's made up of a number of different components and moving parts.
And first would be this piece, which is circular economy driven pricing.
So as we've talked about, we get devices back.
We maximize the useful life of them.
We pass those savings on to consumers.
We can offer devices at these amazing prices.
(14:31):
Second is cutting-edge risk models.
So we've developed our own AI and machine learning-driven underwriting models.
And these pull data from a number of different sources, including open banking.
And this is specifically to manage this higher-value category of goods.
(14:56):
And really what that does is, it means we can offer devices on subscription to the vast majority of the population, and probably even more than traditional finance businesses can.
Then on the front end, we've got, you know, if you go to Raylo.com, you'll find a pretty slick front end.
You'll find all of our ecommerce brilliant basics.
(15:19):
You can easily browse, easily sign up.
And it's really these things in combination and that make it a, this, you know, fintech ecommerce hybrids.
And I think that's what makes Raylo truly unique.
It's a pretty special proposition and something that's new and very fresh.
And it's got this huge growth story sitting behind it.
(15:42):
So I think you mentioned there, you've had a 40X growth curve, which is enormous.
So can you talk us through a little bit about how you've packaged the proposition and how that growth has been delivered?
Like, where is it coming from?
Sure.
So, you know, the business has changed and evolved quite a bit over time.
(16:06):
Really though, we've always focused on exceeding consumer need.
And we always try and put the customer first.
In fact, it's one of our company values.
And this has enabled us to evolve the products, to deliver a larger and larger and larger addressable audience, higher conversion rates, and greater brand awareness.
(16:28):
Some key changes obviously have been to our pricing engine.
That gives us more mass market appeal and also drives these higher conversion rates.
We've expanded into new product categories like consoles and wearables.
These are high demand categories that have mass market demand, mass market appeal.
(16:50):
We've also partnered with Channel 4 recently.
And that's about, again, taking Raylo brand awareness up a notch, I guess.
And I think if you zoom out, though, really across all areas of the business, you know, products, engineering, customer service, credit risk, we vastly improved every area of what we've done.
(17:18):
And I think what's exciting about it is there's just so much upside ahead of us.
That's great.
And do you see things like customers renting multiple, or leasing multiple, or Raylo-ing multiple products from you?
And do you see those customers referring to other customers or other potential customers?
(17:41):
So on referral, this is, you know, a really important part of what we do.
And we know that from speaking with our customers, you know, almost half of our customer base actively use a referral friend, actively tell their friends about Raylo.
And it's an insight that consistently comes up in doing customer research or just speaking with customers.
(18:03):
So many of our customers say, oh, my neighbor told me about you or my cousin told me about you, et cetera.
In terms of multiple devices, so I think we've done a great job at nailing upgrades.
So 90% of our customer base upgrades to another device that massively beats industry trends or industry averages, which are about 30%.
(18:29):
And yes, we see, but not only that, we see customers take, you know, they might come in and take a phone on day one, you know, a month later, they might also take a PS5 or they might decide to set up their own business.
They might decide to take a laptop.
So I think additional devices, multiple devices has been a key lever and a huge success, part of the success story in our growth, for sure.
(18:59):
When you started out, so back in 2019, you had a kind of a, you had a couple of different challenges as a marketing director.
Like the first obviously is you've got a new brand, Raylo.
It doesn't really mean anything.
So you've got to get the brand awareness going.
I can hear that you're trying to make a verb out of it, which is always a cunning stunt.
(19:22):
But also you've got the education piece, I suppose, to explain to people what it is that you do, what your proposition is.
And it is kind of complex.
So how did you guys go about that and how did you kind of address that as the marketing and the growth director?
Yeah, it's been a challenge, for sure.
I mean, from in the early days, we really made sure that we focused on brilliant basics in terms of getting people through the website and converting at a rate that worked for us.
(20:00):
I think a complexity that we had was we have a largely custom front end.
So we weren't afforded the luxuries that will come with, say, a Shopify checkout of high conversion rates.
We had to work really hard to give ourselves high conversion rates.
(20:21):
And myself and our chief product officer, you know, we ran the A-B testing and the conversion rate optimization program in the early days.
A lot of that was focused around trust, and ensuring people were clear and comfortable and convinced on the proposition and the business.
I think achieving a doubling of the conversion rate from site land to order complete is something that we were, and I guess still are, extremely proud of.
(20:53):
What were your main learnings there?
You know, A-B testing, it's something people talk about an awful lot.
It can be incredibly frustrating as well because, you know, it takes quite a bit of effort, quite a bit of creativity, and sometimes you get very, very slim to notional differences between the tests.
So from your point of view, what were the big and interesting kind of conversion hacks that you put in place there?
(21:20):
I think what a lot of people can skim over is how critical a good data platform is.
So from the very start, you know, being data-driven, it has been absolutely key to what we do at Raylo, and giving ourselves a really great data infrastructure has been the backbone of how we've been able to A-B test.
(21:44):
Like, it doesn't matter what you're testing, right?
If the data isn't robust, it's going to be really, really hard to actually understand what you're doing.
I think A-B testing, we've always based it on as much consumer insight that we can.
That means running consumer insights, speaking with customers who might have dropped off in the process.
(22:08):
Often, it's the basics.
It's the really simple stuff that can drive massive upside.
I find it fascinating how nailing the brilliant basics like load times, next-day delivery, filtering, et cetera, can make such a difference.
In terms of specifically A-B testing, I think having robust data infrastructure, having a robust view on your funnel, you know, X amount of traffic lands on your website, and you have a CAC of £30.
(22:40):
Something happens in the middle, right?
There's drop-off.
And understanding what causes those people to drop off in any ways you can, as I say, surveys, phone calls, et cetera.
And I think it's just really, really important.
Customer success were a massive help to us in the early days because they were actively on Intercom, actively speaking to customers and figuring out where they were dropping off.
(23:05):
I would say it'll be different for every business.
It's one of the questions I was going to ask.
The tech stack that you used, a nice little shout out for the Intercom boys.
What else did you use?
I suppose in particular, I guess, in terms of the data platform, how early were you able to design that?
And what kind of, you know, I presume from day one, that was like an iterative design process.
(23:28):
And did you change tech stacks in the meantime?
Well, I think I'm lucky in that our co-founders are, you know, very much drivers of, you know, using data to make decisions.
And from where I sit, I feel really lucky in that.
A lot of it's just sort of happened.
(23:49):
We just happen to have a great data platform.
I'm not too in the detail of it.
But for example, I know, you know, how we collect data, how we structure a transaction.
The data that we collect upon collecting or logging that transaction can be caught in many different ways.
(24:10):
It can be easily surfaced.
We've also done a lot of work on integrating marketing with credit risk.
So the business I previously worked in was a consumer lending business.
