November 28, 2025 • 47 mins
Are you ready for a crash course in customer retention? You’re about to get one.
Meghan Frazier, retention lead at Heights, joins Ger and Gordon to deliver one of the most densely packed episodes we’ve ever produced. It’s wall-to-wall insight and practical advice from the get go. If you want to keep the customers you’ve got, this episode is a playbook that will help you do just that.
From meeting customers where they are in their journey with you, rather than meeting them where you think they should be, to reducing cancellations, to honouring customer milestones, to using discounts correctly (which is to say, ‘sparingly’), it’s all here.
And more. Is WhatsApp the customer retention app you should be using? Yes.
Should you be sending customers personalised video messages from your company founder? Obviously.
Can you run a business that doesn’t allow customers to only buy once? You can. How? Listen to find out.
Have you ever considered how your customer acquisition affects your customer retention? No? Meghan has.
Let’s not even get started about why you should ghost some of your customers forever.
Get ready for a masterclass in retention.
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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, the stakes have never been higher...
If you get it wrong, then you can forget that relationship with that customer.
Very true, high stakes stuff.
If your customers are heading for the exit, our guest knows what to do...
(00:25):
We save about 20 per cent of customers going to the cancellation flow.
People who shouldn't be allowed to do science, do science...
But like, look at all those industry practitioners doing proper science.
Our guest asks the big questions...
How often do you as a customer actually get to hear about the difference, what your voice made in a company that you're taking something from?
(00:50):
Gordon considers an alternative approach to customers...
Do you ghost them or do you carry on talking to them?
Ger suggests a career change for Gordon...
Monk.
Father Gordon.
Brother Gordon.
Brother Gordon.
But is it Ger who's in the wrong job?
I hate marketing.
And our guest agrees,
(01:11):
this is our best episode ever...
I am well aware that we are above the industry standard.
This episode of Functional & Fabulous is brought to you with pride by Studio Forty9, retail ecommerce experts, omnichannel growth consultants and cut-through performance marketing specialists.
Studio Forty9, where your digital retail success is built.
(01:35):
Today on Functional & Fabulous, we're joined by someone who lives and breathes customer loyalty.
Meghan Frazier, retention lead at Heights, the science-backed supplement brand for brain and gut health.
Meghan's career started at Wayfair, where she cut her teeth in customer service and helped open their second US contact centre,
an experience that gave her a deep understanding of what great ecommerce and customer experience really means.
(02:00):
From there, she moved on to roles at various pet food companies, including Tails.com, where she honed her superpower, retention strategy that drives sustainable growth.
Now at Heights, Meghan is reimagining what loyalty looks like in the wellness space.
She's passionate about understanding why customers churn and distinguishing can't afford it from don't see the value.
(02:21):
Building systems that keep customers engaged without falling into the trap of endless discounting.
She's also fascinated by the future of retention, AI-driven churn prediction, smarter subscription design and new ways to use WhatsApp for customer engagement.
Meghan, we're delighted to have you here with us today.
You're very, very welcome.
Thank you so much.
That was such a nice intro.
(02:42):
I suppose I'm curious, just as we get started with this, and Gordon continues to laugh at me and my intros.
Do you think that starting out deep in customer service is the best way to understand what customers really value in real time?
And how much does that lead to what you do now in customer retention?
(03:02):
I think I'm biased, having started in customer service and knowing how things work.
But at every company that I've been a part of or joined since as a retention lead, I try to spend some time in CX tickets and really getting to know, not only what our customer is saying, but how do we practically do things?
(03:25):
And I think understanding the mechanisms behind how our deliveries work, where things go, what goes in each box, how are customers contacting us, how do our systems work, allows you to have better conversations about the practical, what can we do to keep customers, rather than this, like, pie in the sky, oh, we should do this.
Well, actually, there's these limitations in the background, how our system works,
(03:48):
so this is going to be a bigger project.
But yeah, I'd highly recommend any retention professional really get grounded in what is customer care in their respective companies?
And it makes you much better at your retention.
Kind of like working on the shop floor, you know, at the C-speed level, going in there and seeing what's really happening on a day-to-day basis.
(04:09):
Yeah, definitely.
And so you still do that at Heights at the moment?
I have access to our Gorgias.
I go in from time to time, look through customer tickets.
We have an amazing customer, head of customer care,
so I spend a lot of time speaking to her about what works for our customers, what doesn't.
We try to use how customers speak in emails, in all of our copy, not emails, in emails or tickets sent in to us.
(04:36):
So we found a lot of success on our cancel flow or our check-in emails by using plain language customers use themselves.
One of my big philosophies in any piece of work I do is meeting customers where they are, rather than trying to force them into something you think that they should be.
(04:57):
And that's where the magic, I think, happens in terms of keeping customers.
That really makes a pile of sense.
It's a very kind of a simple observation, but it's quite an obvious one as well at the same time.
I think for the beginning of an episode, as insights roll in, that's quite a big one for people to take to the bank.
Because very often you find the retention team is a bit disconnected from the CX team.
(05:23):
So what are you trying to do in that retention role is keep customers.
But that seems to be traditionally a marketing function.
And the marketing function disconnected from the actual point-of-service delivery.
Yeah.
And I think retention can become overly brand-led as well.
Like, you're trying to run specifically brand-led messaging initiatives rather than testing what works and leading up to filtering back your information from customer care into brand, again, so that you're speaking in ways and using things that make more sense to customers going forward.
(06:01):
So I highly recommend it.
Everybody should spend time in the tickets.
You don't necessarily have to do them, but read them, understand them, talk to the customer care agents.
I'm in all of the CX channels, customer care channels, on every business I've been in to make sure that I'm seeing if things are popping up.
And a lot of times what seems like a very small issue, if you dig into the data, actually might be a bigger one.
(06:25):
So just really keeping your hand on the pulse of what's going on day-to-day makes you a much better retention professional.
And you mentioned cancellation reasons.
I suppose one of the key things that you're looking at as well in terms of retention is to prevent or redirect cancellation, I suppose, or, you know, divert somebody from cancelling into keeping their subscription.
(06:51):
You know, how valuable have you found it to be working in that area for a business like Heights?
Massively.
I think A, it's a big part of learning.
If you know why your customers are leaving, you can usually fix that higher up in the funnel.
So just understanding your basic cancellation reasons is hugely important.
(07:12):
But cancellation intervention is even more important to a business.
So I say this, I am well aware that we are above the industry standard, but we save about 20 per cent of customers going to the cancellation flow each month.
It's a massive number.
It's bigger than anywhere else I've been before.
(07:34):
And that is because we're constantly testing and learning.
We're testing what discounts work.
We're testing what messaging works.
We're testing what segmentation works.
I think a lot of businesses just apply a one-size-fits-all discount.
And you're offering, you're offer-conditioning customers, essentially, to stay.
They know if they come back, they cancel, they get this discount.
And they just keep going around in this merry-go-round of lovely discounting that you offer them.
(07:59):
But really getting down to the segmentation, addressing issues, offering pause delays, cancel, like cancellations for us.
Some of our supplements aren't pregnancy- and breastfeeding-safe.
Understanding what those customers need in a cancellation journey and then follow up afterwards.
It's all very important.
(08:20):
But yeah, like for us, it's been absolutely massive and helped keeping churn at a better stable rate, or not increasing churn too drastically when you have new customers come in because you're targeting them appropriately with appropriate messaging at what could be their last point of contact with the company.
And so you mentioned, so your kind of churn intervention, we'll call it, is successful at 20 per cent.
(08:49):
Well, this is an area I'm not very familiar with.
What would be the kind of industry average or what are you benchmarking against there?
Other companies I've been at, it's like five to eight.
Okay.
And what do you put down the success?
So you're obviously, I presume you're segmenting for people who just joined and are churning early versus people who should be loyal and, let's say, have had 10 to 15 orders, maybe they've been with you a year or more.
(09:18):
You're, I presume you're looking at those segments differently when it comes to how to divert then, yeah...
Messaging and also making sure that it's commercially the right decision.
I think a cancel flow can become really messy of like, there's some businesses that believe that these customers are going to cancel, so just offer them what you need to offer them and that's fine.
(09:40):
But you actually have a lot of customers who go on to the cancellation flow, especially an early-journey to see how easy it is to cancel.
I've seen that in a lot of user testing across every business that I've been with, people just look to see how easy it is to manage their account.
And then you're offering discounts to customers who don't actually need these discounts going forward.
So it's not actually going to deliver you incremental value.
(10:03):
So being careful with that as well has been really successful for us making sure we're discounting at the right place at the right time after the right visits.
I also put it down to the messaging we're using.
I think a lot of health food companies, and I think pet food as well, can get quite preachy.
We're the best, we're this, we're that.
(10:23):
It's not about that.
It's about the jobs to be done for customers.
How do they want to feel?
What do they want to see in difference?
How do we play it back to them how what we're doing at Heights is going to help them get there?
And we found that not leading with the discount and putting it at the bottom of messaging or even not having it was more successful because we were trying to replay to a customer why they had originally signed up with us.
(10:51):
You want to feel a difference.
Here's what you need to do to feel that difference.
Confident you're going to feel that difference.
Stay on with us and see that.
And it's made a massive difference as well for us.
It's interesting because, yeah, well, actually, it's interesting because I did a quick review of the reviews for Heights.
