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Word of mouth is still the best marketing tool, even in today’s digital world. And in this time of the ecommerce boom, brands are constantly working to build buzz for their products. Whether that’s through ratings, reviews, social posts, or unique ad campaigns. But there’s one highly coveted strategy that’s been bubbling to the top of the stack, and every ecommerce leader knows it is the way of the future. User generated content.
And a company called Yotpo is here to help with that. Yotpo is one of the top platforms that companies such as IKEA, 1-800-FLOWERS, Chubbies and more lean on to help them build communities, generate UGC, and create loyalty programs that yield the kind of engagement most brands only dream of.
On this episode of Up Next in Commerce, I asked the co-founder and CEO of Yotpo, Tomer Tagrin to give us an inside look at how Yotpo is generating 5X more engagement and content creation than is typical. Plus, we also dove into the future of loyalty programs and personalization. My one-sentence takeaway: definitely start leaning heavily into loyalty and maybe let off the gas a bit on personalization. Why? Tune in to find out!
Main Takeaways:
- Do What You Know: Success in ecommerce is becoming more about the community you can build to support you. So the question founders are asking themselves — and Yotpo — is how do you build that community? The answer is pretty simple actually, you just have to follow your own interests. A founder starts a company for a reason, and they typically personify the exact target customer their company is going after. So dig into that link and create content and strategies that would resonate with you, the founder.
- Long Live Loyalty Programs: Every brand should have a loyalty program, otherwise there are opportunities and dollars being left on the table. The only way to access those opportunities and cash, though, is through a very brand-specific program. There are no one-size-fits-all loyalty programs. Brands need to understand what they want to incentivize for in their loyalty programs, who they want to target, and how they will reward the behavior they are trying to generate through the loyalty program.
- Partial Personalization: By deploying personalization tools, you can sometimes open Pandora’s box of never-ending adjustments and adaptations in order to create individualized experiences. At a certain point, the return on that investment starts to diminish. Customers are all different, but they don’t all need to be treated as unicorns. Create segments of customer types, and personalize the experience to those subsets.
For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.
Key Quotes:
“If in retail, it was about location, location, location, [then] online, it’s about consumer attention. In a world where every brand is an ecommerce brand…everyone is fighting over consumer attention.”
“We are not a unicorn, we are a flamingo. We are building a flamingo. Why is that? Because a flamingo is a real animal and we are building a real business to provide real value to customers over time. It’s a very unique animal, and it’s actually part of our culture.”
“One of our customers said that buying a Facebook ad is more expensive than a Fifth Avenue store. Definitely Instagram, Facebook, Google are extremely, extremely expensive, and I don’t think it’s going to slow down…. So the question is how do you win? You win by building a community. You win by giving your customers a great experience.”
“In general, when you look at mission-driven brands, the founders are usually the buyer persona, or they know the buyer persona very, very well. Then it just becomes easy. Do stuff that is interesting for you. Do stuff that you would like to buy from. That’s where we see the brands that are growing the fastest at the moment.”
“If you’re a newer brand and you’re just now starting, you have to focus on how do you create trust? The best way to create trust is by what real people are saying. I can share with you endless amounts of data showing you that products that just have five-star reviews convert much worse than like 3.8. Which is insane, but it makes sense, because nobody believes everything is perfect. Authenticity, transparency are so key in a world where again, customer acquisition cost is super expensive.”
“Why user generated content is so connected to loyalty is once you identify who are customers that are likely to be loyal, those customers are much more likely to generate content for you, photos, video. After someone uploads a photo, ask them to join your loyalty club. There’s five X more chance that will happen.”
“Loyalty is a very complex problem. In order for a brand now to launch a loyalty program, they need to give it some thought. It’s not a cookie cutter, because every brand has their own thing. On the flip side, if the experience won’t be dead easy for the consumer, or frictionless for the consumer, consumers won’t engage with the loyalty program.”
“In 2021, you have to have a loyalty program….[otherwise] you are losing a lot of money, you’re leaving a lot of money on the table. But you need to first figure out what do you want to incentivize for? What is the behavior you want to encourage? Then, what are you willing to give, and how do you make it easy for consumers to engage onsite? You can send different emails, you can run different social campaigns, or social contests, there’s a bunch of options, but eventually it’s all about how do you build a relationship with your most important customers? It’s a very emotional experience on one end, on the other end, it’s that simple. You need to see ROI and it’s all about customer lifetime value.”