And I always felt there was such a wealth of data in consumer credit that could be leveraged in marketing.
And I'm really proud that we've managed to do that at Raylo.
(24:33):
Another big area of focus for us has been on conversion APIs.
And this is something I think marketers should be talking about more than AI.
Because it is, I think, more of a burning challenge and something that I think needs proper deep diving on for marketing directors and for heads of marketing within businesses.
(24:59):
I think out-of-the-box platforms, unless you're on a Shopify or something out of the box, I think it's a really complex area.
And let's face it, right?
Let's say you're a data engineer over at, I don't know, HSBC, and you crack conversion APIs for that business.
You're not going to write a blog post about it because it was probably loads of work and it probably is IP.
(25:23):
I think if businesses want to get it right, marketing directors, heads of marketing have to own it.
I'm not a marketing person.
Tell me.
API always gets me excited, but I don't know what a conversion API is.
So with the phasing out of cookies, the way ad tracking traditionally worked was you'd click on, say, a Google Ad, you'd land on the website, you'd be cookied.
(25:50):
That would then track you through to a thank you page.
Thank you for ordering.
The pixel or the cookie would then fire as a transaction, and that will be passed back to the ad platform via cookies or via a pixel.
Same thing, really.
Now that's all being phased out.
So now what you need to do is send that information, that data via what's called...
(26:16):
I've heard people call them CAPIs,
I don't like that.
I still call them conversion API.
It's now sent via a conversion API to the ad platforms.
Web tracking generally is really complicated.
I only hear the complaints at the moment because there's many of them.
(26:37):
I was going to jump in and say obviously we went very functional for a second there.
One of the points I wanted to pick up on was actually if we can rewind a little to A-B testing.
One of the things I think is really interesting is that you've got this convergence of the data from your conversion APIs, from your web tracking and how people are getting through the funnel.
(27:03):
Then you've layered this over with the conversations that you've been having with customers.
It's something that we talk about quite a lot to people, is that the data on its own doesn't necessarily tell the full story without some of that customer colour that you can only get from qualitative research, or actually quality conversations with customers.
(27:31):
If you're working with your team there in customer success, how would you identify the themes of the things that you wanted to change or that you wanted to address?
Yeah, so first of all, I'd actually take a step back and zoom out a little bit from that, and really understand what's the goal of the business and what are the actual objectives that you're trying to achieve?
(27:59):
I think we live in an age where, well, we do live in an age where getting your hands on data has never been easier, right?
And speaking with customers, again, it's probably never been easier for online businesses.
And I think that in itself can cause problems.
(28:19):
I think you have to be laser focused on what you're actually trying to achieve.
Are you trying to achieve better conversion rates through your website?
Are you trying to achieve lower CAC?
Those could be quite different, right?
You could say to me, well, if I achieve a better conversion rate, I'll achieve a lower CAC.
(28:40):
But the problem could also be upper funnel.
It could be proposition, which unless that changes, the conversion rate is always going to be an issue.
So I think starting out with understanding what the objective is or what the objectives might be is critical and going from there.
For example, right?
(29:00):
If your hypothesis is that your proposition is falling short, like your question to customer success needs to be just that.
How do customers describe...?
Like, are there parts of the process that customers don't understand?
As opposed to, we've noticed loads of customers drop off because we ask them for their phone number.
(29:28):
Can we remove phone number?
Do we need it?
Can we make it optional?
They're very different things.
Yeah, there's different ways of probing for qualitative data on both of those.
So I think that's really important.
So if we've got a befuddled and confused head of ecommerce that's sitting there at the moment going, right, where do I start if I'm going to unpick some of the challenges I've got driving growth in the business?
(30:01):
Because that tends to be most people's objectives.
How would you then, how would you advise them to unpick that puzzle?
Because as you said, one question of, do we really need a phone number is very, very different to, do you understand the core proposition?
(30:23):
So what I would do is I would build in Excel an end-to-end funnel of the website.
So site land through to conversion.
I would then look at the dropout rates between each step, as well as from step one to each step.
(30:43):
So you'd have conversion rate from site land to checkout started, to checkout completed, to order completed, as well as the drop-offs in between each of those steps.
And I would then segment that data in a number of ways, maybe by channel, maybe by returning customer, et cetera, et cetera.
I would then start at the top of the funnel.
(31:05):
What is the cost to get someone onto your website?
I would then try and understand, like, is that good?
If it's a pound to get someone onto the website, like, is that good or is that bad?
Is that ever going to work?
Like, if your site conversion rate doubles, what's the CAC going to be?
Is that ever going to work for you?
(31:25):
Because if that number at the top is too high, you probably need to focus your efforts upper funnel to drive more efficiency up there.
Whereas if you look at it and you're like, wait, what?
25% of people drop out on phone number and address.
Like, they're pretty standard questions.
Like, is it the way we're asking them?
Is it the way the UX looks?
(31:46):
Is there something covering the next button on some devices on that screen?
I think the funnel, as easy as it is to build out, probably something that people tend to overlook, or they try and just use, like, the out of the box platforms.
I always feel with the funnel, particularly in the early days, get it into a Google Sheet.
(32:09):
You can at least manipulate the data then to understand, well, if that 20% drop off goes to 15%, what happens?
Like, now is my CAC, my acquisition cost, sustainable?
Like, your CEO or your boss will know, we can run the business on this CAC.
So, yeah, that would be my advice to someone at the early stages.
(32:35):
So yet again, another brilliantly common-sense approach, which is something that comes through when all the people that we talk about, or we talk to on the podcast, they all come down to very similar themes on this.
So it's good to hear that that's consistent and that works.
It's the brilliant basics.
I think as well, when you're actually forced to, you're forced yourself to nearly draw it out with a pen and paper, whatever excels, you know, you really start to think about what the journey looks like and where the friction points might be and that sort of thing.
(33:10):
I wanted to bring you back, Shane, to the customer retention part.
It strikes me that, you know, given the model where you have sold, let's say, a bunch of iPhones back in 2019, you've got people who are using them and all the rest of it, and then you're waiting around to see, you know, 18, 20 months later, et cetera, will they come back and upgrade?
(33:34):
I'd imagine there was a lot of bricking it going on in the business at that point, when you're just waiting to see.
And to go from that to a point where you're at now, where you've got like a 90% retention rate, it's phenomenal.
But do you want to tell us a little bit about how you managed to, let's say, engineer such an incredibly strong retention rate?
(33:55):
I think in, you know, towards the start of when people would start to upgrade, really, it was just about gathering data on what the performance was going to look like.
You could model it, you could hypothesise, but without actual, seeing the actual behavior, you've not really got anything to work off.
(34:15):
There were a few things we did at that stage.
We revamped My Account to make it as clear as we thought was possible and as simple as possible for customers to upgrade.