And one of the things that people talk about is feeling the difference.
(11:13):
And I'm presuming you're just picking up on the language that they're using, but that language also makes its way into your messaging, I guess.
Yeah, everywhere.
And what is difference to customers is like different for different things, right?
With different products and understanding what value you're going to get segmenting these down is also hugely important.
(11:33):
But the cancel flow plays a key part in any good retention strategy.
And I know a lot of businesses are like, well, these customers are low value.
They wouldn't have stayed.
That is not the case for early-journey customers.
If you can intervene and get them over that hump to stay, you're going to end up having an immediate impact on your overall retention and your LTV with more orders in early-journey when customers are more likely to churn.
(12:01):
So I don't think it's, like, low-hanging fruit for a business that they're just, like, really ignoring most of the time.
Yeah.
And how do you, moving on from cancellation, how do you nurture early customers?
You know, so somebody who's just signed up, they got their first month subscription.
Do you have a way, do you have, like, strategies and tactics for nurturing those people along, let's say the first, until they get to order number six?
(12:30):
I'm... like, I've noticed it sometimes in the past with other subscription businesses, you know, there's a number, like a sweet spot number, after which you don't have to worry about them churning for a while.
You ghost them, essentially.
Yeah, that was the question I was going to ask of, of how do you get from that point where you've acquired a customer, the customer is obviously looking like they're going to, they're going to remain with you for a period of time.
(13:01):
Do you ghost them?
Or do you carry on talking to them?
And that's, that's a real dilemma, I think, for some retention managers, like, at what point do you leave alone versus at what point do you intervene?
So I think it comes down to capacity for most retention managers, leads, heads of where do you spend most of your energy testing and learning?
(13:25):
And most people end up doing in months one to three, because that's usually your highest churn point for customers.
And it's your highest pot of customers because their acquisition is bringing customers in constantly.
I think how I've tried to mitigate that at Heights as well, because again, we're still in kind of startup phase, we're new, and we may be doing 25 million in ARR, but we're still running a really stealth business.
(13:52):
Dan and Joel, our founders, are really passionate about making sure that the team is sustained growth is, like, the business is sustained growth, as well as our customer base.
And we work with an email agency.
And what we try to do is use our acquisition emails as evergreen emails for our current base as well.
(14:16):
So sometimes what we'll do instead of segmenting down a sales email for, say, our biotic product, we will still send it to people who take biotic.
And it's replaying to them all the benefits, what they see from it, why they may have started it, what they'd be looking for from it.
(14:37):
And you see no churn from it, but you're still building that brand value.
You're still speaking to customers.
You're reminding them, but you're doing it in a more nimble way.
I think a lot of businesses have a tendency to exclude existing customers from those types of comms.
And for us, they've been really great in terms of either getting customers back on the site to upsell additional products or to try to help strengthen retention in a period where we might have traditionally ghosted them after.
(15:08):
We're working on building out more nurture journeys for months two and three.
I think, again, most people do onboarding and kind of set it and forget it and then hope that you have the impact over time.
So we're working on more of that as well.
And again, more customer language of what do you want to see by this point in your journey, I think is hugely important as well.
(15:29):
And we're looking at more how do we honour customer milestones?
You've been with us a year,
what do we do to really honour that?
And then the other big thing that I think a lot of businesses forget is celebrating when you've put customer voice into your experience.
So we have the most amazing product development team at Heights.
(15:50):
What we do on the retention side, we couldn't do without them because they bring out actually really great things.
But that includes packaging.
So we heard from everybody that we were sending way too many packages.
We were sending way too much cardboard.
And they've completely redesigned that.
And we've made sure to make Instagram videos, email customers, really celebrate the fact that what their feedback has done has led to change in the business.
(16:15):
Businesses send out surveys all the time.
But how often do you as a customer actually get to hear about the difference, what your voice made in a company that you're taking something from?
I think it builds brand loyalty in a really different way than even the product does itself.
Yeah, I think that would build a strong tissue of brand loyalty.
(16:35):
And because you've got a community, you've got, like, a feedback loop.
And also, at the end of the day, that's something that people genuinely care about.
And it's a real pleasure to see, let's say, packaging that you feel is clever with intent, you know, to reduce packaging, to reduce cardboard and so on.
We're all conscious of that nowadays.
(16:56):
I quite like the idea of 'You said, we did'.
I think that's... because for an individual customer, if they were the customer that gave that feedback, it will feel quite personal.
There's quite a lot to take away there.
You mentioned also that you talked about that on Instagram and across social channels.
So how do you kind of coordinate between the retention activity that you're doing and the broader comms that are going out across social media, other media mechanisms that you're using?
(17:27):
Yeah.
It's not always, like, super-aligned.
Our social media channels are primarily acquisition-based at the moment and are that side of the marketing team there.
Retention at Heights has just moved under the growth team where marketing sits.
So there is a bit more alignment with it.
I think it happens a bit more at, like, product launches.
(17:49):
We try to reutilise the same videos.
There was lots of success with, like, founder stories videos and really bringing in a personalised element to it.
But I definitely think it's a massive area for development for Heights, and for businesses across, because I think there's almost this problem of you have this acquisition persona and you're bringing these customers in thinking you're kind of one thing.
(18:10):
And then you come into this business and you don't actually ever see the ambassadors you signed up with or the really great Instagram personalities.
We've got Hailey who runs our socials and she's absolutely incredible.
She's actually won a couple of awards.
But we don't play her through onto the email stuff as much as we definitely should.
(18:30):
So it's an area for exploration for us definitely going forward.
And we've talked about email a bit and obviously when it comes to retention, you know, retention and email go hand in hand.
But one of the areas that we briefly spoke about when we were talking previously was WhatsApp.
And I suppose one of the things that's kind of exciting and you see in WhatsApp marketing is those founder stories because WhatsApp is a bit more intimate.
(18:58):
You know, I ran a poll in our office recently to see how many people would sign up for WhatsApp marketing and there were four options.
There was, yeah, definitely,
I'd love to hear, you know, get marketing messages from brands that I love and hear about them through WhatsApp.
No, I'm not entirely sure.
(19:18):
WhatsApp is kind of, you know, for friends and family.
No, totally sacrosanct, not touching it.
Friends and family only.
And the final one was, no, I hate marketing.
The developers in the company obviously were all the, no, I hate marketing.
The marketeers were all the, yes, I love marketing.
But actually, you know what, the WhatsApp is sacrosanct for friends and family was the most popular choice.
(19:44):
But I still feel that, you know, that's true, of course, but I still feel that if you have the founders' messages, the founders' videos, et cetera, the founders WhatsAppping, you know, that kind of a thing, it will help with the community-building.
And, you know, it's just maybe a slightly different type of marketing.
I don't know, how do you see it panning out?
(20:06):
I see it as a channel for a certain subsect of customers we probably weren't going to hit through email or SMS. And there's people who are going to want that as their communication channels.
Where I think WhatsApp really shines is in the transactional space and that intimate reminder of, like, your order is coming, do you need to edit it?
(20:29):
We're here to help you directly with customer care if you need it.
There's, like, kind of one place for everything you need to do and it automatically just happens.
So I think it cuts down on a lot of friction that customers have.
What I think we really need to nail is making sure you're not doing everything through every channel.
(20:53):
I don't know if you're, like, American Office fans, but there's, like, a thing where they make woof.com and it's like, you send one thing and it goes to your Facebook, your phone, your fax, your telephone, all of these things.
And we want to make sure that you're not over-communicating with customers, that you make it feel like you're personally communicating with them in the channel that works best for them at the right time.
(21:17):
So I think testing and learning in this new channel is going to be hugely important.
What I would say is I'm kind of taking the lead from our customers again, in the sense that we opened it up as a customer-care channel first for us.
So we didn't have to worry about opt-in preferences or any of that work that was going on.
And again, our head of customer care was incredible at getting this launched quite fast.
(21:39):
And it now makes up 10 per cent of our overall contacts in, like, two months.
So it shows you it's a really growing channel and it's a channel our customers are telling us that they want to be able to use.
So that tells me that there's then a market of customers that are probably...
I haven't been reaching with sales emails.
I may not have been reaching with SMS who might not log into their accounts as much as we might like them to, that this channel might be the right thing.
(22:06):
So I think it's really exciting.
I think we haven't had a new channel in a really long time that has some potential to impact like this, both the transactional and a sales way.
So we're working on our preferences now and hopefully getting it launched.
Yeah.
Yeah.
It's funny how it feels different, you know, like SMS versus WhatsApp.
(22:28):
Like I can't, I was just thinking as you were speaking, I can't remember the last time I had an actual, let's say, back-and-forth conversation over SMS.
Yeah, I think WhatsApp's amazing for CX. Like, it's a brilliant channel.
Customers love it.
I love using it because it feels very conversational and we're all used to being in a WhatsApp group that's bouncing with lots of messages.
(22:53):
It just feels very engaged as long as the CX experience is good, of course.
And you're not, like, sending a WhatsApp in and getting a reply five, six hours later.
Yeah.
But it is very different to SMS. It just feels different.
And I'm not quite sure why that is because, like, for that kind of interaction, it should be fundamentally the same.
(23:16):
Well, I think it's the perception of it, right?
It's an app.
You can choose to have it on your phone or not.
