How do you keep your customers coming back to your store again and again and keep them interested in buying more from you? Enter subscriptions! By adding a subscription model to your store, you can increase your customer retention rate while also building loyalty for your business. This week on the podcast we’re talking with Chathri Ali, COO of ReCharge on all things subscriptions.
Chathri Ali is the Chief Operating Officer for ReCharge, the leading subscription billing platform designed for physical subscription goods.
She currently oversees our remote sales, marketing, customer success and people operations teams. Her main focus has been to scale the remote-first company rapidly and efficiently, while focusing on a culture of operational excellence.
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- [03:22] Surprise, we have a blast from the past
- [06:04] Who is Chathri Ali
- [07:15] What is ReCharge?
- [08:50] Why subscriptions?
- [10:34] Are subscriptions for everybody?
- [13:00] Aha moments with subscriptions
- [15:12] What type of subscriptions are there?
- [18:13] What makes a subscription business successful?
- [20:29] How to manage subscription retention
- [22:02] Favorite ReCharge stores
- [24:31] Where we can find Chathri on the internet
- [28:32] Store shoutouts
How do you keep your customers coming back to your store again and again, and keep them interested in buying more from you? Enter subscriptions. By adding a subscription model to your store, you can increase your customer retention rate while also building loyalty for your business. This week on the podcast, we're talking with Chathri Ali, COO of ReCharge, on all things subscriptions. Let's dig in.
Welcome to Commerce Tea, a podcast to help you succeed on Shopify. I'm Rhian.
And I'm Kelly. Grab a mug and join us as we talk about all things commerce.
Hey Kelly, how can merchants leverage customer data to drive more revenue and increase retention? How could they create personalized experiences customers love.
I recommend Octane AI, the leading buyer profile platform for Shopify and Shopify Plus merchants.
How does it work?
Octane AI features a shop quiz, Facebook Messenger and SMS, and opt-in tools. Using the shop quiz, merchants can get to know customers with interactive questions. From product recommenders to gift finders, you can learn about a customers needs, preferences, pain points, and more. This information gets saved into buyer profiles, and you can sync your buyer profile data with your Facebook Messenger, SMS, email and ad campaigns for personalized customer journeys.
What kind of returns can brands expect?
Brands using the shop quiz have increased email signups by 16 times and driven a 28% increase in average order value. Facebook Messenger and SMS see 80 to 95% average open rates and drive up to a 20% increase in revenue. Better yet, Octane AI has plans for any sized business and offers a 14-day free trial. Every plan gives you access to the shop quiz, Facebook Messenger, SMS, and opt-in tools. There are also plans available where Octane AI's experts will help you set up and optimize your tools for success.
It sounds great. Where can merchants go to learn more?
You can learn more, book a demo or try it free at join.octaneai.com/commercetea. Again, that's join.octaneai.com/commercetea.
Hello, Rhian. How are you on this fine Tuesday?
I am doing phenomenally on this Tuesday that is fine. How about you?
It is quite a fine Tuesday. I don't know. I don't have many other words to describe it. I'm getting back into the swing of things.
Yes, still, still. It's amazing how long it takes after that stop to get going.
It's not like a zero to 100.
I just aggressively said yes, but I guess that's just how I feel.
Yeah. We're one week in, two weeks in, an amount of weeks in, and I still feel like I'm at 30% capacity.
Oh, for sure. For sure. Yeah. I'm thankful for a team that is able to pick things up and immediately hit the ground running while I'm just like, "What do I do with my hands?"
Like, "La la la." Yeah. Same. Same. My team's totally holding it together.
So, we have a bit of a confession to make.
Yeah, we do.
2020 was quite a year.
As we know. I think we can all agree on this.
That's not a surprise. That's not the confession. We had a year. We recorded a lot of podcast episodes with guests last year that we are just now realizing that we never actually published. So, this is one of those episodes. I'm really excited for this one because I am a big fan of subscription models. So, I'm talking your typical subscribe and save, build a box and a monthly box subscription model, or a membership model. There's so many things that you can do with this. I will preface this. So, we're talking with Chathri Ali from ReCharge. This episode was recorded before Shopify released the update to allow native subscriptions in Shopify's checkout. So, if there are any references to the old checkout behavior, which honestly I cannot remember, but I don't see it in any of our questions, but it could have come up, just a heads up that ReCharge now actually directly integrates with Shopify's checkout so you don't have a separate checkout flow.