We also re-platformed CRM, which gave us a lever to, or a method through which we could contact customers to notify them that their upgrade was due, notify them of the great options that were available to them, the great pricing, et cetera, et cetera.
(34:51):
The initial behavior was pretty strong and I think that was down to understanding what, again, what consumers were going to need and giving them, you know, a super easy way to upgrade.
Over time, that's improved as we've gathered more data on that behavior and optimized CRM, etc., optimized my account.
(35:18):
You know, we've improved some load times, improved the login experience.
Yeah, we've gotten those numbers up to 90%.
Super.
Some incredible stuff.
It's a great story and the product proposition is brilliant.
The approach, the growth story, the retention story has all been great.
But really, I guess, the question for me now is, what's next?
(35:42):
Like, how are you going to, how are you going to build on what you've already got?
And what can we expect to see from Raylo in the future?
Sure.
So I think what's been really exciting to watch, because as I said, I joined that at a very early stage.
What's been really exciting to watch is how much the platform has improved over time in every way, right?
(36:10):
Our pricing, upgrades, additional devices, CAC, like all of these things, customer success, credit risk, like all of these things have improved dramatically over time.
And really, that's been off the back of being able to hire and retain an amazing team.
I think right now, what's most exciting is that we're going to continue to innovate in our core elements and we'll continue to drive brand awareness, mass market appeal.
(36:46):
But ultimately, I think we'll just continue to improve every area of what we do because there's just so much upside available.
There definitely is.
It sounds like a business with great potential.
I'm sure it's very, very exciting for everybody who was in there at the start as well.
So congratulations on that, Shane.
Listen, it's been great to have you on the call here today.
(37:08):
A cork man as well, living it up in London.
And so we're delighted that you're flying the flag for us over there.
Thanks for joining us today and we'll speak to you again soon.
This has been great.
Thanks, Gordon.
Thanks, Ger.
So, Gordon Newman, live and direct from Shenzhen, the capital of the hot and the sticky.
(37:29):
How is it over there?
It's very hot.
It's very hot.
It's very sticky.
And it makes for an interesting chat.
It's quite late as well.
It's like half eight in the evening.
Oh, that's very late for you, Gordon.
I thought you'd be, you know, tucked away in bed there before now.
Well, what did we learn?
I think there's a really interesting mixture going on here with a really strong, interesting proposition that fixes so much stuff for customers, plus some really great technology, plus some really great marketing.
(38:04):
And watching all of this collide has resulted in this wonderful growth story.
So it's pretty exciting.
Yeah, it's an incredible growth story.
It's kind of like, you know, I mean, obviously there's a lot to it, but it almost feels like how could you get it wrong?
But then again, nobody else did it either.
But, and I presume behind the scenes, there's some really hard, you know, elements around financial services and things like that, which probably prevent them from moving to, like, Ireland, for example, where anything related to fintech is tricky and complex to get up and running.
(38:42):
I think anytime I look at a something like this and think to myself, I wish they had that in Ireland because I would 100% use that.
I think it makes so much incredible sense.
I have drawers full of old phones, old, I think I have my very first iPad, my very first MacBook, all of them in the house.
You know, I just can't let them go.
(39:04):
So this whole idea of being able to buy, let's say, or, well, own a product when it is, you know, brand new, effectively spend a fraction of its value over the course of the time that you're going to spend using it is a massive win.
And then the second massive win is you're by virtue of doing that, you're aiding in a kind of a sustainable and circular economy, which obviously is so huge nowadays.
(39:34):
I mean, we talked last season about the landfills in Ghana full of textiles, and the likelihood of taxes coming in and to prevent that sort of thing.
So that level of sustainable...
Yeah...
One of the things I love about this is, over the last few years, we've heard lots of talk about access rather than ownership.
(39:55):
And you can kind of see that working really well on Netflix, on Spotify, where you subscribe, you get access to the full library.
And we haven't really seen it executed well on other products.
But this is really about having that access to the latest tech, having that in an affordable way that makes it attractive, makes it accessible to everybody.
(40:22):
And then you're constantly on the front foot of the tech cycle.
And I think that's really exciting.
But, like, technologically as you say, a huge challenge. I'm raging that we haven't got this.
And given our data infrastructure and some of the challenges around financial services here in Ireland, I'm just sad that I don't think it's going to be coming for a while because it's going to be difficult to crack that problem for people.
(40:52):
And what about that whole idea of going at a marketing problem and trying to create a verb out of what you're doing?
You know, isn't that like, I mean, you know, we're all right now in Ireland, we're Revoluting people money the whole time, you know, we're Googling everything.
It's so neat if you ever have that opportunity to be working in something that might become a verb at some stage.
(41:19):
And I think this has got a really good chance of that catching on and that happening where it's available.
And one of the things
I really enjoyed talking
to Shane about there,
was actually just stripping
the funnel down to the basics,
and really starting off
by understanding each step
(41:40):
and then trying to identify
what could be improved
during each step
and prioritising it there.
And then layering in the customer story
on top of the actual numbers,
because the numbers will only
give you half of the picture.
You need to talk to customers to understand what they're really thinking.
That definitely came out.
I mean, in the scenario
(42:01):
that we've been working on
as well recently,
the, actually contacting
customers directly,
you know, not just this kind of
oh, you should speak to your customer
kind of, you know,
but actually literally
phoning them up and arranging a call...
Having a conversation...
...and having a conversation
and finding out, you know,
where they got stuck or,
you know, what issues
they had on the site
(42:21):
or, you know,
did everything make sense?
Yeah, there's so many ideas to take inspiration from, borrow, steal.
I'm certainly going to be lifting a couple of those, but, you know, this theme of going back to basics, and really understanding what the customer wants and building something brilliant for them, seems to be consistent to just about everybody that we've spoken to.
(42:46):
Yeah, absolutely.
I think beyond that, which obviously it's nearly a, it's a fundamental, like it's a, well, it's a table stakes kind of situation to brilliant basics, but there are so many really chunky and meaty kind of questions beyond that in terms of, you know, the retention, the customer data aspect and marketing with data and so on.
(43:08):
I think it's a really exciting business to be working in at the moment.
I can't wait to see how this grows, and I can't wait to revisit this in 12 months' time, in two years' time and really understand the story of how that has evolved into a broader growth story, and whether or not they can maintain that massive 90% retention rate.
(43:37):
Tell me, in Shenzhen, you know, in terms of takeaways, is there such a thing as an Irish takeaway?
You know, do you see the people of Shenzhen ordering up their bacon and cabbage?
(43:58):
I think the people of Shenzhen would probably love to order bacon and cabbage. I just haven't seen that on the menu whilst I've been rocking around.
You know, I can imagine the people of Shenzhen kind of sitting back saying, hey, how about we watch a bit of Netflix and maybe have a bit of Irish?