And I think going back to what you said about it being for friends and family, people use it as a communication method.
Whereas I think people are used to SMS being alerts, business alerts now.
I don't have a single family member or friend who isn't either on WhatsApp or iMessaging.
(23:42):
So I know if I get an SMS, 99 per cent of the time now, it's a business and it's muted.
Or it's scam.
Or it's scam, yeah, it's a scam business.
So I think that channel has lost a lot of its power.
It's also really hard for Klaviyo to do attribution to it as well.
(24:04):
So like, being able to actually prove the cost is worth it.
Like, the return on it is a bit, but...
And seeing as you mentioned Klaviyo there, is Klaviyo the tool that you'll be using for WhatsApp marketing, do you think?
Yeah, yeah.
But I presume, like, you're treating it differently from, let's say the customer service, because it would be prohibitively expensive to do customer service...
(24:30):
We're hoping to integrate it all in so that it becomes, like, really conversational for customers and it just becomes really an organic way of contacting, and that we don't feel intrusive.
Like, when we're sending something randomly, it looks like a whole train of conversation.
We segment appropriately.
The beauty of WhatsApp is, well, the potential of WhatsApp is, is that you have to get the personalisation right.
(24:54):
You cannot be blasting them 24/7.
It has to feel again, like it is value add to them in this intimate channel.
Yeah.
If you're in that...
It's a fun test and learn, right?
Like, we're going to learn so much.
Yeah.
If you're in that conversational space with the customer and you might be giving them transaction updates, and then they have a CX query and then they're bouncing back-and-forth and then you're going to put in a marketing message, that marketing message better be relevant, and it better be good, because otherwise it is going to invalidate the channel.
(25:28):
You've taken X and we think this would, like, enhance that versus we sell X.
It's a very different proposition.
And I think customers who communicate through WhatsApp expect that level of personalisation, expect you to anticipate what they need versus just taking a stab at, like, what might stick, like throwing some spaghetti at the wall and seeing what sticks there.
(25:55):
It's going to be a lot of fun to play with.
And you mentioned there, like, honouring customer milestones.
That's a great channel to do that kind of thing through.
Personalised founder video at 12 months through WhatsApp.
How amazing would that be?
That would be, like, awesome.
So easy.
If you can pin your founders down to make the videos.
(26:17):
Listen, Dan is always up for making a video.
And he's brilliant at it, as well.
And it's, you'll rarely meet two founders who are as, like, genuine as Dan and Joel, like, as being passionate about the product, but, like, about making people's lives better.
I don't know if you've heard Dan's, like diary of a CEO podcast, but he lives and breathes Heights.
(26:40):
He's seen the difference that this makes to people's lives because it made a difference to his.
And it's really inspiring to, like, be part of that.
And like, when he tells this story, people listen, which is really exciting.
And it's really great for a retention marketer like myself to be able to have that as part of my toolkit.
It's an alternative to a discount.
(27:00):
Yeah, massively.
And that's really what all retention marketers are trying to achieve because it's not just about reducing churn, it's about maintaining, maintaining revenue, maintaining margin and getting customers to stick because they want to stick.
Not because they've been incentivised to stick.
(27:21):
It's actually, like, where I heard Meghan speak first was at a, on a panel talking about, like, preventing dilution by discount, basically in retention marketing.
One of the curious things, it's not really entirely retention-related,
but I found it interesting, is that I was curious to know whether Heights
(27:41):
treats the frequent one-time purchaser differently in any way to the subscription
purchaser, because I've heard other retention-based businesses talk about the difference
between a one-time purchaser that you just cannot get to subscribe versus a subscription customer.
And Meghan told me that in Heights, there is no one-time purchase option available, which is really interesting.
(28:04):
I mean, is that the first time you've come across that in your career, Meghan?
No, like every subscription business I've been a part of, there's been no one-time purchase.
Even for pet food?
So Tails was only subscription until they moved into retail.
And even then that proposition didn't match because the pet food in the store wasn't personalised, whereas the subscription one was, it's personalised to your dog.
(28:32):
I still feed my dog Tails, if that gives you any indicator of my belief in the company.
And then they moved into having a smaller online store for treats and stuff off of that, but still 99 per cent of the business was subscription-only.
(28:53):
I think that is what good subscription businesses nail down, is that balance between subscription retail and one-time purchase.
And I think Heights has really nailed that so far.
They know that if you want to try something after your subscription, you're far more likely to stay with us and order.
And we can talk to you in the right way about how these things interact and what the benefits you're going to get from them.
(29:20):
And you can try a one-time purchase if you have a subscription.
But the only country we allow OTP in is Germany, as which I'm sure you guys are all aware, German customers are very subscription-averse.
So again, meeting them where they are.
But we haven't seen any acquisition impact from not offering it.
(29:40):
And I think what we also see is a lot of customers don't come back on OTP because you are bouncing around looking for your next fixed and you're not actually invested in changing what you need to change with sticking with one product over time.
I think there's people who like to just bounce around, try a big deal, keep trying different things, but you're very likely not going to find a true science-backed supplement that works if you don't give it the taking daily and taking for three months.
(30:14):
Very good.
I have two more questions.
Maybe we'll fit them both in.
I'm not sure.
We will.
We will.
I have no rush, so...
So the two questions, look, they're both, one of them is an obvious one and the other one is just out of curiosity.
So the first one is acquisition and retention.
(30:34):
How important is the channel mix?
How important, what are the standard indicators, or what do you standardly expect to have happen in retention, based on how you've acquired the customer in the first place?
So that's question number one.
It's a small one.
You do not understand your retention performance if you do not understand your acquisition performance.
(30:56):
And I think that's where a lot of businesses kind of go wrong is assuming that all customers are created equal.
You're created equal in the sense that you're valuable to the business, but you're not created equal in the sense that you're probably, if you're coming in from an affiliate channel, traditionally from what I've seen, you're a far less intent customer than somebody who's searching for a product online.
(31:20):
And those are just the facts, right?
You're going to have acquisition channels that have better CPA, but probably lower retention and maybe lower AOV.
Understanding how all of that fits together, understanding your baselines, and then monthly asking yourself or your commercial partner, how is that acquisition funnel changed?
(31:42):
Are we getting more or less customers from these channels?
And how does that change our underlying retention?
It's hugely important.
Like, removing the noise.
So then you can focus on the things that actually matter to your retention.
That is why any good retention person should be in marketing meetings, understand them and maybe work with your...
(32:04):
Like, I work under our growth director,
so acquisition and retention sit under him.
He has a full end-to-end view, and I can have much better conversations with him about what's going on.
If I'm seeing things impact from this end, okay, I know this type of customer isn't working as they're coming through, or this bundle isn't coming in.
(32:26):
Right now, Heights is mostly Meta-based.
We're moving off of those channels.
But in terms of acquisition, you're not just talking channels, you're talking offer types, right?
So customers coming in on different bundles or from an affiliate, like an ambassador-type of discount.
All of these things play in, but understanding them should always be a retention professional's, like, first port of call, creating those baselines.
(32:51):
And then it allows you to understand the rest of what's going on in your retention world.
Sorry if that sounds like a bit of waffle.
No, no.
Like, I think the thing is, you know, because I work mainly with retailers, so retention and retail for retailers is very, very different.
But you kind of think of, you're just thinking of your subscribers like one big glob.
(33:13):
And then, but in reality, you know, when you're looking at it, you're putting a lot of effort into retention.
Some of which is not hitting your mark at all.
And it might be the case, you know, in the whole burrito side of things, it might be the case that you get, like, out of that large subscriber base that you initially get, the 20 per cent that you should be focusing on, you've entirely missed as a target because you're thinking about all this other 80 per cent.
(33:38):
That obviously makes complete sense.
So as an initial analysis to segment them based on where they came from and then see how they're performing, how that makes us performing.
Even just to give you an idea of, okay, well, look, I can see this one going down,
is there something we need to fix or is that just the nature of it?
I can see this other one does very, very well.
(33:59):
So now for my retention strategy and the churn analysis piece and all of that kind of thing, maybe I'm doing something specific to that there.
And that's where I, because everybody has to focus their time, right?
You've got to prioritise and so on.
Yeah, yeah, very interesting.
I highly recommend as well for any business keeping a, like, holdout control group of, like, five per cent where you don't send them any comms, you don't do, like, anything for them, and you kind of get an idea if the retention goes up or down, if there's anything else in your base that's at play.
(34:33):
That's a super idea.
It isn't, like, fully statistically significant,
but it really allows you to understand there's nothing else that's changed for these customers.
Nothing else is going on.
What is baseline performance?
And if it goes up one month, then you kind of have to ask yourself what has actually impacted that at the front?
And it's made for some really good conversations in my career, like at Tails, especially.
(34:59):
It was the first place, like, we kind of did that with our head of data there,
he was the one who suggested that, but we're doing it now at Heights.
And it's allowed really great conversations for us for really identifying what is going on.
That is a super thought, yeah.
So, and my second question, I've since generated a third question, but I'm not going to get, but my second, we couldn't, it would be remiss...
(35:25):
We would be crucified on a hill if we didn't bring up AI.
I was hoping that we were going to get through, like, a whole podcast episode without talking about AI.
I am not risking crucifixion.
So AI in retention, I presume it has no real application, does it?