The features of it are still being built out. If you're on Shopify Plus it means you can't customize your checkout right now, but that checkout upgrade's going to be happening in February, I believe, either end of January or early February. I don't remember exactly when. I've only received six emails on it, but end of year or two weeks off, this is what happens. But we love Chathri and so we're really excited to actually release this interview, finally.
Yeah. This is great. We've both known Chathri for a long time. She's phenomenal. She's another leader in the Shopify ecosystem, which is awesome that there are more women leaders and she's just rad.
Yeah. So, let's do it. Let's go.
Today we are joined by Chathri Ali, COO of ReCharge, which is the platform powering some of the largest subscription brands in commerce. Chathri, how are you doing today?
Doing great. [inaudible 00:05:37] How are you guys?
Good. Thanks so much for joining us. I am obviously a very big fan of ReCharge. ReCharge is one of our closest relationships with The Taproom. So, really big fan of subscriptions. Really big fan of everything you're all doing at ReCharge.
So, let's kick things off by just learning more about you. So, tell us about who you are and then give us a little overview of ReCharge as well.
Yeah. So, I've been at ReCharge for over three and a half years. I actually started out in 2016 as a director of marketing, so not even close to what I'm doing now, and from director of marketing transitioned into more of a sales role and quickly grew that team out. It's now what's called the growth team, which is sales, solutions engineering partnerships. From the growth that we've had there, the company obviously has evolved as well and I'm now in a new role, which is COO. I now oversee four teams. So, not only sales and partnerships, but also the marketing team, the customer success team and our people ops team. So, basically everything not product and engineering, which is what our CEO and CTO cover.
I love hearing that growth story. Full disclosure to everyone, I've known Chathri since she joined the ReCharge team, and she has been phenomenal and pivotal to their continued growth and success, in my opinion. So, thank you so much for joining us today. We appreciate you. We think your product is awesome. Do you want to tell us more about ReCharge?
Yeah. Like I said, since I've been here for more than three and a half years, I've seen the journey and how we've evolved. Originally we were an app in the Shopify app store and pretty plug and play. We powered the product detail page for a plugin, essentially where it could be very easy for any product, really, a consumable product to be now sold on subscription. So, for folks who were using back then, it was pretty straightforward. Now, as we've evolved, we've actually added several elements into what was an app and now I call it a platform because it's really powerful, what's possible using ReCharge.
We've launched the ReCharge API. So, now developers and developer agencies like The Taproom can use ReCharge and really flex it and break it down and build it back up again, depending on the merchant and depending on the subscription experience they want to build, right? So, we have not created a one size fits all approach. It's actually the inverse of that. We essentially say, "Hey, we're making our API available and open. Use it as you see fit." Or if you're a smaller merchant and you're just starting out and you're incubating the subscription idea, you can still use the base use case of the app, which is the more straightforward.
So, ReCharge only does subscriptions. There are many areas you could have decided to focus on here, just ReCharge in general could have focused on. Why subscriptions?
Yeah. So, I mean, if you think about it, we all are online shoppers, of course, right? If you are trying out a new brand, you're essentially psychologically taking a leap of faith, right? You're saying, "Hey, I'm going to try you out. I'm going to see how you as a brand reflect either what my needs are, my values," right? If it's a fashion brand you can buy a t-shirt anywhere, but why XYZ brand, right? So, for us, we're thinking about, "Okay, if it's like a risk, how do you change the psychology of that risk," right? You want to empower a buyer to perhaps keep coming back to that familiar brand, right? And so it's another way of saying loyalty, right? We all know our favorite loyalty apps. But if you take that a step further, you think about a repeat buyer, truly a repeat buyer is 50% more likely to make another purchase than a new customer, and they also spend 33% more money because they're just so bought in. They're so loyal. They believe in that brand and they really believe in that brand's mission.