Well, if they wanted to order in an Irish, they could order in an Irish, get it within 30 seconds and have that delivered to their building in no time at all.
(44:20):
And pay for it in installments?
Delivery services here is just unbelievable.
There's Deliveroo speed and there are other takeaway delivery services in Ireland.
But then there's Shenzhen speed and watching the number of deliveries take place and everybody's getting everything delivered.
If you want a cup of coffee, that's coming to your door in 30 seconds.
(44:44):
Does it cost more?
And, you know, are they competing on delivery?
The amount of delivery drivers and delivery riders that you'll see around the city is unbelievable.
And one of the things that's really struck me about being out here is the use of electric vehicles, electric scooters, electric cars.
There's hardly any, there are hardly any petrol or diesel scooters or cars in the city.
(45:11):
It's really, really clean and it kind of feels like being in the future.
Wow, fascinating.
I've seen some of the photographs, they look super.
Okay, well, look, you know, we'll let you off for your Irish because we know it's late over there, half eight.
So you're probably feeling like you need to hit the sack.
(45:33):
Yeah, a little bit.
You know me, tucked up with a cocoa in bed by nine o'clock.
Super.
Okay, thanks so much.
Thanks everybody for joining us today for this episode of Functional & Fabulous, and we will catch you all the next time.
You've been listening to Functional & Fabulous, with Ger Keohane and Gordon Newman.
If you'd like to know more about the podcast, or about StudioForty9 and Omnichannel Stories, please go to functionalandfabulous.ie. The show was produced by Roger Overall.
This is Functional & Fabulous, the omnichannel podcast where we unbox tales of online retail and digital transformation.
In this episode, Ger asks the tough questions...
Hey, how about we watch a bit of Netflix and maybe have a bit of Irish?
Our guest understandably forgets the question...
(00:22):
I've forgotten the question.
Gordon forgets our guest...
So one of the things I really enjoyed talking to Sean about there... he's not called Sean.
Ger doesn't say what you think you hear...
I can hear that you're trying to make a verb out of it, which is always a cunning stunt.
(00:42):
Gordon searches for the right word...
And do you see things like customers renting multiple, or leasing multiple, or Raylo-ing multiple products from you?
And our guest gives the best episode hook ever...
This is something I think marketers should be talking about more than AI.
This episode of Functional & Fabulous is brought to you with pride by StudioForty9, retail ecommerce experts, omnichannel growth consultants and cut-through performance marketing specialists.
(01:13):
StudioForty9, where your digital retail success is built.
Hello, and you're very welcome to another episode of Functional & Fabulous.
Today, we're delighted to welcome Shane Linehan from Raylo.
Shane describes himself as a hands-on marketing director with over 10 years' experience growing both startup and established tech businesses.
He worked originally in the events industry in Dublin for five years before moving to the UK to work in the financial services sector, where he got a taste of how large marketing functions work, which is to say, large scale, large budget, and very slowly.
(01:48):
Following his time there, and with some great experience in the more strategic side of marketing, he was keen to get back to startups and bring his knowledge to bear in that environment.
He met the guys at Raylo who were looking for a growth director, and the rest was history.
Shane, it's great to have you here today.
Yeah, it's great to be here.
Thanks for having me.
Not at all.
Hey Shane, welcome to the podcast.
Thanks, Gordon.
(02:09):
So I suppose to start with, Raylo, the overall concept is probably not one that our audiences are overly familiar with.
Do you want to tell us a little bit about the business?
Sure.
So Raylo's mission is to change how people access and enjoy devices like phones, laptops, consoles, and so on.
(02:32):
And we do this by offering these types of devices on a subscription.
The subscription has three main benefits for the customer.
Number one is value.
So right now, you can go to Raylo.com, you can get a brand new in the box iPhone 15, get it on a 12-month subscription, and over the 12 months, you'll only pay around 50% of the retail price.
(02:57):
The second is flexibility.
We also offer devices on monthly rolling cancel-anytime subscriptions.
That means you could get a PlayStation 5, play your favorite game, use and pay for as many months as you like, and simply return it when you're done.
The third, very important, is sustainability.
(03:18):
So we've built a fully circular model of refurb, reuse and recycle.
This means no Raylo devices ever go to landfill, and it's a far more sustainable way for consumers to get their tech.
So in terms of traction, so I joined Raylo at the very start back in 2019.
(03:38):
We've grown the business to 100,000 subscribers.
We're a £30 million annual recurring revenue business.
We've grown 40x in the past three years, and we have an industry-leading Trust Pilot score of 4.5 across 10,000 reviews, which we recently hit and we're very proud of.
(03:59):
And those are some magnificent stats, Shane.
I suppose one of the things that really attracted me to the whole idea that Raylo has is this concept of unlocking the residual value in a piece of hardware.
It's kind of a very elegant idea, but also somewhat hard to get your head around.
Can you explain a little bit where that came from originally?
(04:19):
Who had the idea?
Where they came up with it?
Yeah, so it was Carl, our CEO.
I think he was straddled with a drawer full of devices, as most people have.
Like literally, most people in the UK have a drawer full of devices.
And he couldn't get it out of his head that there must be so much value worth of devices, sitting in these drawers.
(04:43):
And residual value is a core part of what drives our pricing engine.
So our pricing engine really is driven by a circular economy of really maximizing the residual value and maximizing the use of the device.
What does that actually mean?
That means that our devices get used by multiple consumers for the maximum useful life of the device.
(05:10):
We then pass those savings back to the consumer.
And as I mentioned earlier, the ability to get a new iPhone 15, say, for 50% of the retail price, that's all driven by utilising this residual device model or residual value model.
Yeah, it's really, yeah, it's quite interesting because I suppose, I mean, everybody does have that drawer full of old iPhones, which they usually hold on to in the anticipation that maybe a child will want it at some stage.
(05:41):
And they're very hard to let go because you've paid a lot for them in the first place.
You know how much you paid for them.
You want to upgrade, but you're definitely not ready to throw it out.
The device often still works.
But at the same time, you're kind of in that mindset that you're not going to be able to sell it for very much either because the secondary market mightn't be very good.
(06:04):
Definitely the trade-in values that you get sometimes, I know certainly I've been looking at trading in, let's say, old MacBook Pros back to the original manufacturer.
And the actual value that you'll get for your trade-in is so pathetic, you'd prefer to nearly hang it on a wall than actually hand it back.
So what Raylo is doing in a nutshell is allowing customers to buy an item or have an item at a fraction of the cost and kind of pay as they use it and then hand it back.
(06:34):
And then Raylo is able to get the residual value out of it, the rest of the lifespan of the item and reuse it in that kind of sense.
So it's nearly the best of all worlds from a consumer point of view.
Exactly.
I mean, we've always been very focused on what consumers need and want.