(35:48):
I think AI is only as good as what you can actually do with it.
So if you've got a churn model in your background that is, like, really built and is able to identify customers who are going to churn, that's all well and good.
But unless you have a retention professional who can then kind of break that down and say, why are these customers churning?
(36:09):
How are we going to intervene?
You can't just slap some discounts to these customers and hope that they're going to stay.
Again, you're going to start creating a offer-conditioned base and that's not going to work for anybody at all.
So AI is only as good as what the team is able to take the outputs from, is kind of my opinion on it.
(36:32):
We had a great machine-learning data science team at Tails who, like, custom-built us a churn model,
and we were able to identify with pretty great certainty who would be leaving.
But in early-journey, you kind of know that you're going to have those customers anyway.
(36:52):
So where it really needs to come in is later-journey customers,
and that's where most of these aren't really as accurate because that's where you're going to make your biggest kind of difference.
If you can stop these customers while you're working with these, it's huge.
So I think it's got a place, but I think we need to remember that it's not a fix-all,
it's not a Band-Aid.
(37:12):
It's not something that you're just going to, like, Oh, we now know this customer is leaving,
so we're going to be able to save them.
What are you actually going to do about it?
Why are they leaving is still got to be the question?
And I don't think enough businesses are asking themselves that and just slapping a discount on it and saying, all right, well, they were going to leave anyway.
(37:33):
So the same principle as a cancel flow, right?
Like you're going to leave anyway, give them a discount.
Yeah, it still feels to me like, you know, it's the same with data science and, like, a lot of what people talked about with the 360 degree view of the customer and so on.
It always comes back to what are you trying to answer?
You know, what is the question in the first place?
And if you can't come up with the question, maybe you shouldn't be messing around with the tools.
(37:56):
Meghan, that's been such a great conversation.
Thanks a million for joining us today.
Absolutely fascinating.
I love the whole area of retention,
it feels like, it feels like there's such great opportunity.
So many things that are, you know, there's so much potential yet to make use of in retention marketing.
So it's a great place to be.
(38:18):
It is.
Yeah.
If you're somebody who likes learning, retention changes all the time.
So for me, it's like I get to do my favourite things every day, which is, like, help customers and continuously learn.
So I pinch myself.
I'm really lucky to have actually gotten into the field and found where I'm supposed to be.
And I think we were very lucky to have you as a guest today.
(38:39):
So thank you very much, Meghan.
It's been so lovely.
Thanks very much, Meghan.
Talk to you soon.
Thank you.
It's take away time.
God, there was a lot in that, wasn't there?
Yeah.
I think I actually really, really like, I like the whole area of retention.
Just speaks to all of the, you know, the analysis and the tactics and the strategy.
(39:04):
And, you know, even the idea of, as we spoke about just briefly towards the end, identifying where your customers are coming from.
I mean, it makes absolute sense.
But identifying where the customer is coming from, then having a holdout segment where basically you don't do anything with them, so to speak, and they're your benchmark.
(39:25):
And then you say, okay, well, you know, that's what the benchmark is doing.
Here's all this work I've done.
It's a little bit, it's actually a little bit dangerous as well.
Imagine if you, your holdout does way better than everything that you've marketed?
Let's ignore that as a possibility.
But like, look at us, industry practitioners doing proper science.
(39:46):
I know.
Having a control group, measuring the control group, and then seeing what actually happens when you're making other interventions.
And then there was so much.
So you've got inbound, depending on channel, depending on offer, depending on bundle, segmentation, different interventions, continually testing channels.
There's a whole pile in there.
And then there's a whole other layer of, like, really easy learning for everyone, me included on this one.
(40:14):
Some real big ones, like actually segmenting and not offering a standardised discount.
Like, kind of seems fairly obvious.
Meeting customers where they are, using customers' language.
I think some of the stuff around, if you're going to, if you're going to intervene in WhatsApp, be really, really careful.
(40:34):
And really, customers that are engaged, choosing to engage in that channel.
Again, meeting them where they are, using the language that you're picking up from customer service.
I think is, these are just, like, really obvious and relatively easy wins.
Yeah, yeah.
I mean, it goes back to the brilliant basics, you know, of season one.
(40:56):
Brilliant basics of season one and season two and season three fame.
Yeah.
I think it's just like anything in ecommerce,
there's so much you can do.
And I think Meghan was pretty clear on it that you could choose to do, there's an awful lot that you could do -
you need to choose what you are going to do.
You need to look at everything that is on the table, but prioritise.
(41:16):
And, you know, that whole idea of trying to identify where you put your, you know, how you prioritise.
You, even starting by breaking down, trying to break down things.
So break down, like, what my customer group is, then based on, let's say, acquisition channels in the first instance.
Then trying to break down based on, well, are they on order three or on order 10?
(41:40):
Then trying to break down based on, well, have they interacted with us on, let's say, a WhatsApp channel or an email channel and so on and so forth?
And looking at all of these areas.
So breaking down what you have is kind of like, let's say, nearly an auditing-type area.
And then starting to measure what each of those are doing, then deciding, well, where am I going to actually spend my time?
Because, you know, at a starting point, I guess, nurturing the early customers for the first, like, you know, up to the first six months.
(42:07):
The next thing, trying to figure out how to avoid cancellations.
Avoiding cancellations is the first thing, first step, but like up the funnel, ideally, so that it never comes to a point where the customer wants to cancel because you've handled the problems that you've been hearing about by watching what's going on in customer reviews and customer support chats and so on.
(42:27):
But also, as the customer is thinking about leaving anyway, you know, I'm always interested in benchmark stats.
It feels so interesting that only, that for some businesses, they only manage to intervene successfully in five per cent of churn cases.
You know, that feels low.
(42:49):
Five per cent of cancellation flows where they've started and...
Exactly.
So I'm about to cancel and I've only been, you know, I've only had... a successful intervention is where you prevent me from cancelling.
You suggest something else.
Would you like to pause, for example?
Would you like, you know, those things often end in a discount.
Please don't leave us.
We'll give you a discount kind of a thing.
(43:09):
But, you know, obviously you want to avoid that.
But is there other alternatives?
Is there some, what's the issue?
Are we able to help you out with that problem, et cetera?
Avoiding the cancellation in the first place.
There were a couple of other things around that that I quite liked.
I also like this idea of like, when your customers are in that kind of stable phase of not ghosting them and not leaving them so they don't get, they don't suddenly decide to cancel.
(43:36):
So using the acquisition-based content as evergreen content to remind existing customers that, why they've joined.
Why they did it in the first place.
And that replay of benefits piece, really, really, and actually quite deliverable, even if you are stretched for resource and to actually keep those customers engaged.
(43:58):
And the other thing was avoiding, setting and forgetting.
I love that of like, you know, again, engage customers throughout the flow and keep talking to them so that they don't get into that cancellation flow in the first place.
So you're not doing your discount intervention there.
(44:20):
But like, you know, we all take vitamins-ish kind of, you know, we've all gone in and felt slightly off-colour one day on a Saturday, went in and bought a truckload of vitamins, came home, got through them all and then didn't bother doing anything more.
So like, you know, how do you even, how do you hold on to long-term customers, you know?
(44:45):
Because I suppose ideally for a lot of these products, customers are using this for the rest of their life.
Well, like, customers who feel the difference, which is what they talk about.
And that's the thing where your acquisition channel needs to work with your retention channel.
So it's not just about acquiring, and Meghan said it herself, it's not about acquiring all customers because all customers are not created equal.
(45:09):
There are going to be some customers who have that behavioural intention to incorporate the product into their lives, whatever the product is, be it vitamins, be it whatever else that you're selling.
And there'll be other customers who just want to try it.
So understanding the difference between those two and then investing in the ones that really do have intention to use that every day, as opposed to you when you've been out on a Friday and you feel guilty on a Saturday.
(45:33):
Yeah, yeah.
That wouldn't be me, obviously.
I just feel happier on a Saturday.
Yeah, same, I never go out.
Monk.
Father Gordon, brother Gordon.
Brother Gordon.
Brother Gordon, fantastic.
Well, no, I really enjoyed it.
There's so much in there, there's so much in retention in general.
I'm really eager to see what happens with WhatsApp.
(45:55):
I mean, WhatsApp has, I can't remember the exact statistic, but I feel like 93 per cent penetration in Ireland.
Like, it's enormous.
Most people nowadays use WhatsApp and it's so common to have your WhatsApp family groups.
Everyone has it.
Yeah, so it's only the early days of that.
Just be careful.
How's that going to go?
Before it gets all spammy.
Before it gets all spammy.
(46:16):
Before we're getting WhatsApped with whatever it was, you haven't paid your motorway toll, this is, or whatever is the latest scam that's coming through on SMS.
I'm only mentioning that one because that's what I got this week.
A lot of that is, I think, is fairly protected.
And, you know, to a degree, WhatsApp is very easy to do the blocking.
(46:36):
You know, it's kind of harder to reach out to people on WhatsApp if there hasn't been some kind of mutual agreement that I'm going to have that message sent to me.
Well, that gives it some protection.
Even for the marketing perspective, any automations have to be signed off by Facebook or Meta.
I just think you've got to be so, so careful there.
You can very quickly get yourself muted.
(46:59):
Yeah.
And because it's such an intrusively personal channel, if you get it right, it's going to be awesome.