“The problem with personalization is it’s an endless problem. There is always something to improve, but eventually for the consumer, there is a diminishing value. For us, it’s more about looking at sub-segments of your customers and how you treat them differently, and how do you help the marketer really test and try certain things? Trying to personalize it, you can do that all day long and it won’t move the needle necessarily. It’s just about understanding from that specific customer, what sub-segment they belong to, and then how do you treat that sub-segment differently?”
“UGC it’s the foundation of your brand. You cannot do Google ads, you cannot do influencer ads without it.”
Mentions:
Bio:
Tomer Tagrin is the co-founder and CEO of Yotpo, a leading platform for building communities and leveraging UGC to build brands. Yotpo was founded in 2010 and recently finalized a new round of funding at a $1.4 billion valuation.
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Transcript:
Stephanie:
Hey everyone, and welcome back to up next in commerce. This is your host, Stephanie Postles, CEO at Mission.org. Joining us today is Tomer Tagrin. The co-founder and CEO of Yotpo. Tomer, welcome.
Tomer:
Hey, thank you for having me.
Stephanie:
I’m excited to have you. You might not know this, but a couple of guests who’ve come on the show actually have mentioned you guys. We had the CEO of Live Tinted come on, and a couple more. They said your company-
Tomer:
In a good way or in a bad way?
Stephanie:
In an amazing way. They said it was game changing.
Tomer:
Thank you, thank you.
Stephanie:
Yeah. When I saw you coming on, I told our producer Hilary, I’m like, “This is awesome. So serendipitous.” But in your words, I’d like to hear what is Yotpo, and why did you start Yotpo?
Tomer:
Yeah. You want the short version or the long version?
Stephanie:
Long if it has a lot of little interesting tangents.-
Tomer:
You got it, you got it. I’ll give you maybe the opening gambit about your points, then I’ll tell you maybe the story in a more detailed way.
Stephanie:
Yeah.
Tomer:
The best way to think about Yotpo if in retail, it was about location, location, location, online, it’s about consumer attention. In a world where every brand is an ecommerce brand, right from Miss Stephanie in Tomer t-shirtcompany.com, up to PNG, everyone is fighting over consumer attention. That’s what we do. We help ecommerce brand win over consumer attention by consolidating the marketing stack and really enable them to build great experiences for consumers, because that’s the only way to win over consumer attention. We actually started as a reviews company, and we started from a very … 10 years ago from a personal story that we had a friend in my group of friends that each year made fun of us, that we didn’t buy him anything for his birthday.
Tomer:
11 years ago we decided to do something, and he was big on photography back then, so we bought him photography [inaudible] and because I’m the geek, I [inaudible] online and I find him a fancy SLR camera. We bought him that, he was super happy. But what happened is that the teacher, after the second lesson told him that we bought him the crappiest camera we could have bought him. And all of my friends made fun of me. Then I went back and we saw that my decision was based on reviewers name like Stephanie 123, and I don’t know anything about it. That is okay. Let’s do that. Very, very good, and basically find authenticity of reviews. So, we built our entire technology based on that, and making sure that whoever writes reviews is a real person that actually bought a product.
Tomer:
If she or he are an expert in the field, we’ll also let you know. We really … wherever to disrupt let’s call it the reviews in ecommerce, especially on the SME, it was also a great time. We were much luckier than small. It was a great time to enter ecommerce, or ecommerce marketing. We grew with a lot of the Shopify, the B commerce. We were very focused on the lower end at the beginning, and now we have Ikea and PNG and 1-800-Flowers, but we were for years focused just on the lower end. I think five years ago, we understood that the bigger problem for ecommerce brands is that they’re super busy, they’re very small and nimble, and they have just too many point solutions to deal with, so we need to consolidate everything because the consumer experience actually flow through each one of them. I’ll give you one example.
Tomer:
I remember one of our customers telling me a few years ago, he said, “Look, Tomer, when someone gives me a one star review, I still ask for a referral, and that’s the dumbest thing I can do as a brand.” Right? Of course, but they just weren’t able to connect those dots together before [inaudible]. We completely re-architecture. We went through a lot of different things to make sure that it’s one platform to really help you win over consumer attention. It was something very, very important. That’s our mission in life today. Since then, we built two more products, we acquired two more companies, we completely re-architecture the platform itself. We changed the go-to market, we’ve been through a lot. Now we’re in the face of adding a new product every let’s say 18 months.