So, taking a batch to subscription, if you can make it easy for someone to no brainer come back, subscribe, and then keep that relationship going, on average you're probably going to have between seven to nine interactions with a customer subscriber versus a one-time customer. So, at the end of the day, if you think about a merchant's goal, truly it's not just focused on those one-time purchases. They're focused on really thinking about customer lifetime value and extending that beyond the normal average.
Would you say that subscriptions can be used by all merchants? Is it a specific segment of merchants? What would you recommendations be for a merchant who's like, yes subscriptions, no subscriptions or somewhere in between?
Yeah. Honestly, I probably would answer this differently four years ago. So, four years ago we worked really well. We still work really well with the consumable brands. So, the brands that you would normally find in your kitchen or your bathroom. So, kitchen would be coffee beans, right? Bathroom could be refills for your razor. Those verticals do really well because, again, very obvious, you're consuming something. You're going to need more of that and refill. Now, we're seeing, actually, different use cases beyond subscription. Again, going back to the fact that ReCharge is customizable, we're seeing different business models pop up that we're not powering. For example, membership models. We are actually working with several fashion brands now that we wouldn't normally be four years ago. We are now empowering things like member only access points within a website.
I can go and give you examples. One of my favorites is Drink Haus. So, I'm not sure, I'm sure you guys know Helena. We're good friends and her and her team launched a brand over a year ago. They have an aperitif that is not a wine or a beer. It's a liqueur. She's now offering that on subscription, but it's more of a membership approach because you're not only getting one bottle or two bottles. You're getting free shipping. You're getting access to member only flavors. You are, in a normal environment, getting access to members only events in New York City or LA. She's creating this experience around a beverage, right? So, that's a membership approach and it's all powered by ReCharge.
I still haven't ordered from Drink Haus yet, but I am very eager to do that because everything I've heard about it is that it's absolutely amazing.
Yeah. I almost did three days ago and then I didn't, and I think this conversation is going to be what puts me over the edge. Because I saw they have a beautiful rose aperitif right now. First of all, love rose. Second of all, have been dying to try this brand. So, awesome.
We should do a follow-up Commerce Tea podcast, but Commerce Aperitif.
We are absolutely doing that.
So, speaking of great brands using ReCharge, I love a good success story. Can you share a story from when a subscription pivoted a business or was a really big aha moment for them?
So, in general, no one knows if subscription's going to work for them, right? Oftentimes folks are selling their consumable good as a one-time product and then they'll install ReCharge, and they'll see what happens. Either subscriptions take off or they don't, and I could probably spend an hour talking about how to optimize for subscription. Kelly, you built several sites and you also have knowledge there. But what we've seen is companies like Dr. Axe, for example. They're a supplement company. They're a nutrition-focused company. They really started off based on the lifestyle that Dr. Axe himself was promoting, and then he would obviously talk about the supplements and different food and beverage products you could purchase to power a specific lifestyle. So, for them, they experimented with subscription. Now, subscription is over 40% of their business.
So, for them they've taken a very conservative approach in terms of thinking about that. They now have a team of seven people, if not more, who are all focused on optimizing the site, optimizing the promotion for subscription, and really thinking about AB testing, really taking a good look at conversion. So, I would say that's a great success story. But there's also, again, these companies like the newer folks like Drink Haus, we've seen them grow. We've seen companies like Cocokind. They're a company out of San Francisco focused on skincare. They also launched a membership model with us in the last year, and they've seen their memberships grow. So, in terms of a great success story, you have this small company in SF, experimented with ReCharge and they now have, I can't share publicly their numbers, but they have a very large number of members that have now subscribed, essentially, to that membership model.
I love hearing a great success story. So, thank you so much for sharing that with us. You talked a little bit just now about memberships. We talked about that previously with Haus and how they're using ReCharge as a membership model. What type of subscription models are there and how can merchants use your app in different ways and in different manners?
Yeah. So, we do well with three types of subscription models. One is the bread and butter subscribe and save that we're all very familiar with and that's really,, again how we got most of our growth in the early days. So, companies like Black Rifle Coffee, LOLA feminine care products, Billie razors. That's considered replenishment. So, that's subscribe and save model.
Love Billie, by the way.