And I think the reality of electronic waste is that only 20% of e-waste is properly recycled.
(07:03):
That's like imagining 80% of your neighbors going to their drawers full of devices and dumping that into their general waste bin.
No one actually wants to do that, right?
But it is what inadvertently happens because people sit on these devices for so long, they become worthless and they don't know what to do with them.
(07:23):
And to put this in perspective... Go ahead, Gordon?
I was going to say, what is the useful lifespan of a device?
So Apple and Samsung, if you look at their flagship phones is probably a good example device because they tend to have a quick upgrade cycle, quicker than laptops or tablets, say.
(07:50):
The average upgrade cycle on a phone in the UK is 27 months.
However, the average useful life of, say, an iPhone or a Samsung Galaxy is five or even seven years.
This is proven really by, if you look at the second-hand market, you'll still find iPhone 7 and iPhone 8 trading and being bought in the market.
(08:17):
And these devices still function, still work.
The refurbishment processes have improved so much that you can really maximize the lifespan of a device.
There's also things like battery replacement that can really extend it to its absolute maximum.
Yeah, so basically you buy an item, maybe for a grand.
(08:42):
It's useful for six years or more, but you use it for like 27, for the bones of two years.
So you're only getting 30% of the value out of it, but you've paid for the whole amount.
And what Raylo is doing is unlocking the rest of that there.
You operate on a kind of nearly a pay-as-you-use type policy.
So what happens then after that?
You know, I've been using the device for two years.
(09:04):
What am I doing with it?
Am I sending it back?
What happens next?
So we focus on incentivising customers to upgrade.
So upgrading is free.
And because our pricing model has only improved over time, often the new device is a similar price or even a better price than the old device was.
(09:24):
So a customer chooses to...
We notify the customer that they're due an upgrade.
They go to their Raylo account.
They simply select the device they want to upgrade to.
We send it out to them.
They then have 14 days to transfer their data across, return the old device.
They can do that via their courier of choice.
(09:48):
And no, you don't need to print a return label.
That's all gone now.
So you simply select your courier of choice or you go to your nearest post office.
The device then goes to our returns partner, Ingram.
Ingram are device refurbishment specialists.
They properly refurbish the devices, remove any data that might be on them.
(10:10):
And then what's amazing is those devices can then go back out to consumers who've chosen to lease a refurbished device in just five days.
And that really is critical in terms of...
We speak about residual values.
The quick turnaround is critical.
An iPhone 14 today and an iPhone 14 in six months or even three months, the values are different.
(10:35):
So to be able to turn devices around in five days from when it lands at Ingram to going out to another customer is something we're really happy with.
That's great, Shane.
I think one of the things this kind of reminds me of, and I'm probably showing off my age a little bit here, is the Radio Rentals kind of model that would have been around, I suppose, in the 80s and 90s.
(11:00):
But that meant that consumers were paying inflated prices to lease, effectively lease to buy TVs.
And one of the things I think is really interesting is that the consumer actually is going to pay less if they're using this rental model than they would do in a typical upgrade cycle.
(11:23):
And that's very switched on.
Has that been key to your messaging within your marketing?
Or how have you positioned this so that consumers see the real value?
Yeah, so I think what's interesting about Raylo is, we've built this new type of payment platform.
(11:43):
And really what that unlocks is this all-important circular economy for devices, which aims to completely eradicate e-waste.
But that's not actually the point we lead with.
The value for the customer really starts with amazing pricing, never before seen flexibility and amazing customer service.
(12:09):
And I think if you can't give people these great fundamentals, it doesn't matter how sustainable the end product is.
And frankly, I think consumers get shafted when they go to make more eco-friendly buying decisions.
You know, you want to buy better welfare meat, organic fruit and veg.
You want to buy an electric car, more eco-friendly white goods.
(12:34):
You're going to pay a price.
So that immediately creates barriers to entry.
Also for businesses, all that does is give you a smaller addressable market.
So I think if we want to see real change, we believe businesses need to make products more attractive in terms of access.
That means price, if they want to drive real change.
(12:55):
And so actually it's the great price, flexibility, customer service, actually, that we actually lead with as a means of getting consumers in.
And the great benefit is this circular economy and reduction of e-waste.
Sounds great.
I think it makes an awful lot of sense.
I continuously see, you know, some really interesting new approaches.
(13:21):
The likes of, I think we were talking about, Rockar, the business that is selling cars, basically.
So you can buy a car on a monthly subscription plan and that sort of thing.
And it starts to change how things operate.
But am I right in kind of understanding that, like, the financial services element that Raylo provides is one of the key unlocks for the business?
(13:47):
Is it kind of like, let's say, a variation on a financial service with an ecommerce front end?
Yeah, so how we describe it really is, or how we think about it is, it's really an ecommerce fintech hybrid.
And I think the innovation in creating this new category of payments is what makes Raylo truly unique.
(14:08):
And that's made up of a number of different components and moving parts.
And first would be this piece, which is circular economy driven pricing.
So as we've talked about, we get devices back.
We maximize the useful life of them.
We pass those savings on to consumers.
We can offer devices at these amazing prices.
(14:31):
Second is cutting-edge risk models.
So we've developed our own AI and machine learning-driven underwriting models.
And these pull data from a number of different sources, including open banking.
And this is specifically to manage this higher-value category of goods.
(14:56):
And really what that does is, it means we can offer devices on subscription to the vast majority of the population, and probably even more than traditional finance businesses can.
Then on the front end, we've got, you know, if you go to Raylo.com, you'll find a pretty slick front end.
You'll find all of our ecommerce brilliant basics.
(15:19):
You can easily browse, easily sign up.
And it's really these things in combination and that make it a, this, you know, fintech ecommerce hybrids.
And I think that's what makes Raylo truly unique.
It's a pretty special proposition and something that's new and very fresh.
And it's got this huge growth story sitting behind it.
(15:42):
So I think you mentioned there, you've had a 40X growth curve, which is enormous.
So can you talk us through a little bit about how you've packaged the proposition and how that growth has been delivered?
Like, where is it coming from?
Sure.
So, you know, the business has changed and evolved quite a bit over time.
(16:06):
Really though, we've always focused on exceeding consumer need.
And we always try and put the customer first.
In fact, it's one of our company values.
And this has enabled us to evolve the products, to deliver a larger and larger and larger addressable audience, higher conversion rates, and greater brand awareness.
(16:28):
Some key changes obviously have been to our pricing engine.
That gives us more mass market appeal and also drives these higher conversion rates.
We've expanded into new product categories like consoles and wearables.
These are high demand categories that have mass market demand, mass market appeal.
(16:50):
We've also partnered with Channel 4 recently.
And that's about, again, taking Raylo brand awareness up a notch, I guess.