Stephanie:
Wow. That’s a lot of new products, because yeah, I was looking through everything you did. I’m like, okay, you do reviews, you do referral programs, you do smart loyalty programs, and everything seems every time I talk to a commerce brand, I do always think, wow, you guys have so many tools and technologies you have to plug into. How do you keep track of it all? What does the marketing tech stack look for someone when they come to you? What things are they, “Hey, can you help us consolidate all these crazy processes?”
Tomer:
Yeah. Usually customers don’t come with us to consolidate, it happens, but not a lot. We actually build the company that we commonly just … we can have five different products in the market, use the general reviews, what we call VMS. It’s a Visual Marketing Suite, a referral product, a loyalty product, and an SMS marketing product. Walking on two malls, one of them is going to be launched let’s say in two quarters, another one in four quarters, and sorry. Basically you start with the ones that you can start with just loyalty, or actually SMS now is our fastest growing part of the business. Then we show you that through the synergies in the product, it actually makes sense for you too … I’ll give you an example. If you launch a loyalty program, the best way to communicate with your most loyal customer is through SMS.
Tomer:
We make it very easy for you. If you want to send a loyalty campaign for customers that are likely to buy in the next 90 days, and gave you a five star review, and referred a friend, to send them an SMS with a new loyalty offer, we make it very, very easy for you. Where in the other architecture, it literally use [inaudible] taking weeks to orchestrate all of that. For us, you can start with whatever product you want, it doesn’t matter for us. That’s how we build everything because we don’t want to force the customer to consolidate. Once you start seeing the synergies and it makes sense, that’s where the exponential value starts. Actually, in our high touch customers, we see now that more than 60% of the customers actually use buying and using two plus product, so they are multi product customers, and that’s something super, super important for us. From time to time, customers come to us to consolidate, but not always.
Stephanie:
Yeah, awesome. Just to give a little context too, tell me about some of the recent news around funding that maybe you guys just went through. How big are you, and who are some of your clients. Name drop some people if you can. So our audience knows you all are legit, you’re on the unicorn status. I’ll call you that. You might be like, “Don’t call me that.” I just did.
Tomer:
I actually have a joke in the fundraising that we did. We just closed a $210 million round at a $1.4 billion valuation, from great investors and definitely on our path for the next stage to become a public company. I always had a slide actually in the fundraising deck that said that despite of the valuation, we are not a unicorn, we are Flamingo. We are building a Flamingo. Why is that? Because Flamingo is a real animal and we are building a real business to provide real value to customers over time. It’s a very unique animal.n It’s actually part of our culture. It’s a joke, but it’s actually something very, very … that we take very seriously.
Stephanie:
I love that.
Tomer:
Some of our customers, Ikea, Unilever, 1-800-Flowers, we also have 30,000 paying customers. A lot of the cool brands, the Chubbies, the away, the movement, all of the poster Childs of D to C are as well usually choosing Yotpo, but also some of the largest brands in the world. I think they come to us usually because our products are really … we like to call it easy to start, easier to scale, and really trying to think about merchant, and really trying not to use buzz words, not to use fancy things, just really helping those brands grow faster in a very direct way. We are 500 people, or a little bit less, and I don’t know any other group of people that are so focused on helping brands win over consumer attention. That’s literally what we think of every day.
Tomer:
Also, I think that ecommerce is one of the largest changes of our generation, and we believe that we have a real shot to become one of the most important companies in the history of commerce. I always tell the company telling me that … I have two young boys, and one of the things that for me I want them to think about Yotpo is they were a huge driver forward for that something that called digitization of retail, or the shift to e-comm, or whatever you want to call it. Very much we are super, super passionate about helping those brands.
Stephanie:
That’s amazing. Congratulations. That’s awesome funding-
Tomer:
Thank you.
Stephanie:
…awesome investors. You’re really cool. I love that Flamingo reference. I want to use that just for myself now.
Tomer:
We call it be a Flamingo in a flock of pigeons. That’s our phrase internally.
Stephanie:
That’s good. It seems like the perfect time right now too, because customer acquisition is getting really expensive. Everything I’ve heard on the show is that, organic, natural, UGC, that’s what’s working now. Tell me a bit about how you think about the customer acquisition world, and why organic natural content or reviews, helps more than anything else right now.