If you get it wrong, then you can forget that relationship with that customer.
Very true.
High stakes stuff.
Yeah.
Yes.
And on that note, thanks so much for joining us, everybody.
Delighted to be back in the saddle again.
(47:20):
Thanks very much, Gordon.
Thanks, Ger.
See you later.
Take care.
Bye-bye.
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 Studio Forty9 and Omnichannel stories, please go to functionalandfabulous.ie. Our sound engineer was Elaine Smith, and 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, the stakes have never been higher...
If you get it wrong, then you can forget that relationship with that customer.
Very true, high stakes stuff.
If your customers are heading for the exit, our guest knows what to do...
(00:25):
We save about 20 per cent of customers going to the cancellation flow.
People who shouldn't be allowed to do science, do science...
But like, look at all those industry practitioners doing proper science.
Our guest asks the big questions...
How often do you as a customer actually get to hear about the difference, what your voice made in a company that you're taking something from?
(00:50):
Gordon considers an alternative approach to customers...
Do you ghost them or do you carry on talking to them?
Ger suggests a career change for Gordon...
Monk.
Father Gordon.
Brother Gordon.
Brother Gordon.
But is it Ger who's in the wrong job?
I hate marketing.
And our guest agrees,
(01:11):
this is our best episode ever...
I am well aware that we are above the industry standard.
This episode of Functional & Fabulous is brought to you with pride by Studio Forty9, retail ecommerce experts, omnichannel growth consultants and cut-through performance marketing specialists.
Studio Forty9, where your digital retail success is built.
(01:35):
Today on Functional & Fabulous, we're joined by someone who lives and breathes customer loyalty.
Meghan Frazier, retention lead at Heights, the science-backed supplement brand for brain and gut health.
Meghan's career started at Wayfair, where she cut her teeth in customer service and helped open their second US contact centre,
an experience that gave her a deep understanding of what great ecommerce and customer experience really means.
(02:00):
From there, she moved on to roles at various pet food companies, including Tails.com, where she honed her superpower, retention strategy that drives sustainable growth.
Now at Heights, Meghan is reimagining what loyalty looks like in the wellness space.
She's passionate about understanding why customers churn and distinguishing can't afford it from don't see the value.
(02:21):
Building systems that keep customers engaged without falling into the trap of endless discounting.
She's also fascinated by the future of retention, AI-driven churn prediction, smarter subscription design and new ways to use WhatsApp for customer engagement.
Meghan, we're delighted to have you here with us today.
You're very, very welcome.
Thank you so much.
That was such a nice intro.
(02:42):
I suppose I'm curious, just as we get started with this, and Gordon continues to laugh at me and my intros.
Do you think that starting out deep in customer service is the best way to understand what customers really value in real time?
And how much does that lead to what you do now in customer retention?
(03:02):
I think I'm biased, having started in customer service and knowing how things work.
But at every company that I've been a part of or joined since as a retention lead, I try to spend some time in CX tickets and really getting to know, not only what our customer is saying, but how do we practically do things?
(03:25):
And I think understanding the mechanisms behind how our deliveries work, where things go, what goes in each box, how are customers contacting us, how do our systems work, allows you to have better conversations about the practical, what can we do to keep customers, rather than this, like, pie in the sky, oh, we should do this.
Well, actually, there's these limitations in the background, how our system works,
(03:48):
so this is going to be a bigger project.
But yeah, I'd highly recommend any retention professional really get grounded in what is customer care in their respective companies?
And it makes you much better at your retention.
Kind of like working on the shop floor, you know, at the C-speed level, going in there and seeing what's really happening on a day-to-day basis.
(04:09):
Yeah, definitely.
And so you still do that at Heights at the moment?
I have access to our Gorgias.
I go in from time to time, look through customer tickets.
We have an amazing customer, head of customer care,
so I spend a lot of time speaking to her about what works for our customers, what doesn't.
We try to use how customers speak in emails, in all of our copy, not emails, in emails or tickets sent in to us.
(04:36):
So we found a lot of success on our cancel flow or our check-in emails by using plain language customers use themselves.
One of my big philosophies in any piece of work I do is meeting customers where they are, rather than trying to force them into something you think that they should be.
(04:57):
And that's where the magic, I think, happens in terms of keeping customers.
That really makes a pile of sense.
It's a very kind of a simple observation, but it's quite an obvious one as well at the same time.
I think for the beginning of an episode, as insights roll in, that's quite a big one for people to take to the bank.
Because very often you find the retention team is a bit disconnected from the CX team.
(05:23):
So what are you trying to do in that retention role is keep customers.
But that seems to be traditionally a marketing function.
And the marketing function disconnected from the actual point-of-service delivery.
Yeah.
And I think retention can become overly brand-led as well.
Like, you're trying to run specifically brand-led messaging initiatives rather than testing what works and leading up to filtering back your information from customer care into brand, again, so that you're speaking in ways and using things that make more sense to customers going forward.
(06:01):
So I highly recommend it.
Everybody should spend time in the tickets.
You don't necessarily have to do them, but read them, understand them, talk to the customer care agents.
I'm in all of the CX channels, customer care channels, on every business I've been in to make sure that I'm seeing if things are popping up.
And a lot of times what seems like a very small issue, if you dig into the data, actually might be a bigger one.
(06:25):
So just really keeping your hand on the pulse of what's going on day-to-day makes you a much better retention professional.
And you mentioned cancellation reasons.
I suppose one of the key things that you're looking at as well in terms of retention is to prevent or redirect cancellation, I suppose, or, you know, divert somebody from cancelling into keeping their subscription.
(06:51):
You know, how valuable have you found it to be working in that area for a business like Heights?
Massively.
I think A, it's a big part of learning.
If you know why your customers are leaving, you can usually fix that higher up in the funnel.
So just understanding your basic cancellation reasons is hugely important.
(07:12):
But cancellation intervention is even more important to a business.
So I say this, I am well aware that we are above the industry standard, but we save about 20 per cent of customers going to the cancellation flow each month.
It's a massive number.
It's bigger than anywhere else I've been before.
(07:34):
And that is because we're constantly testing and learning.
We're testing what discounts work.
We're testing what messaging works.
We're testing what segmentation works.
I think a lot of businesses just apply a one-size-fits-all discount.
And you're offering, you're offer-conditioning customers, essentially, to stay.
They know if they come back, they cancel, they get this discount.
And they just keep going around in this merry-go-round of lovely discounting that you offer them.
(07:59):
But really getting down to the segmentation, addressing issues, offering pause delays, cancel, like cancellations for us.
Some of our supplements aren't pregnancy- and breastfeeding-safe.
Understanding what those customers need in a cancellation journey and then follow up afterwards.
It's all very important.
(08:20):
But yeah, like for us, it's been absolutely massive and helped keeping churn at a better stable rate, or not increasing churn too drastically when you have new customers come in because you're targeting them appropriately with appropriate messaging at what could be their last point of contact with the company.
And so you mentioned, so your kind of churn intervention, we'll call it, is successful at 20 per cent.
(08:49):
Well, this is an area I'm not very familiar with.
What would be the kind of industry average or what are you benchmarking against there?
Other companies I've been at, it's like five to eight.
Okay.
And what do you put down the success?
So you're obviously, I presume you're segmenting for people who just joined and are churning early versus people who should be loyal and, let's say, have had 10 to 15 orders, maybe they've been with you a year or more.
(09:18):
You're, I presume you're looking at those segments differently when it comes to how to divert then, yeah...
Messaging and also making sure that it's commercially the right decision.
I think a cancel flow can become really messy of like, there's some businesses that believe that these customers are going to cancel, so just offer them what you need to offer them and that's fine.
(09:40):
But you actually have a lot of customers who go on to the cancellation flow, especially an early-journey to see how easy it is to cancel.
I've seen that in a lot of user testing across every business that I've been with, people just look to see how easy it is to manage their account.
And then you're offering discounts to customers who don't actually need these discounts going forward.
So it's not actually going to deliver you incremental value.
(10:03):
So being careful with that as well has been really successful for us making sure we're discounting at the right place at the right time after the right visits.
I also put it down to the messaging we're using.
I think a lot of health food companies, and I think pet food as well, can get quite preachy.
We're the best, we're this, we're that.
(10:23):
It's not about that.
It's about the jobs to be done for customers.
How do they want to feel?
What do they want to see in difference?
How do we play it back to them how what we're doing at Heights is going to help them get there?
And we found that not leading with the discount and putting it at the bottom of messaging or even not having it was more successful because we were trying to replay to a customer why they had originally signed up with us.
(10:51):
You want to feel a difference.
Here's what you need to do to feel that difference.
Confident you're going to feel that difference.
Stay on with us and see that.
And it's made a massive difference as well for us.
It's interesting because, yeah, well, actually, it's interesting because I did a quick review of the reviews for Heights.
And one of the things that people talk about is feeling the difference.
(11:13):
And I'm presuming you're just picking up on the language that they're using, but that language also makes its way into your messaging, I guess.
Yeah, everywhere.
And what is difference to customers is like different for different things, right?
With different products and understanding what value you're going to get segmenting these down is also hugely important.
(11:33):
But the cancel flow plays a key part in any good retention strategy.
And I know a lot of businesses are like, well, these customers are low value.
They wouldn't have stayed.