Yes, they're awesome. The second type is more that curated approach, right? So, if you think of the box of the month or box of the quarter type companies who create more of a curated experience, where they, as the merchant, are selecting what goes in your subscription delivery. That's considered a curation or a box of goods. We've done, also, really well there since the beginning. Pusheen Box, Bokksu, which is Japanese snacks, Box of Style, which is a collection of fashion goods and skincare. So, that's the second type. Third is what we already talked about, which is more access. How do we gain access to a particular membership model or perks? My favorite example of a curation box, actually, is a company out of the UK. It's called Craft Gin Club. So good. So good.
Do they deliver to the US?
I don't think they do.
I don't think they do because of liquor restrictions and shipping [inaudible 00:00:17:01], and that's why a lot of companies can't even cross state lines because of the restrictions there.
The laws for shipping alcohol are ridiculous and the states are to blame. I live in Georgia and we can't have any liquor delivered. I can order a wine and I can, I think, I can order a beer, maybe. I don't know. I can at least order wine, but that's it. We are so far behind a lot of states. Rhian and I were talking about it the other day and she was like, "Oh yeah, I just got all of these cocktail kits delivered from some local bartender." I'm like, "I just did curbside pickup at our local liquor store because that is the only option I have."
Yeah. I mean, this sounds like a great topic for the Commerce Aperitif podcast.
That's all we're going to talk about. We'll have some cocktail-driven folks on as well. I can't wait. That's going to be a great episode, everybody. You're going to want to tune in.
It's going to be our new bonus episode structure. I love it.
So, what makes a subscription successful, Chathri?
It's so, so many aspects of the website go into making subscriptions successful. So, it starts... To me, I talk about the buyer's journey, right? All the different touch points that you can have for subscription, right? So, there's the obvious one, which is the product detail page and how easy it is for someone to subscribe. If you make it hard, it will be harder to grow your subscription base, right? So, make it easy from the product detail page. From there, again, reducing friction, so you go straight from the PDP to check out. But what makes a subscription successful is not just on the front end, making sure folks can at least subscribe, it's everything that happens after a subscriber decides to commit, right? So, what are the communications that you send after that checkout is successful?
How does that person manage their subscription? If you, again, focus on making it easy, they're going to engage more. By the time they do get to what we call the customer portal, which is where a subscriber engages with that brand and the subscription itself, you also want to make it fun and engaging, right? So, there's so many ways you can tweak that subscriber experience. For example, a company that we work with, FLEX Fits, which is a feminine care product, they have actually taken their customer portal and flipped it on its head and have added so many elements into it to help that subscriber. Because it's such a different type of product they've added education into the customer portal. How does it work? They've added in a loyalty area where you can actually collect points.
Different merchants have added in the ability to very easily and quickly skip, swap or cancel their subscription, right? So, the way that folks can help grow their subscription base and keep folks engaged is, again, make it easy to subscribe, make it obvious how to engage with your subscription, and then once they're in the customer portal make it, again, obvious that as a subscriber, you have options. And then that's how you create retention along the way.
Retention is hard to get right, especially since it varies so much from vertical to vertical, from brand to brand, how you communicate with your customers, just that kind of relationship that you have with them. So, I think reducing churn has been one of the most challenging things that I've seen merchants struggle with.
Yeah. It's surprising to us how much merchants aren't aware of really easy features to implement. I won't make this a How To Use ReCharge podcast, but there are real quick ways to make it obvious for folks to skip and swap, right? In terms of retention, as soon as you hit cancel, right? That subscriber goes from an active state to inactive, right? So, as a merchant, you want to make sure to protect that. So, again, if you can make it super obvious and easy to swap. So, if you're subscribed to a particular type of coffee and it's a dark roast, making it obvious to swap, perhaps, to a light roast. Or if you're subscribed to a protein bar that's a vanilla protein power bar, make it easy for them to switch to the mocha coconut flavor of that protein bar. So, then it keeps it... I mean, we're all human, right? We don't want to keep having the same thing over and over again. So, make it easy to mix things up.
For sure. So, I know we gave some examples of different kinds of membership models as far as what ReCharge customers are currently using, but I'd love to hear some examples of some of your favorite stores that have been successful using ReCharge.