Tomer:
It’s a great question. First of all, I’ll maybe share a funny story. Let’s say six months before COVID started, we actually had a customer advisory board. We meet customers and we ask them questions. One of the phrases I add that stuck with me is that one of our customers said that buying a Facebook ad is more expensive than a fifth Avenue store. Definitely you know Instagram, Facebook, Google are extremely, extremely expensive, and I don’t think it’s going to slow down. They want to be like a lot of other consumer fronts, at least in the near term horizon. When you add on top of that, Amazon, so the question is how do you win? You win by building a community. You win by giving your customers a great experience.
Tomer:
Part of that means social proof, part of it means making sure that you are very transparent, part of it means that you need to focus on customer lifetime value, because it’s so hard to bring, and you need to make sure they’re coming back. Loyalty, I can tell you it’s really top of mind. Then for us, we entered loyalty in 2018, we are now the fastest growing loyalty platform for ecommerce brands, and we power some of the most sophisticated loyalty programs out there, and it’s just amazing to see that even in the election, there were brands that giving points for customer to show that they voted, and there are customers that hate the point system because it’s they lose their brand and they just have a VIP tier experience, which is super awesome. There’s so much to do with that, which is fascinating to see how much brands are able to innovate.
Tomer:
I think we definitely live in a world to your question, I’ll circle back that whatever walks, you cannot win just by being great in paid anymore. It doesn’t scale. It can scale to a certain number but it won’t forever. Now the question, how do you build your brand? You build your brand by your community. That’s what we are very, very focused on as a company.
Stephanie:
What are the ways that you advise your brands to build that community? Especially if you come and you’re like, I don’t have a community. Where do I even start with that? I would think you need to acquire customers first, but then that’s pricey. Then you’re not even thinking about retention yet because you don’t have anyone to retain. What are the maybe building blocks even get to that next level?
Tomer:
Yeah. I’ll share a story. Are you familiar with Chubbies, the brand?
Stephanie:
Yeah.
Tomer:
Chubbies they have a great story on how they started. It started from an email that they used to send. I don’t know if you ever saw one of those emails. Super straightforward, so targeted to the buyer persona because they will, the buyer persona. It’s a really great group of founders that were just able to provide great content, and their customers actually want to buy Chubbies because they feel that this is the brand for them. You have movement that were very, very early on, very, very good on Instagram ads. I think today it probably means that you need to do everything well, there is not a hack, so you got to at least experiment with paid, you got to experiment with content, with organic. You have to invest, but in general, when you look at mission-driven brands, the founders are usually, they are the buyer persona, or they know the buyer persona very, very well.
Tomer:
Then it just become easy. Do stuff that are interesting for you. Do stuff that you would like to buy from. I think that’s where we see the brands that are growing the fastest at the moment. I think there was also probably a year, a year and a half ago, there was a huge trend in drop shippers that’s now actually declining, which is a good thing. I think it’s easier for brands now to stand out. I think that the bad news is that you need to do good in multiple fronts, but the good news is there’s so much demand at the moment for great brands that you just need to focus on your buyer persona.
Stephanie:
Yeah, that makes sense. Another interesting thing that I was reading about was how ads that have reviews in them are the highest converting ones. Which makes sense. I even think about, if I see someone’s picture with a review on it, an organic picture, I don’t want just the product picture, or even if that came on and she’ll be five stars, check it out. I would go there all day versus a normal ad.
Tomer:
It’s actually something we built a few years ago, and the hypothesis was, it was also based on our customer feedback that they think that social ads with social proof will work great on social media. That makes sense. Then what we did is we made it super easy and we work with Facebook and Instagram to make it easy to incorporate your user generated content, and then we started to experiment with that. We learned that, the studio photos that you have actually work like walls then real authentic and customers’ photos, so, we really build a lot of technology to encourage customers, and how do you get more photos, and then make it just very, very easy for you to use it on your social ads. It works phenomenally well. I think in general, one of the key learnings that we learn as a company that we’re established to establish trust between brands and consumers. That’s what we founded the company.
Tomer:
I think that, especially if you’re a newer brand and you’re just now starting, you have to focus on how do you create trust? The best way to create trust is by what real people are saying. I can share with you endless amount of data showing you that products that just have five star reviews convert much worse than like 3.8. Which is insane, but it makes sense, because nobody believes everything is perfect. Authenticity, transparency are so key in a world where again, customer acquisition cost is super expensive because if you were able to bring a customer and she or he had a bad experience, it’s bad unit economics. You cannot scale that business.