That is not the case for early-journey customers.
If you can intervene and get them over that hump to stay, you're going to end up having an immediate impact on your overall retention and your LTV with more orders in early-journey when customers are more likely to churn.
(12:01):
So I don't think it's, like, low-hanging fruit for a business that they're just, like, really ignoring most of the time.
Yeah.
And how do you, moving on from cancellation, how do you nurture early customers?
You know, so somebody who's just signed up, they got their first month subscription.
Do you have a way, do you have, like, strategies and tactics for nurturing those people along, let's say the first, until they get to order number six?
(12:30):
I'm... like, I've noticed it sometimes in the past with other subscription businesses, you know, there's a number, like a sweet spot number, after which you don't have to worry about them churning for a while.
You ghost them, essentially.
Yeah, that was the question I was going to ask of, of how do you get from that point where you've acquired a customer, the customer is obviously looking like they're going to, they're going to remain with you for a period of time.
(13:01):
Do you ghost them?
Or do you carry on talking to them?
And that's, that's a real dilemma, I think, for some retention managers, like, at what point do you leave alone versus at what point do you intervene?
So I think it comes down to capacity for most retention managers, leads, heads of where do you spend most of your energy testing and learning?
(13:25):
And most people end up doing in months one to three, because that's usually your highest churn point for customers.
And it's your highest pot of customers because their acquisition is bringing customers in constantly.
I think how I've tried to mitigate that at Heights as well, because again, we're still in kind of startup phase, we're new, and we may be doing 25 million in ARR, but we're still running a really stealth business.
(13:52):
Dan and Joel, our founders, are really passionate about making sure that the team is sustained growth is, like, the business is sustained growth, as well as our customer base.
And we work with an email agency.
And what we try to do is use our acquisition emails as evergreen emails for our current base as well.
(14:16):
So sometimes what we'll do instead of segmenting down a sales email for, say, our biotic product, we will still send it to people who take biotic.
And it's replaying to them all the benefits, what they see from it, why they may have started it, what they'd be looking for from it.
(14:37):
And you see no churn from it, but you're still building that brand value.
You're still speaking to customers.
You're reminding them, but you're doing it in a more nimble way.
I think a lot of businesses have a tendency to exclude existing customers from those types of comms.
And for us, they've been really great in terms of either getting customers back on the site to upsell additional products or to try to help strengthen retention in a period where we might have traditionally ghosted them after.
(15:08):
We're working on building out more nurture journeys for months two and three.
I think, again, most people do onboarding and kind of set it and forget it and then hope that you have the impact over time.
So we're working on more of that as well.
And again, more customer language of what do you want to see by this point in your journey, I think is hugely important as well.
(15:29):
And we're looking at more how do we honour customer milestones?
You've been with us a year,
what do we do to really honour that?
And then the other big thing that I think a lot of businesses forget is celebrating when you've put customer voice into your experience.
So we have the most amazing product development team at Heights.
(15:50):
What we do on the retention side, we couldn't do without them because they bring out actually really great things.
But that includes packaging.
So we heard from everybody that we were sending way too many packages.
We were sending way too much cardboard.
And they've completely redesigned that.
And we've made sure to make Instagram videos, email customers, really celebrate the fact that what their feedback has done has led to change in the business.
(16:15):
Businesses send out surveys all the time.
But how often do you as a customer actually get to hear about the difference, what your voice made in a company that you're taking something from?
I think it builds brand loyalty in a really different way than even the product does itself.
Yeah, I think that would build a strong tissue of brand loyalty.
(16:35):
And because you've got a community, you've got, like, a feedback loop.
And also, at the end of the day, that's something that people genuinely care about.
And it's a real pleasure to see, let's say, packaging that you feel is clever with intent, you know, to reduce packaging, to reduce cardboard and so on.
We're all conscious of that nowadays.
(16:56):
I quite like the idea of 'You said, we did'.
I think that's... because for an individual customer, if they were the customer that gave that feedback, it will feel quite personal.
There's quite a lot to take away there.
You mentioned also that you talked about that on Instagram and across social channels.
So how do you kind of coordinate between the retention activity that you're doing and the broader comms that are going out across social media, other media mechanisms that you're using?
(17:27):
Yeah.
It's not always, like, super-aligned.
Our social media channels are primarily acquisition-based at the moment and are that side of the marketing team there.
Retention at Heights has just moved under the growth team where marketing sits.
So there is a bit more alignment with it.
I think it happens a bit more at, like, product launches.
(17:49):
We try to reutilise the same videos.
There was lots of success with, like, founder stories videos and really bringing in a personalised element to it.
But I definitely think it's a massive area for development for Heights, and for businesses across, because I think there's almost this problem of you have this acquisition persona and you're bringing these customers in thinking you're kind of one thing.
(18:10):
And then you come into this business and you don't actually ever see the ambassadors you signed up with or the really great Instagram personalities.
We've got Hailey who runs our socials and she's absolutely incredible.
She's actually won a couple of awards.
But we don't play her through onto the email stuff as much as we definitely should.
(18:30):
So it's an area for exploration for us definitely going forward.
And we've talked about email a bit and obviously when it comes to retention, you know, retention and email go hand in hand.
But one of the areas that we briefly spoke about when we were talking previously was WhatsApp.
And I suppose one of the things that's kind of exciting and you see in WhatsApp marketing is those founder stories because WhatsApp is a bit more intimate.
(18:58):
You know, I ran a poll in our office recently to see how many people would sign up for WhatsApp marketing and there were four options.
There was, yeah, definitely,
I'd love to hear, you know, get marketing messages from brands that I love and hear about them through WhatsApp.
No, I'm not entirely sure.
(19:18):
WhatsApp is kind of, you know, for friends and family.
No, totally sacrosanct, not touching it.
Friends and family only.
And the final one was, no, I hate marketing.
The developers in the company obviously were all the, no, I hate marketing.
The marketeers were all the, yes, I love marketing.
But actually, you know what, the WhatsApp is sacrosanct for friends and family was the most popular choice.
(19:44):
But I still feel that, you know, that's true, of course, but I still feel that if you have the founders' messages, the founders' videos, et cetera, the founders WhatsAppping, you know, that kind of a thing, it will help with the community-building.
And, you know, it's just maybe a slightly different type of marketing.
I don't know, how do you see it panning out?
(20:06):
I see it as a channel for a certain subsect of customers we probably weren't going to hit through email or SMS. And there's people who are going to want that as their communication channels.
Where I think WhatsApp really shines is in the transactional space and that intimate reminder of, like, your order is coming, do you need to edit it?
(20:29):
We're here to help you directly with customer care if you need it.
There's, like, kind of one place for everything you need to do and it automatically just happens.
So I think it cuts down on a lot of friction that customers have.
What I think we really need to nail is making sure you're not doing everything through every channel.
(20:53):
I don't know if you're, like, American Office fans, but there's, like, a thing where they make woof.com and it's like, you send one thing and it goes to your Facebook, your phone, your fax, your telephone, all of these things.
And we want to make sure that you're not over-communicating with customers, that you make it feel like you're personally communicating with them in the channel that works best for them at the right time.
(21:17):
So I think testing and learning in this new channel is going to be hugely important.
What I would say is I'm kind of taking the lead from our customers again, in the sense that we opened it up as a customer-care channel first for us.
So we didn't have to worry about opt-in preferences or any of that work that was going on.
And again, our head of customer care was incredible at getting this launched quite fast.
(21:39):
And it now makes up 10 per cent of our overall contacts in, like, two months.
So it shows you it's a really growing channel and it's a channel our customers are telling us that they want to be able to use.
So that tells me that there's then a market of customers that are probably...
I haven't been reaching with sales emails.
I may not have been reaching with SMS who might not log into their accounts as much as we might like them to, that this channel might be the right thing.
(22:06):
So I think it's really exciting.
I think we haven't had a new channel in a really long time that has some potential to impact like this, both the transactional and a sales way.
So we're working on our preferences now and hopefully getting it launched.
Yeah.
Yeah.
It's funny how it feels different, you know, like SMS versus WhatsApp.
(22:28):
Like I can't, I was just thinking as you were speaking, I can't remember the last time I had an actual, let's say, back-and-forth conversation over SMS.
Yeah, I think WhatsApp's amazing for CX. Like, it's a brilliant channel.
Customers love it.
I love using it because it feels very conversational and we're all used to being in a WhatsApp group that's bouncing with lots of messages.
(22:53):
It just feels very engaged as long as the CX experience is good, of course.
And you're not, like, sending a WhatsApp in and getting a reply five, six hours later.
Yeah.
But it is very different to SMS. It just feels different.
And I'm not quite sure why that is because, like, for that kind of interaction, it should be fundamentally the same.
(23:16):
Well, I think it's the perception of it, right?
It's an app.
You can choose to have it on your phone or not.
And I think going back to what you said about it being for friends and family, people use it as a communication method.
Whereas I think people are used to SMS being alerts, business alerts now.
I don't have a single family member or friend who isn't either on WhatsApp or iMessaging.
(23:42):
So I know if I get an SMS, 99 per cent of the time now, it's a business and it's muted.
Or it's scam.
Or it's scam, yeah, it's a scam business.
So I think that channel has lost a lot of its power.
It's also really hard for Klaviyo to do attribution to it as well.