I need a whole nother hour. So, I really love Hunt A Killer as an example. Again, a lot of us were like, "How is this going to work?" So, Hunt A Killer is essentially an episodic box. It's a sequential box experience where they actually create a murder mystery approach, put all the clues and different items into a box, you ship it out to your address. You work through the murder mystery with your family or friends, or even now, coworkers. They've now launched a whole different product to do a mystery box with your coworkers. Yeah. That's one of my favorite examples. Again, the co-founder of that company has an amazing background in history if you ever read his story. Awesome story. Ryan Hogan, who's the co-founder of Hunt A Killer. So, that's an example. Personally, what I subscribe to, I subscribed to a lot of different brands. My husband thinks I'm kind of crazy seeing how many boxes show up at our front door.
I can commiserate with that. Yes. Same. My husband's like, "Another one?" I'm like, "Whoa. Judgy. Yes"
To be honest and to be fair, given what's gone on in the world and not being able to go shop outside as much, having these items show up at your door is actually healthy and convenient. But I subscribe to La Colombe coffees. So, they sell a draft latte in a can, which is a first of its kind.
It's so good.
Y'all, we hadn't talked about this beforehand, but let me tell you that is a phenomenal product that you all need to drink and put into your body.
Yeah. They're one of our early coffee subscription brands that we've been working with since, I think, 2016 when I joined the company. But yeah, I receive their draft latte in a can. I have several supplements and snacks. Snacks is a big one for me, so I have Dang food bars, which is an almond keto-focused bar that I buy and subscribe to. Another one is BioTrust. They have a couple of different supplements that I've purchased. And then I would say finally, just vitamins and supplements. So again, I mentioned Dr. Ave already, but that's an easy one to subscribe to.
Important question. Where can we find you on the internet?
Me personally, I am on LinkedIn and Twitter and it's super easy. It's just Chathri. And then ReCharge is at www.ReChargepayments.com. We're also in the Shopify app store as well, but you can install for free and get started. I'm obviously here, in terms of myself and my team, we're here to answer any questions that anyone has about how to get started, how to grow subscription business, and really share what's worked for other merchants in the space.
Okay. So, I just need to call this out because I thought this was the coolest thing. The updated pricing for ReCharge.
That it is free for the first $100,000?
Yeah. So, we launched this during COVID in response to figuring out, what can we do as a company to help our merchants during this time? What can we do as ReCharge to help our agency partners? And then finally, what can we do to help our employees? We took the first couple of weeks in March really trying to iron out what we could do, what was possible. The first easy win for us, win in terms of helping our merchants, is to make it free to use ReCharge and only charge merchants once things started to pick up for their business. So, the intent was to reduce any friction or hesitation a merchant might have in trying to grow their business at that time, because frankly, and you all know this, several folks were trying out Shopify and ReCharge for the first time.
For us, we only charge once someone passes the $100,000 threshold, which essentially to us shows that, yes, okay, subscription is working for that store. If not, to us, we think that that is still a win because you're trying out ReCharge, you're seeing what's sticking and perhaps subscription isn't right for your brand and you're still not charged. I think that's the fun part about commerce today is that you can experiment, you can iterate, you can pivot. For us to offer it as a no risk option, again, it took COVID for us to make this happen, but for now we're going to keep that pricing. It's here to stay.
I absolutely love that. It removes so many barriers. That zero risk is, to me, it's a no brainer. Just give it a shot. If it doesn't work out, you can get rid of it.
I actually have a friend in LA who's a floral designer who I speak about quite frequently. She was, pre-COVID, doing major installations at Coachella, huge things. She's had to pivot to a more one-to-one model where she's making smaller bouquets. I helped her implement ReCharge and when I saw that it was free for the first $100,000, it made such a difference to her bottom line because it was a way for her to experiment with a new way of doing business while also finding a way to sustainably have monthly recurrent revenue and to ensure that she's successful. So, thank you so much for doing that because I know it's, at least people in my life, I have seen it make a huge difference in their lives. So, yeah.