Stephanie:
Yeah. I think the interesting thing too, about organic reviews, even if they have a 3.8, is that you can oftentimes go in there and find, oh, this person’s talking about something that I really don’t care about. I’m even thinking about this and maybe Tomer you’re in the same place where it’s looking at daycare’s, preschools, and all this. Some of them have a four-star and people are complaining about the wait list. I didn’t want to pay a wait list fee, and you’re, ‘Okay.” That shouldn’t have brought it down, but that’s real, and now I trust it a bit more, and now I’m interested in exploring it, and not just looking at a high level review. What I wonder is, how do you get people to review? How do you get them to submit photos? I don’t have the time a lot of times, even though I love products, I just don’t have time for it. How are you incentivizing customers to do that?
Tomer:
Yeah. I’ll share a few stories that I think you’ll find they’re funny.
Stephanie:
We all have funny stories.
Tomer:
When we started, we didn’t know a lot on the reviews industry. So what we did, Amazon, Amazon has a page called Amazon top reviewers. These are people that wrote, I don’t even know how many reviews. We looked at their names or handlers, and we searched those people on Skype and Twitter, and we bombed them, and wanted to interview them. We spent hours and hours interviewing Amazon top reviewers, and I think it was eBay top reviewers, just trying to understand why people write reviews, what incentivize them to write reviews, and why other people are not writing reviews, and that’s how we formed the new approach and the reviews industry. I think definitely we make it easy for you. You talked about, you don’t have time. We build a technology called email review that you can leave the review inside the email.
Tomer:
It’s one step, it’s really easy to do. That’s super, super important. The second thing that’s really, really important is knowing when to ask for reviews. For example, when you buy a mattress, you need to experience with the product a little bit more before you will be willing to give a review versus a t-shirt. I think those are important. The last thing that I can tell you, which is really, really interesting, and this is why user generated content is so connected to loyalty, is once you identify who are customers that are likely to be loyal, those customers are much more likely to generate content for you, photos, video. After someone upload a photo, I can tell you now, if you’re not a Yotpo customer, ask them to join your loyalty club. There’s five X more chance that will happen. How do you take one interaction of the consumer with your brand, and translate it to the next step, and how do you take them in the customer journey step by step by step.
Tomer:
That’s why we are big believers you need to consolidate the marketing stack because it is one customer, one journey, and it’s not silo. I think it’s a frictionless experience, is knowing when to ask, and knowing who to ask. It’s super, super important. I think when we started Yotpo, we always heard the phrase of 1% of people write content, 9% of people reply to that comment, and 90% are just reading that content. Today we are more closer to five to 6% are generating content almost, which is a five X or six X improvements when we started. A lot of it is that consumer behavior, a lot of it is our technology, and a lot of it, I think is just brands are evolving and understanding the importance of that. But it’s just fascinating when we ask about photos for example. There are brands that you would never imagine, never in your life, that people will … I remember I was scrolling through one of our website, and they will say they are selling metals. Literally blocks of metals. That’s what they said.
Tomer:
They have thousands of reviews, thousands of reviews. People write reviews and super passionate reviews. We also have an NLP engine, a natural language processing that can give us and the merchant, positive sentiment, negative sentiment, and show you the score. People are super passionate about it, and apparently people are passionate for … Different people are passionate for different things. You just need to find those people that are passionate about what you build. That’s what I always find super, super inspiring.
Stephanie:
That is a really interesting take though around how you just need to have that passionate audience and finding them. But what also is interesting is how you guys are ingesting the data in ways that, I think I’ve been there for a while, but you keep saying consolidating it. I’ve always thought okay, you get all these good reviews, but oftentimes, I might not want to see their review for 99% of the products that I’m not looking at. If I’m looking at stocks at a company that has a hundred skews, I really just want to be able to zoom in on the reviews of those stocks and not see everything else.
Tomer:
Even more than that, what we did now, if you go to Yotpo customers, is we build an NLP engine, Natural Language Processing that can pull up topics from the content. Let’s say if you … I don’t want to take your pre-school example. If you want to just read about the waiting list, you can click waiting list and read just all the content talking about that. You want to read about the teacher, about the food, about whatever you want, you can. Especially on mobile, I can tell you that really, really increases conversion because who has the time to scroll through 300 reviews? No one. Once you have the relevant topic and a search bar, and the topics are actually accurate, then you start to really improve the quality of content that you are able to read, and you as a consumer really are able to get the information that you need in order to make a buying decision.
Stephanie:
Yeah. What do you think about curating reviews from other platforms? Do you guys also incorporate Amazon and walmart.com? How do you show in a holistic way? Or I also think a lot of those consumers are very different people who shop at Walmart, are different than Amazon versus on your website.