And I think if you zoom out, though, really across all areas of the business, you know, products, engineering, customer service, credit risk, we vastly improved every area of what we've done.
(17:18):
And I think what's exciting about it is there's just so much upside ahead of us.
That's great.
And do you see things like customers renting multiple, or leasing multiple, or Raylo-ing multiple products from you?
And do you see those customers referring to other customers or other potential customers?
(17:41):
So on referral, this is, you know, a really important part of what we do.
And we know that from speaking with our customers, you know, almost half of our customer base actively use a referral friend, actively tell their friends about Raylo.
And it's an insight that consistently comes up in doing customer research or just speaking with customers.
(18:03):
So many of our customers say, oh, my neighbor told me about you or my cousin told me about you, et cetera.
In terms of multiple devices, so I think we've done a great job at nailing upgrades.
So 90% of our customer base upgrades to another device that massively beats industry trends or industry averages, which are about 30%.
(18:29):
And yes, we see, but not only that, we see customers take, you know, they might come in and take a phone on day one, you know, a month later, they might also take a PS5 or they might decide to set up their own business.
They might decide to take a laptop.
So I think additional devices, multiple devices has been a key lever and a huge success, part of the success story in our growth, for sure.
(18:59):
When you started out, so back in 2019, you had a kind of a, you had a couple of different challenges as a marketing director.
Like the first obviously is you've got a new brand, Raylo.
It doesn't really mean anything.
So you've got to get the brand awareness going.
I can hear that you're trying to make a verb out of it, which is always a cunning stunt.
(19:22):
But also you've got the education piece, I suppose, to explain to people what it is that you do, what your proposition is.
And it is kind of complex.
So how did you guys go about that and how did you kind of address that as the marketing and the growth director?
Yeah, it's been a challenge, for sure.
I mean, from in the early days, we really made sure that we focused on brilliant basics in terms of getting people through the website and converting at a rate that worked for us.
(20:00):
I think a complexity that we had was we have a largely custom front end.
So we weren't afforded the luxuries that will come with, say, a Shopify checkout of high conversion rates.
We had to work really hard to give ourselves high conversion rates.
(20:21):
And myself and our chief product officer, you know, we ran the A-B testing and the conversion rate optimization program in the early days.
A lot of that was focused around trust, and ensuring people were clear and comfortable and convinced on the proposition and the business.
I think achieving a doubling of the conversion rate from site land to order complete is something that we were, and I guess still are, extremely proud of.
(20:53):
What were your main learnings there?
You know, A-B testing, it's something people talk about an awful lot.
It can be incredibly frustrating as well because, you know, it takes quite a bit of effort, quite a bit of creativity, and sometimes you get very, very slim to notional differences between the tests.
So from your point of view, what were the big and interesting kind of conversion hacks that you put in place there?
(21:20):
I think what a lot of people can skim over is how critical a good data platform is.
So from the very start, you know, being data-driven, it has been absolutely key to what we do at Raylo, and giving ourselves a really great data infrastructure has been the backbone of how we've been able to A-B test.
(21:44):
Like, it doesn't matter what you're testing, right?
If the data isn't robust, it's going to be really, really hard to actually understand what you're doing.
I think A-B testing, we've always based it on as much consumer insight that we can.
That means running consumer insights, speaking with customers who might have dropped off in the process.
(22:08):
Often, it's the basics.
It's the really simple stuff that can drive massive upside.
I find it fascinating how nailing the brilliant basics like load times, next-day delivery, filtering, et cetera, can make such a difference.
In terms of specifically A-B testing, I think having robust data infrastructure, having a robust view on your funnel, you know, X amount of traffic lands on your website, and you have a CAC of £30.
(22:40):
Something happens in the middle, right?
There's drop-off.
And understanding what causes those people to drop off in any ways you can, as I say, surveys, phone calls, et cetera.
And I think it's just really, really important.
Customer success were a massive help to us in the early days because they were actively on Intercom, actively speaking to customers and figuring out where they were dropping off.
(23:05):
I would say it'll be different for every business.
It's one of the questions I was going to ask.
The tech stack that you used, a nice little shout out for the Intercom boys.
What else did you use?
I suppose in particular, I guess, in terms of the data platform, how early were you able to design that?
And what kind of, you know, I presume from day one, that was like an iterative design process.
(23:28):
And did you change tech stacks in the meantime?
Well, I think I'm lucky in that our co-founders are, you know, very much drivers of, you know, using data to make decisions.
And from where I sit, I feel really lucky in that.
A lot of it's just sort of happened.
(23:49):
We just happen to have a great data platform.
I'm not too in the detail of it.
But for example, I know, you know, how we collect data, how we structure a transaction.
The data that we collect upon collecting or logging that transaction can be caught in many different ways.
(24:10):
It can be easily surfaced.
We've also done a lot of work on integrating marketing with credit risk.
So the business I previously worked in was a consumer lending business.
And I always felt there was such a wealth of data in consumer credit that could be leveraged in marketing.
And I'm really proud that we've managed to do that at Raylo.
(24:33):
Another big area of focus for us has been on conversion APIs.
And this is something I think marketers should be talking about more than AI.
Because it is, I think, more of a burning challenge and something that I think needs proper deep diving on for marketing directors and for heads of marketing within businesses.
(24:59):
I think out-of-the-box platforms, unless you're on a Shopify or something out of the box, I think it's a really complex area.
And let's face it, right?
Let's say you're a data engineer over at, I don't know, HSBC, and you crack conversion APIs for that business.
You're not going to write a blog post about it because it was probably loads of work and it probably is IP.
(25:23):
I think if businesses want to get it right, marketing directors, heads of marketing have to own it.
I'm not a marketing person.
Tell me.
API always gets me excited, but I don't know what a conversion API is.
So with the phasing out of cookies, the way ad tracking traditionally worked was you'd click on, say, a Google Ad, you'd land on the website, you'd be cookied.
(25:50):
That would then track you through to a thank you page.
Thank you for ordering.
The pixel or the cookie would then fire as a transaction, and that will be passed back to the ad platform via cookies or via a pixel.
Same thing, really.
Now that's all being phased out.
So now what you need to do is send that information, that data via what's called...
(26:16):
I've heard people call them CAPIs,
I don't like that.
I still call them conversion API.
It's now sent via a conversion API to the ad platforms.
Web tracking generally is really complicated.
I only hear the complaints at the moment because there's many of them.
(26:37):
I was going to jump in and say obviously we went very functional for a second there.
One of the points I wanted to pick up on was actually if we can rewind a little to A-B testing.
One of the things I think is really interesting is that you've got this convergence of the data from your conversion APIs, from your web tracking and how people are getting through the funnel.
(27:03):
Then you've layered this over with the conversations that you've been having with customers.