Yeah. I'll just add to that real quick, is we saw a lot of experimentation during the last recession and we saw how many people signed up for Shopify at that time. For us, we had a hunch that, again, in this environment that there'll be a lot of people who would be experimenting. So, again, it seemed like such an obvious after we did it, but I'm really happy that we made it risk-free, that it's just reduced friction for anyone who's perhaps lost their job and they're just trying to see if their craft or the goods that they can sell now online is even right for subscription. Yep.
Awesome. Well, we close out all of these episodes by calling out a Shopify store that is inspiring us, something that looks cool, like their products, whatever it might be. So, I would love to put you on the spot to choose a Shopify store, maybe that's powered by ReCharge, that you would love to call out.
So, one of my favorite brands is definitely well-known, but I think that's by design. They spent a lot of time thinking about how to build the subscription experience. It is a brand which is NATIVE, NATIVE deodorant, and they've done a really good job about making it easy to do what I talked about already, which was swap a product, but also adding a trial sample into your next delivery. So, that upsell that they've added into their customer portal is beautifully designed. We constantly refer to their customer portal during our calls with prospective merchants. It's just a clean design. It's a great product. They have really clear messaging and they've done a really good job with growing their business not only in the online, but also in the offline. I'm sure you guys have seen them in Target and CVS, but I think from end-to-end as a brand, they've done a great job.
Yeah. completely agree. They've got it all figured out. I'm sure if they were listening to this, they'd be like, "No, we don't." But at least to us, they're a really great example. Rhian, what's your store?
Mine is not related to subscriptions. This is partially informed by the fact that I'm a huge RuPaul Drag Race fan, and it's All-Stars right now. I love dragqueenmerch.com, and here's why. It's not just because it's a bunch of merch for drag queens or of drag queens for consumers, such as myself. I really love how this brand handles multiple performers. Because we see so often merch stores trying to do this, right? Where they're trying to handle multiple bands or multiple artists, and they kind of swing and miss. Drag Queen Merch has, in their performer section, it's all sectioned out and each performer has their own collection, but it all goes to the same cart. That way, for artists who maybe are on tour or doing their art full-time, this is a great way for them to sell their merch without having to worry about the sticky parts of selling merch, which is most of it.
Which is most of it.
And having physical goods on hand. The Drag Queen Merch keeps the physical goods on hand and does the backend everything, and then the queens and the artists get to just be artists and to do their thing. So, I like that combination of things. Also, it's pretty.
Yeah, it is pretty. So, mine is kind of silly, but I love it. It's called Piñatagrams. You can send a pinata to somebody that's filled with candy and you can have a message go with it, like a congratulations or whatever you want to give. Happy birthday. You literally ship them a pinata, and then they can just beat up on a pinata and then they get candy. I think it's such a wonderful idea.
If I don't get one for my birthday, Kelly, I'm going to be a little disappointed.
I know. No pressure. I have not too long to get it to you now.
You've inspired me. I'm going to somehow either power this myself or try to have someone else do it, but I want to do a glitter bomb of the month club.
Oh my gosh. You have to.
Yeah. We need to do that. There's a whole backstory of that, but we'll save that for the Commerce Aperitif podcast. But I need to build this with someone.
Well, let's take that part offline so no one can take our ideas. Chathri, we are so excited to have you back for Congress Aperitif where we shall be drinking aperitifs slash wine and talking more things commerce.
Can't wait. Very excited.
Thank you so much for tuning in and thanks again to our sponsors for supporting this episode. We have a YouTube channel. You can subscribe at youtube.com/commercetea. I'm still learning how to talk. Yeah. So, Commerce Tea YouTube channel. We covered it now. We do friendly Shopify store tear downs. So, check that out. They're really fun to watch, and they're really fun for us to record as well. If you want to have your store potentially torn down friendly, of course, friendlyly.
In a friendly way, we have a place for you to submit your store, actually, in the description of any of the videos that are on our YouTube channel. So, check those out. If you like our podcasts, please leave us a review on Apple podcasts. Reviews make us really happy, and we love to read them. You can subscribe to Commerce Tea on your favorite podcasting service. We post new episodes every Tuesday. So, grab your mug and join us. We'll see you next week.
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