Tomer:
Yeah. In general, we are big believers that we need to authenticate. I mentioned how we started that these are real people that actually bought your product, so we just do it from the content we generated. I can tell you in our photos, we curate from Instagram or Pinterest, because we think that makes sense actually from specific hashtag, or specific accounts of the brand. I can tell you … I’ll give you another example that’s been explosive for us. Let’s say if you are a brand that want to increase your review count. Let’s say you sell a lot on Amazon, you sell a lot direct, but you want to increase your review count on your direct SMS, the best example. Our integration, when you can send review quiz through SMS, amazing. Just amazing results.
Tomer:
I highly recommend it for anyone that wants to increase their social proof, is to leverage SMS and SMS marketing. This is why when for us it’s you use our SMS marketing product and reviews under the same data platform. That’s what we work. Our platform theme works on is to make that experiences literally a click of a button. Send review request, and that’s it. I think in general, we are not a big believer from curation of content. It’s more about generating that content and giving you more tools to generate authentic content that we can authenticate.
Stephanie:
Yeah, that’s great. I think just thinking about making things frictionless for the end user. That’s going to change everything. Especially with reviews, I’m thinking if you send me a text, an SMS, that just said, just review it and you don’t pop me around a million other places-
Tomer:
Exactly.
Stephanie:
-I’ll hit the start count. If I don’t feel adding in words right now, I won’t, but making it easy to where I’ll actually interact quickly, I think is the way of the future. Even earlier on Amazon, it was asking me to review something on my homepage. I tried to click five stars then it shot me over to another page and wanted me to write stuff, and then I just exed out. I’m like, “No. It’s too much work. I have two minutes before this interview.” I was just trying to say, “I liked my pair of shorts I bought.”
Tomer:
I can tell you it’s the same thing in loyalty by the way. We see that loyalty, because loyalty you also see that in brand. But loyalty is a very complex problem. In order for a brand now to launch a loyalty program, they need to give it some thought. It’s not a cookie cutter, because every brand has their own thing. On the flip side, if the experience won’t be dead easy for the consumer, or frictionless for the consumer, consumers won’t engage with the loyalty program. This is why we really focused on building an experience that it’s going to be really easy for your consumers to understand what’s in it for me, and how to engage with your loyalty program. Because if not, if it’s like you said, a link to another page and then I need to … it’s not going to happen. They’re not going to join your loyalty club. In general, in every product that we have, we are very, very focused on a very frictionless consumer experience, because we learned so many times, it won’t work if it’s complicated. It just won’t.
Stephanie:
Yeah. How do you think about building up a good loyalty program? I’m sure a lot of your clients ask, what are some pitfalls that you’ve seen before, and how do I make it frictionless, and fun, and engaging? How would you advise them on creating one from scratch?
Tomer:
Yeah, there’s a lot actually and it’s a complex topic that we are super passionate about. But, if I need to summarize it, I’ll say that one, like I mentioned complex problem, but it has to be an easy consumer experience. Second it’s not one size fits all. You really need to understand, okay, why do you want to incentivize for? Let’s take Chubbies, another example that we started. Chubbies has a great loyalty program across categories. Let’s say if you buy shorts, they want you to buy a t-shirt, they will incentivize you with points to do that. That’s super, super important. For Chubbies the point system it’s basically a mechanism to incentivize certain behavior that you want, that works extremely well. You need to figure out what behaviors do you want to encourage. Another example is ThirdLove. I don’t know if you’re familiar with that brand.
Stephanie:
Yeah, I do know them.
Tomer:
They also use our loyalty program. For them it was all about the brand, meaning they didn’t want to use a point system, they actually wanted to use a VIP tier system. You do a certain action or you spend a certain amount, and then you get certain VIP tiers level that you can get different parts from free shipping products, discounts, whatever you want. That’s been working phenomenally well for them. I think early on just in 2021, you have to have a loyalty program. I think we are past the days that, yeah, I’m not sure. You are losing a lot of money, you’re leaving a lot of money on the table, but you need to first figure out what do you want to incentivize for? What is the behavior you want to encourage?
Tomer:
That’s super important. Then, what are you willing to give, and how do you make it easy for consumers to engage onsite? You can send different emails, you can run different social campaigns, or social contests. There’s a bunch of things, but eventually it’s all about how do you build a relationship with your most important customers? With the customer that you care the most on? It’s a very emotional experience on one end, on the other end, it’s that simple. You need to see ROI. It’s all about customer lifetime value. The analytic needs to be if you’re not sure if your loyalty program is not working or not, it’s probably, it doesn’t work, because it’s very easy to understand that it’s working, and it’s about increasing customer lifetime value.