(24:04):
So like, being able to actually prove the cost is worth it.
Like, the return on it is a bit, but...
And seeing as you mentioned Klaviyo there, is Klaviyo the tool that you'll be using for WhatsApp marketing, do you think?
Yeah, yeah.
But I presume, like, you're treating it differently from, let's say the customer service, because it would be prohibitively expensive to do customer service...
(24:30):
We're hoping to integrate it all in so that it becomes, like, really conversational for customers and it just becomes really an organic way of contacting, and that we don't feel intrusive.
Like, when we're sending something randomly, it looks like a whole train of conversation.
We segment appropriately.
The beauty of WhatsApp is, well, the potential of WhatsApp is, is that you have to get the personalisation right.
(24:54):
You cannot be blasting them 24/7.
It has to feel again, like it is value add to them in this intimate channel.
Yeah.
If you're in that...
It's a fun test and learn, right?
Like, we're going to learn so much.
Yeah.
If you're in that conversational space with the customer and you might be giving them transaction updates, and then they have a CX query and then they're bouncing back-and-forth and then you're going to put in a marketing message, that marketing message better be relevant, and it better be good, because otherwise it is going to invalidate the channel.
(25:28):
You've taken X and we think this would, like, enhance that versus we sell X.
It's a very different proposition.
And I think customers who communicate through WhatsApp expect that level of personalisation, expect you to anticipate what they need versus just taking a stab at, like, what might stick, like throwing some spaghetti at the wall and seeing what sticks there.
(25:55):
It's going to be a lot of fun to play with.
And you mentioned there, like, honouring customer milestones.
That's a great channel to do that kind of thing through.
Personalised founder video at 12 months through WhatsApp.
How amazing would that be?
That would be, like, awesome.
So easy.
If you can pin your founders down to make the videos.
(26:17):
Listen, Dan is always up for making a video.
And he's brilliant at it, as well.
And it's, you'll rarely meet two founders who are as, like, genuine as Dan and Joel, like, as being passionate about the product, but, like, about making people's lives better.
I don't know if you've heard Dan's, like diary of a CEO podcast, but he lives and breathes Heights.
(26:40):
He's seen the difference that this makes to people's lives because it made a difference to his.
And it's really inspiring to, like, be part of that.
And like, when he tells this story, people listen, which is really exciting.
And it's really great for a retention marketer like myself to be able to have that as part of my toolkit.
It's an alternative to a discount.
(27:00):
Yeah, massively.
And that's really what all retention marketers are trying to achieve because it's not just about reducing churn, it's about maintaining, maintaining revenue, maintaining margin and getting customers to stick because they want to stick.
Not because they've been incentivised to stick.
(27:21):
It's actually, like, where I heard Meghan speak first was at a, on a panel talking about, like, preventing dilution by discount, basically in retention marketing.
One of the curious things, it's not really entirely retention-related,
but I found it interesting, is that I was curious to know whether Heights
(27:41):
treats the frequent one-time purchaser differently in any way to the subscription
purchaser, because I've heard other retention-based businesses talk about the difference
between a one-time purchaser that you just cannot get to subscribe versus a subscription customer.
And Meghan told me that in Heights, there is no one-time purchase option available, which is really interesting.
(28:04):
I mean, is that the first time you've come across that in your career, Meghan?
No, like every subscription business I've been a part of, there's been no one-time purchase.
Even for pet food?
So Tails was only subscription until they moved into retail.
And even then that proposition didn't match because the pet food in the store wasn't personalised, whereas the subscription one was, it's personalised to your dog.
(28:32):
I still feed my dog Tails, if that gives you any indicator of my belief in the company.
And then they moved into having a smaller online store for treats and stuff off of that, but still 99 per cent of the business was subscription-only.
(28:53):
I think that is what good subscription businesses nail down, is that balance between subscription retail and one-time purchase.
And I think Heights has really nailed that so far.
They know that if you want to try something after your subscription, you're far more likely to stay with us and order.
And we can talk to you in the right way about how these things interact and what the benefits you're going to get from them.
(29:20):
And you can try a one-time purchase if you have a subscription.
But the only country we allow OTP in is Germany, as which I'm sure you guys are all aware, German customers are very subscription-averse.
So again, meeting them where they are.
But we haven't seen any acquisition impact from not offering it.
(29:40):
And I think what we also see is a lot of customers don't come back on OTP because you are bouncing around looking for your next fixed and you're not actually invested in changing what you need to change with sticking with one product over time.
I think there's people who like to just bounce around, try a big deal, keep trying different things, but you're very likely not going to find a true science-backed supplement that works if you don't give it the taking daily and taking for three months.
(30:14):
Very good.
I have two more questions.
Maybe we'll fit them both in.
I'm not sure.
We will.
We will.
I have no rush, so...
So the two questions, look, they're both, one of them is an obvious one and the other one is just out of curiosity.
So the first one is acquisition and retention.
(30:34):
How important is the channel mix?
How important, what are the standard indicators, or what do you standardly expect to have happen in retention, based on how you've acquired the customer in the first place?
So that's question number one.
It's a small one.
You do not understand your retention performance if you do not understand your acquisition performance.
(30:56):
And I think that's where a lot of businesses kind of go wrong is assuming that all customers are created equal.
You're created equal in the sense that you're valuable to the business, but you're not created equal in the sense that you're probably, if you're coming in from an affiliate channel, traditionally from what I've seen, you're a far less intent customer than somebody who's searching for a product online.
(31:20):
And those are just the facts, right?
You're going to have acquisition channels that have better CPA, but probably lower retention and maybe lower AOV.
Understanding how all of that fits together, understanding your baselines, and then monthly asking yourself or your commercial partner, how is that acquisition funnel changed?
(31:42):
Are we getting more or less customers from these channels?
And how does that change our underlying retention?
It's hugely important.
Like, removing the noise.
So then you can focus on the things that actually matter to your retention.
That is why any good retention person should be in marketing meetings, understand them and maybe work with your...
(32:04):
Like, I work under our growth director,
so acquisition and retention sit under him.
He has a full end-to-end view, and I can have much better conversations with him about what's going on.
If I'm seeing things impact from this end, okay, I know this type of customer isn't working as they're coming through, or this bundle isn't coming in.
(32:26):
Right now, Heights is mostly Meta-based.
We're moving off of those channels.
But in terms of acquisition, you're not just talking channels, you're talking offer types, right?
So customers coming in on different bundles or from an affiliate, like an ambassador-type of discount.
All of these things play in, but understanding them should always be a retention professional's, like, first port of call, creating those baselines.
(32:51):
And then it allows you to understand the rest of what's going on in your retention world.
Sorry if that sounds like a bit of waffle.
No, no.
Like, I think the thing is, you know, because I work mainly with retailers, so retention and retail for retailers is very, very different.
But you kind of think of, you're just thinking of your subscribers like one big glob.
(33:13):
And then, but in reality, you know, when you're looking at it, you're putting a lot of effort into retention.
Some of which is not hitting your mark at all.
And it might be the case, you know, in the whole burrito side of things, it might be the case that you get, like, out of that large subscriber base that you initially get, the 20 per cent that you should be focusing on, you've entirely missed as a target because you're thinking about all this other 80 per cent.
(33:38):
That obviously makes complete sense.
So as an initial analysis to segment them based on where they came from and then see how they're performing, how that makes us performing.
Even just to give you an idea of, okay, well, look, I can see this one going down,
is there something we need to fix or is that just the nature of it?
I can see this other one does very, very well.
(33:59):
So now for my retention strategy and the churn analysis piece and all of that kind of thing, maybe I'm doing something specific to that there.
And that's where I, because everybody has to focus their time, right?
You've got to prioritise and so on.
Yeah, yeah, very interesting.
I highly recommend as well for any business keeping a, like, holdout control group of, like, five per cent where you don't send them any comms, you don't do, like, anything for them, and you kind of get an idea if the retention goes up or down, if there's anything else in your base that's at play.
(34:33):
That's a super idea.
It isn't, like, fully statistically significant,
but it really allows you to understand there's nothing else that's changed for these customers.
Nothing else is going on.
What is baseline performance?
And if it goes up one month, then you kind of have to ask yourself what has actually impacted that at the front?
And it's made for some really good conversations in my career, like at Tails, especially.
(34:59):
It was the first place, like, we kind of did that with our head of data there,
he was the one who suggested that, but we're doing it now at Heights.
And it's allowed really great conversations for us for really identifying what is going on.
That is a super thought, yeah.
So, and my second question, I've since generated a third question, but I'm not going to get, but my second, we couldn't, it would be remiss...
(35:25):
We would be crucified on a hill if we didn't bring up AI.
I was hoping that we were going to get through, like, a whole podcast episode without talking about AI.
I am not risking crucifixion.
So AI in retention, I presume it has no real application, does it?
(35:48):
I think AI is only as good as what you can actually do with it.
So if you've got a churn model in your background that is, like, really built and is able to identify customers who are going to churn, that's all well and good.
But unless you have a retention professional who can then kind of break that down and say, why are these customers churning?
(36:09):
How are we going to intervene?
You can't just slap some discounts to these customers and hope that they're going to stay.
Again, you're going to start creating a offer-conditioned base and that's not going to work for anybody at all.
So AI is only as good as what the team is able to take the outputs from, is kind of my opinion on it.