It's something that we talk about quite a lot to people, is that the data on its own doesn't necessarily tell the full story without some of that customer colour that you can only get from qualitative research, or actually quality conversations with customers.
(27:31):
If you're working with your team there in customer success, how would you identify the themes of the things that you wanted to change or that you wanted to address?
Yeah, so first of all, I'd actually take a step back and zoom out a little bit from that, and really understand what's the goal of the business and what are the actual objectives that you're trying to achieve?
(27:59):
I think we live in an age where, well, we do live in an age where getting your hands on data has never been easier, right?
And speaking with customers, again, it's probably never been easier for online businesses.
And I think that in itself can cause problems.
(28:19):
I think you have to be laser focused on what you're actually trying to achieve.
Are you trying to achieve better conversion rates through your website?
Are you trying to achieve lower CAC?
Those could be quite different, right?
You could say to me, well, if I achieve a better conversion rate, I'll achieve a lower CAC.
(28:40):
But the problem could also be upper funnel.
It could be proposition, which unless that changes, the conversion rate is always going to be an issue.
So I think starting out with understanding what the objective is or what the objectives might be is critical and going from there.
For example, right?
(29:00):
If your hypothesis is that your proposition is falling short, like your question to customer success needs to be just that.
How do customers describe...?
Like, are there parts of the process that customers don't understand?
As opposed to, we've noticed loads of customers drop off because we ask them for their phone number.
(29:28):
Can we remove phone number?
Do we need it?
Can we make it optional?
They're very different things.
Yeah, there's different ways of probing for qualitative data on both of those.
So I think that's really important.
So if we've got a befuddled and confused head of ecommerce that's sitting there at the moment going, right, where do I start if I'm going to unpick some of the challenges I've got driving growth in the business?
(30:01):
Because that tends to be most people's objectives.
How would you then, how would you advise them to unpick that puzzle?
Because as you said, one question of, do we really need a phone number is very, very different to, do you understand the core proposition?
(30:23):
So what I would do is I would build in Excel an end-to-end funnel of the website.
So site land through to conversion.
I would then look at the dropout rates between each step, as well as from step one to each step.
(30:43):
So you'd have conversion rate from site land to checkout started, to checkout completed, to order completed, as well as the drop-offs in between each of those steps.
And I would then segment that data in a number of ways, maybe by channel, maybe by returning customer, et cetera, et cetera.
I would then start at the top of the funnel.
(31:05):
What is the cost to get someone onto your website?
I would then try and understand, like, is that good?
If it's a pound to get someone onto the website, like, is that good or is that bad?
Is that ever going to work?
Like, if your site conversion rate doubles, what's the CAC going to be?
Is that ever going to work for you?
(31:25):
Because if that number at the top is too high, you probably need to focus your efforts upper funnel to drive more efficiency up there.
Whereas if you look at it and you're like, wait, what?
25% of people drop out on phone number and address.
Like, they're pretty standard questions.
Like, is it the way we're asking them?
Is it the way the UX looks?
(31:46):
Is there something covering the next button on some devices on that screen?
I think the funnel, as easy as it is to build out, probably something that people tend to overlook, or they try and just use, like, the out of the box platforms.
I always feel with the funnel, particularly in the early days, get it into a Google Sheet.
(32:09):
You can at least manipulate the data then to understand, well, if that 20% drop off goes to 15%, what happens?
Like, now is my CAC, my acquisition cost, sustainable?
Like, your CEO or your boss will know, we can run the business on this CAC.
So, yeah, that would be my advice to someone at the early stages.
(32:35):
So yet again, another brilliantly common-sense approach, which is something that comes through when all the people that we talk about, or we talk to on the podcast, they all come down to very similar themes on this.
So it's good to hear that that's consistent and that works.
It's the brilliant basics.
I think as well, when you're actually forced to, you're forced yourself to nearly draw it out with a pen and paper, whatever excels, you know, you really start to think about what the journey looks like and where the friction points might be and that sort of thing.
(33:10):
I wanted to bring you back, Shane, to the customer retention part.
It strikes me that, you know, given the model where you have sold, let's say, a bunch of iPhones back in 2019, you've got people who are using them and all the rest of it, and then you're waiting around to see, you know, 18, 20 months later, et cetera, will they come back and upgrade?
(33:34):
I'd imagine there was a lot of bricking it going on in the business at that point, when you're just waiting to see.
And to go from that to a point where you're at now, where you've got like a 90% retention rate, it's phenomenal.
But do you want to tell us a little bit about how you managed to, let's say, engineer such an incredibly strong retention rate?
(33:55):
I think in, you know, towards the start of when people would start to upgrade, really, it was just about gathering data on what the performance was going to look like.
You could model it, you could hypothesise, but without actual, seeing the actual behavior, you've not really got anything to work off.
(34:15):
There were a few things we did at that stage.
We revamped My Account to make it as clear as we thought was possible and as simple as possible for customers to upgrade.
We also re-platformed CRM, which gave us a lever to, or a method through which we could contact customers to notify them that their upgrade was due, notify them of the great options that were available to them, the great pricing, et cetera, et cetera.
(34:51):
The initial behavior was pretty strong and I think that was down to understanding what, again, what consumers were going to need and giving them, you know, a super easy way to upgrade.
Over time, that's improved as we've gathered more data on that behavior and optimized CRM, etc., optimized my account.
(35:18):
You know, we've improved some load times, improved the login experience.
Yeah, we've gotten those numbers up to 90%.
Super.
Some incredible stuff.
It's a great story and the product proposition is brilliant.
The approach, the growth story, the retention story has all been great.
But really, I guess, the question for me now is, what's next?
(35:42):
Like, how are you going to, how are you going to build on what you've already got?
And what can we expect to see from Raylo in the future?
Sure.
So I think what's been really exciting to watch, because as I said, I joined that at a very early stage.
What's been really exciting to watch is how much the platform has improved over time in every way, right?
(36:10):
Our pricing, upgrades, additional devices, CAC, like all of these things, customer success, credit risk, like all of these things have improved dramatically over time.
And really, that's been off the back of being able to hire and retain an amazing team.
I think right now, what's most exciting is that we're going to continue to innovate in our core elements and we'll continue to drive brand awareness, mass market appeal.
(36:46):
But ultimately, I think we'll just continue to improve every area of what we do because there's just so much upside available.
There definitely is.
It sounds like a business with great potential.
I'm sure it's very, very exciting for everybody who was in there at the start as well.
So congratulations on that, Shane.
Listen, it's been great to have you on the call here today.
(37:08):
A cork man as well, living it up in London.
And so we're delighted that you're flying the flag for us over there.
Thanks for joining us today and we'll speak to you again soon.
This has been great.
Thanks, Gordon.
Thanks, Ger.
So, Gordon Newman, live and direct from Shenzhen, the capital of the hot and the sticky.