Stephanie:
I think that’s a good point too, about knowing your customer and what they’re going to want to see. For something like a ThirdLove, I can see why they want to be seen as it’s more premium, you’re part of the club. We’re so much more higher end than a Victoria’s Secret or whoever else they’re competing with, versus the Chubbies, their client probably doesn’t need to see that to feel like they’re part of the club. They just want the product.
Tomer:
Exactly. It’s such a strong brand that if you buy Chubbies you’re already part of the club. It’s one of the best ways definitely. I’ll give you another example. Maybe I can give you also to share some light about the connectivity. Let’s take another one of our customer that you probably know, Steve Madden. Let’s say you are a junkie of sneakers, that’s your thing in life, Stephanie. You are the number one in their VIP tier program. Literally number one. Then you get sneakers and you give them a negative review because the shoelace was off or whatever. They want to know about it.
Stephanie:
Sounds like me.
Tomer:
They want to know about it and they want to treat you a little bit differently. Taking that loyalty data, or the review data and injecting it back to loyalty and help desk, and doing all of that, is so, so important in order to provide a great consumer experience. That’s the only way to do so. We see that time and time again, you can not live with silo. That’s one of the biggest tips that I can give is that whenever if you’re a Yotpo customer, you’re not a Yotpo customer, it matters less. It’s about the connected experience.
Stephanie:
Yeah. Personalizing it is huge, and having a customer not feel they’re talking into a black box. If I say, “Hey, I’m not happy with something,” and then like you said, they’re like, “Here’s some points to just buy some more of it,” or something, that’s probably-
Tomer:
I’ll tell you another joke that we use internally. Personalization, I hate it when product managers come to me and talk about personalization because I won’t call it the graveyard of ecommerce, but I think the problem with personalization, it’s an endless problem. There is always something to improve, but eventually for the consumer, there is a diminishing value in keep on personally up until the point. For us, it’s more about look at sub segments of your customers and how you treat them differently, and how do you help the marketer really test and try certain things, but trying to personalize it. You can do that all day long and it won’t move the needle necessarily. It’s just about understanding from that specific customer, what sub segment they belong to, and then how do you treat that sub segment differently?
Stephanie:
That’s really interesting. I like that. It’s not like everyone is a unique snowflake. However, they probably do fit in some buckets, and you can treat those segments pretty similar, and now we have methods for them. I liked that.
Tomer:
Exactly.
Stephanie:
I’m thinking about all this data that you guys are getting, and the way that you’re reacting to it and making new products and helping these brands, what data is out there that I guess you could call it dark data, that you feel could be tapped into, but you’re like, we just haven’t gotten there yet, but there’s always data that’s out there that you feel you’re still not fully utilizing. What are brands usually have access to, but they’re just not fully capitalizing on it?
Tomer:
From the brand or from Yotpo perspective?
Stephanie:
I say brand perspective.
Tomer:
Brand perspective, I think the most interesting thing is actually analyzing the content itself of the reviews. I can give you two examples. One of the best examples which I love. Are you familiar with [inaudible].
Stephanie:
No.
Tomer:
From these scores they’re actually doing phenomenally well. A phenomenal brand. For them, we actually were able to analyze the content. We have a engine called insights from the natural language processing, and we learned something really interesting. That a lot of the content was written “I’m so happy. My boyfriend bought me that and that.” “I’m so happy. My husband did…” We actually told them, “You know what? We think you should launch a couples line, because a lot of your buyer persona, it’s not the sheets He buying for his girlfriend, for his wife, it doesn’t matter.” It’s one of the most successful launches they ever had. Or we have another furniture brand that I won’t mentioned their name, that we showed them that the number one reason for returns of the product is actually the smell of the sofa, and they need to fix that, because they have a real problem in that.
Tomer:
Actually looking at reviews as a let’s call it [inaudible] and that your ability to analyze on scale, and have a really smart again NLP engine that can show you what customers are saying in slice and dice, it’s fair. All the volumes per a customer behavior, per location, per segment is so, so important. You can get so much in product teams, marketing teams, service teams for sure. You can get to learn so much from it. I think that’s a dataset that a lot of brands are not spending enough time looking at.