(36:32):
We had a great machine-learning data science team at Tails who, like, custom-built us a churn model,
and we were able to identify with pretty great certainty who would be leaving.
But in early-journey, you kind of know that you're going to have those customers anyway.
(36:52):
So where it really needs to come in is later-journey customers,
and that's where most of these aren't really as accurate because that's where you're going to make your biggest kind of difference.
If you can stop these customers while you're working with these, it's huge.
So I think it's got a place, but I think we need to remember that it's not a fix-all,
it's not a Band-Aid.
(37:12):
It's not something that you're just going to, like, Oh, we now know this customer is leaving,
so we're going to be able to save them.
What are you actually going to do about it?
Why are they leaving is still got to be the question?
And I don't think enough businesses are asking themselves that and just slapping a discount on it and saying, all right, well, they were going to leave anyway.
(37:33):
So the same principle as a cancel flow, right?
Like you're going to leave anyway, give them a discount.
Yeah, it still feels to me like, you know, it's the same with data science and, like, a lot of what people talked about with the 360 degree view of the customer and so on.
It always comes back to what are you trying to answer?
You know, what is the question in the first place?
And if you can't come up with the question, maybe you shouldn't be messing around with the tools.
(37:56):
Meghan, that's been such a great conversation.
Thanks a million for joining us today.
Absolutely fascinating.
I love the whole area of retention,
it feels like, it feels like there's such great opportunity.
So many things that are, you know, there's so much potential yet to make use of in retention marketing.
So it's a great place to be.
(38:18):
It is.
Yeah.
If you're somebody who likes learning, retention changes all the time.
So for me, it's like I get to do my favourite things every day, which is, like, help customers and continuously learn.
So I pinch myself.
I'm really lucky to have actually gotten into the field and found where I'm supposed to be.
And I think we were very lucky to have you as a guest today.
(38:39):
So thank you very much, Meghan.
It's been so lovely.
Thanks very much, Meghan.
Talk to you soon.
Thank you.
It's take away time.
God, there was a lot in that, wasn't there?
Yeah.
I think I actually really, really like, I like the whole area of retention.
Just speaks to all of the, you know, the analysis and the tactics and the strategy.
(39:04):
And, you know, even the idea of, as we spoke about just briefly towards the end, identifying where your customers are coming from.
I mean, it makes absolute sense.
But identifying where the customer is coming from, then having a holdout segment where basically you don't do anything with them, so to speak, and they're your benchmark.
(39:25):
And then you say, okay, well, you know, that's what the benchmark is doing.
Here's all this work I've done.
It's a little bit, it's actually a little bit dangerous as well.
Imagine if you, your holdout does way better than everything that you've marketed?
Let's ignore that as a possibility.
But like, look at us, industry practitioners doing proper science.
(39:46):
I know.
Having a control group, measuring the control group, and then seeing what actually happens when you're making other interventions.
And then there was so much.
So you've got inbound, depending on channel, depending on offer, depending on bundle, segmentation, different interventions, continually testing channels.
There's a whole pile in there.
And then there's a whole other layer of, like, really easy learning for everyone, me included on this one.
(40:14):
Some real big ones, like actually segmenting and not offering a standardised discount.
Like, kind of seems fairly obvious.
Meeting customers where they are, using customers' language.
I think some of the stuff around, if you're going to, if you're going to intervene in WhatsApp, be really, really careful.
(40:34):
And really, customers that are engaged, choosing to engage in that channel.
Again, meeting them where they are, using the language that you're picking up from customer service.
I think is, these are just, like, really obvious and relatively easy wins.
Yeah, yeah.
I mean, it goes back to the brilliant basics, you know, of season one.
(40:56):
Brilliant basics of season one and season two and season three fame.
Yeah.
I think it's just like anything in ecommerce,
there's so much you can do.
And I think Meghan was pretty clear on it that you could choose to do, there's an awful lot that you could do -
you need to choose what you are going to do.
You need to look at everything that is on the table, but prioritise.
(41:16):
And, you know, that whole idea of trying to identify where you put your, you know, how you prioritise.
You, even starting by breaking down, trying to break down things.
So break down, like, what my customer group is, then based on, let's say, acquisition channels in the first instance.
Then trying to break down based on, well, are they on order three or on order 10?
(41:40):
Then trying to break down based on, well, have they interacted with us on, let's say, a WhatsApp channel or an email channel and so on and so forth?
And looking at all of these areas.
So breaking down what you have is kind of like, let's say, nearly an auditing-type area.
And then starting to measure what each of those are doing, then deciding, well, where am I going to actually spend my time?
Because, you know, at a starting point, I guess, nurturing the early customers for the first, like, you know, up to the first six months.
(42:07):
The next thing, trying to figure out how to avoid cancellations.
Avoiding cancellations is the first thing, first step, but like up the funnel, ideally, so that it never comes to a point where the customer wants to cancel because you've handled the problems that you've been hearing about by watching what's going on in customer reviews and customer support chats and so on.
(42:27):
But also, as the customer is thinking about leaving anyway, you know, I'm always interested in benchmark stats.
It feels so interesting that only, that for some businesses, they only manage to intervene successfully in five per cent of churn cases.
You know, that feels low.
(42:49):
Five per cent of cancellation flows where they've started and...
Exactly.
So I'm about to cancel and I've only been, you know, I've only had... a successful intervention is where you prevent me from cancelling.
You suggest something else.
Would you like to pause, for example?
Would you like, you know, those things often end in a discount.
Please don't leave us.
We'll give you a discount kind of a thing.
(43:09):
But, you know, obviously you want to avoid that.
But is there other alternatives?
Is there some, what's the issue?
Are we able to help you out with that problem, et cetera?
Avoiding the cancellation in the first place.
There were a couple of other things around that that I quite liked.
I also like this idea of like, when your customers are in that kind of stable phase of not ghosting them and not leaving them so they don't get, they don't suddenly decide to cancel.
(43:36):
So using the acquisition-based content as evergreen content to remind existing customers that, why they've joined.
Why they did it in the first place.
And that replay of benefits piece, really, really, and actually quite deliverable, even if you are stretched for resource and to actually keep those customers engaged.
(43:58):
And the other thing was avoiding, setting and forgetting.
I love that of like, you know, again, engage customers throughout the flow and keep talking to them so that they don't get into that cancellation flow in the first place.
So you're not doing your discount intervention there.
(44:20):
But like, you know, we all take vitamins-ish kind of, you know, we've all gone in and felt slightly off-colour one day on a Saturday, went in and bought a truckload of vitamins, came home, got through them all and then didn't bother doing anything more.
So like, you know, how do you even, how do you hold on to long-term customers, you know?
(44:45):
Because I suppose ideally for a lot of these products, customers are using this for the rest of their life.
Well, like, customers who feel the difference, which is what they talk about.
And that's the thing where your acquisition channel needs to work with your retention channel.
So it's not just about acquiring, and Meghan said it herself, it's not about acquiring all customers because all customers are not created equal.
(45:09):
There are going to be some customers who have that behavioural intention to incorporate the product into their lives, whatever the product is, be it vitamins, be it whatever else that you're selling.
And there'll be other customers who just want to try it.
So understanding the difference between those two and then investing in the ones that really do have intention to use that every day, as opposed to you when you've been out on a Friday and you feel guilty on a Saturday.
(45:33):
Yeah, yeah.
That wouldn't be me, obviously.
I just feel happier on a Saturday.
Yeah, same, I never go out.
Monk.
Father Gordon, brother Gordon.
Brother Gordon.
Brother Gordon, fantastic.
Well, no, I really enjoyed it.
There's so much in there, there's so much in retention in general.
I'm really eager to see what happens with WhatsApp.
(45:55):
I mean, WhatsApp has, I can't remember the exact statistic, but I feel like 93 per cent penetration in Ireland.
Like, it's enormous.
Most people nowadays use WhatsApp and it's so common to have your WhatsApp family groups.
Everyone has it.
Yeah, so it's only the early days of that.
Just be careful.
How's that going to go?
Before it gets all spammy.
Before it gets all spammy.
(46:16):
Before we're getting WhatsApped with whatever it was, you haven't paid your motorway toll, this is, or whatever is the latest scam that's coming through on SMS.
I'm only mentioning that one because that's what I got this week.
A lot of that is, I think, is fairly protected.
And, you know, to a degree, WhatsApp is very easy to do the blocking.
(46:36):
You know, it's kind of harder to reach out to people on WhatsApp if there hasn't been some kind of mutual agreement that I'm going to have that message sent to me.
Well, that gives it some protection.
Even for the marketing perspective, any automations have to be signed off by Facebook or Meta.
I just think you've got to be so, so careful there.
You can very quickly get yourself muted.
(46:59):
Yeah.
And because it's such an intrusively personal channel, if you get it right, it's going to be awesome.
If you get it wrong, then you can forget that relationship with that customer.
Very true.
High stakes stuff.
Yeah.
Yes.
And on that note, thanks so much for joining us, everybody.
Delighted to be back in the saddle again.
(47:20):
Thanks very much, Gordon.
Thanks, Ger.
See you later.
Take care.
Bye-bye.
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 Studio Forty9 and Omnichannel stories, please go to functionalandfabulous.ie. Our sound engineer was Elaine Smith, and the show was produced by Roger Overall.
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