(37:29):
How is it over there?
It's very hot.
It's very hot.
It's very sticky.
And it makes for an interesting chat.
It's quite late as well.
It's like half eight in the evening.
Oh, that's very late for you, Gordon.
I thought you'd be, you know, tucked away in bed there before now.
Well, what did we learn?
I think there's a really interesting mixture going on here with a really strong, interesting proposition that fixes so much stuff for customers, plus some really great technology, plus some really great marketing.
(38:04):
And watching all of this collide has resulted in this wonderful growth story.
So it's pretty exciting.
Yeah, it's an incredible growth story.
It's kind of like, you know, I mean, obviously there's a lot to it, but it almost feels like how could you get it wrong?
But then again, nobody else did it either.
But, and I presume behind the scenes, there's some really hard, you know, elements around financial services and things like that, which probably prevent them from moving to, like, Ireland, for example, where anything related to fintech is tricky and complex to get up and running.
(38:42):
I think anytime I look at a something like this and think to myself, I wish they had that in Ireland because I would 100% use that.
I think it makes so much incredible sense.
I have drawers full of old phones, old, I think I have my very first iPad, my very first MacBook, all of them in the house.
You know, I just can't let them go.
(39:04):
So this whole idea of being able to buy, let's say, or, well, own a product when it is, you know, brand new, effectively spend a fraction of its value over the course of the time that you're going to spend using it is a massive win.
And then the second massive win is you're by virtue of doing that, you're aiding in a kind of a sustainable and circular economy, which obviously is so huge nowadays.
(39:34):
I mean, we talked last season about the landfills in Ghana full of textiles, and the likelihood of taxes coming in and to prevent that sort of thing.
So that level of sustainable...
Yeah...
One of the things I love about this is, over the last few years, we've heard lots of talk about access rather than ownership.
(39:55):
And you can kind of see that working really well on Netflix, on Spotify, where you subscribe, you get access to the full library.
And we haven't really seen it executed well on other products.
But this is really about having that access to the latest tech, having that in an affordable way that makes it attractive, makes it accessible to everybody.
(40:22):
And then you're constantly on the front foot of the tech cycle.
And I think that's really exciting.
But, like, technologically as you say, a huge challenge. I'm raging that we haven't got this.
And given our data infrastructure and some of the challenges around financial services here in Ireland, I'm just sad that I don't think it's going to be coming for a while because it's going to be difficult to crack that problem for people.
(40:52):
And what about that whole idea of going at a marketing problem and trying to create a verb out of what you're doing?
You know, isn't that like, I mean, you know, we're all right now in Ireland, we're Revoluting people money the whole time, you know, we're Googling everything.
It's so neat if you ever have that opportunity to be working in something that might become a verb at some stage.
(41:19):
And I think this has got a really good chance of that catching on and that happening where it's available.
And one of the things
I really enjoyed talking
to Shane about there,
was actually just stripping
the funnel down to the basics,
and really starting off
by understanding each step
(41:40):
and then trying to identify
what could be improved
during each step
and prioritising it there.
And then layering in the customer story
on top of the actual numbers,
because the numbers will only
give you half of the picture.
You need to talk to customers to understand what they're really thinking.
That definitely came out.
I mean, in the scenario
(42:01):
that we've been working on
as well recently,
the, actually contacting
customers directly,
you know, not just this kind of
oh, you should speak to your customer
kind of, you know,
but actually literally
phoning them up and arranging a call...
Having a conversation...
...and having a conversation
and finding out, you know,
where they got stuck or,
you know, what issues
they had on the site
(42:21):
or, you know,
did everything make sense?
Yeah, there's so many ideas to take inspiration from, borrow, steal.
I'm certainly going to be lifting a couple of those, but, you know, this theme of going back to basics, and really understanding what the customer wants and building something brilliant for them, seems to be consistent to just about everybody that we've spoken to.
(42:46):
Yeah, absolutely.
I think beyond that, which obviously it's nearly a, it's a fundamental, like it's a, well, it's a table stakes kind of situation to brilliant basics, but there are so many really chunky and meaty kind of questions beyond that in terms of, you know, the retention, the customer data aspect and marketing with data and so on.
(43:08):
I think it's a really exciting business to be working in at the moment.
I can't wait to see how this grows, and I can't wait to revisit this in 12 months' time, in two years' time and really understand the story of how that has evolved into a broader growth story, and whether or not they can maintain that massive 90% retention rate.
(43:37):
Tell me, in Shenzhen, you know, in terms of takeaways, is there such a thing as an Irish takeaway?
You know, do you see the people of Shenzhen ordering up their bacon and cabbage?
(43:58):
I think the people of Shenzhen would probably love to order bacon and cabbage. I just haven't seen that on the menu whilst I've been rocking around.
You know, I can imagine the people of Shenzhen kind of sitting back saying, hey, how about we watch a bit of Netflix and maybe have a bit of Irish?
Well, if they wanted to order in an Irish, they could order in an Irish, get it within 30 seconds and have that delivered to their building in no time at all.
(44:20):
And pay for it in installments?
Delivery services here is just unbelievable.
There's Deliveroo speed and there are other takeaway delivery services in Ireland.
But then there's Shenzhen speed and watching the number of deliveries take place and everybody's getting everything delivered.
If you want a cup of coffee, that's coming to your door in 30 seconds.
(44:44):
Does it cost more?
And, you know, are they competing on delivery?
The amount of delivery drivers and delivery riders that you'll see around the city is unbelievable.
And one of the things that's really struck me about being out here is the use of electric vehicles, electric scooters, electric cars.
There's hardly any, there are hardly any petrol or diesel scooters or cars in the city.
(45:11):
It's really, really clean and it kind of feels like being in the future.
Wow, fascinating.
I've seen some of the photographs, they look super.
Okay, well, look, you know, we'll let you off for your Irish because we know it's late over there, half eight.
So you're probably feeling like you need to hit the sack.
(45:33):
Yeah, a little bit.
You know me, tucked up with a cocoa in bed by nine o'clock.
Super.
Okay, thanks so much.
Thanks everybody for joining us today for this episode of Functional & Fabulous, and we will catch you all the next time.
You've been listening to Functional & Fabulous, with Ger Keohane and Gordon Newman.
If you'd like to know more about the podcast, or about StudioForty9 and Omnichannel Stories, please go to functionalandfabulous.ie. The show was produced by Roger Overall.
Popular Podcasts
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Special Summer Offer: Exclusively on Apple Podcasts, try our Dateline Premium subscription completely free for one month! With Dateline Premium, you get every episode ad-free plus exclusive bonus content.
The Breakfast Club
The World's Most Dangerous Morning Show, The Breakfast Club, With DJ Envy, Jess Hilarious, And Charlamagne Tha God!
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.