Stephanie:
Yeah. It makes me think gone are the days where you would have people come into a room, and they try out your product and you hear feedback. It’s why. Now you can just get thousands of data points, use NLP, digest the data and figure out how to change your product going forward.
Tomer:
Exactly that.
Stephanie:
Makes it funny thinking about that. What about from a Yotpo perspective? What data do you want to get access to, to inform either your current products or new ones?
Tomer:
Something that we think about a lot is it’s very clear that commerce is going to be like Omni channel. Or is. Some of it will be marketplaces. Most of it will be direct to consumers. Some of it, maybe it will be on social, some of it maybe will be on Google, who knows. Everyone is trying that transaction will happen now at Instagram, on Google shopping, or whatever. For us, it’s how do you give more value when you sell on Amazon? How do we give more verdict? We just launched a partnership with Walmart that you can syndicate all your content with a click of a button. If you sell also on Walmart, all of your content will be there as well, so you’ll sell more on watermark. For us, it’s really about how do we take more data? We’re now working with Facebook and Google on a bunch of really, really interesting stuff, and how do we just help you to be a better Omni channel brand? I think.
Stephanie:
What data then are you looking at to be a better omni-channel brand? What things are you tapping into that maybe you weren’t able to a couple of years ago?
Tomer:
For us, with every new product that we add, there was a huge data injection. Just think about, let’s take SMS and loyalty. It’s so valuable that you have the two products under the same data platform that you can really for the first time send new SMS’es for just your loyal customers. Just your highest VIP tier, you want to send them an SMS because you know that SMS will convert the best because they are your most loyal customer. You can do that. I can tell you sending an SMS just saying, thank you, thank you, after someone referred a friend. You would be surprised how much that increased customer lifetime value. I always give our product team our ideal experience is let’s say Stephanie, one store will start opening up again. Think about you going, buying at the store that you are one of the most loyal customers, buying a ThirdLove offline store once they’ll have one, and then the second you walk out the door, you get an SMS, “Thank you for buying with us again. We really appreciate that.”
Tomer:
How awesome is that? Who doesn’t want to build that brand? I think from a data standpoint, the more products that we have, we really understand better the different segments of your customers, and make it easy for you to launch different campaigns. For us, SMS, for example, was a huge vision. That’s something that we didn’t have, a new execution layer. Loyalty was a huge addition. I think every product that we keep adding, we are learning much more on the brand. We’re learning much more on the customers of the brand.
Stephanie:
I like that. It definitely seems there’s a lot of room, especially for in-person retail experiences to complete that journey and to also be helpful as you walk into a store. But to a point where it doesn’t get creepy where it’s “I see you in the makeup aisle right now, and I would go with this one over that one,” that’s probably is taking it a little too far, but it still seems there’s room for brands to interact more because I don’t get many messages right now, and the ones that I do are very generic and not helpful. I sometimes wonder, why don’t my, a customer service rep, take a picture and send it to me and be, Hope your day is going well.” I think I would like something personal and funny like that, more than just come in and get 20% off today.
Tomer:
I can tell you what we’re hearing now from brands is that they are sending so many generic SMS that they actually… an SMS is … it’s not a cheap channel. It’s not like email. You need to actually pay for the message for the carrier. You really need to think carefully, “Okay, maybe for customers that gave me one star review, I need to ask a different SMS and send them, ‘Hey, how can I change the experience? I’m sorry, what can we do?’ versus customers that raved about the price, and maybe send them an SMS talking about a discount of customers that talk about the service, say send a picture of the customer service that helps them. That connectivity is I think what’s really, really important.
Stephanie:
Yeah, I agree. Where do you see the world of UGC in general transforming to over the next couple of years?
Tomer:
I think UGC will definitely move towards a place that how do you take the content you’re able to create, and leverage that in multiple places in your email marketing, in your SMS marketing, on your social ads, on Walmart, on Amazon, on Etsy, wherever you are as a brand, how you interact with consumers, that’s where you need UGC to be at. I think that’s super, super important. The second thing is that, what do you understand from that UGC? That’s something that I feel that as a company, we are just at the tip of the iceberg. There’s so much to be done there because these are the most important signals from your customers. That’s something that we are very, very excited about. The question is, will there be a new form of UGC? Stories, voice.
Tomer:
There’s a lot of things that we play around with in our hackathons to really trying to help pave the way of what’s next in UGC. I can tell you it’s very early, like videos actually for now for us now is a new format that’s also been growing really, really quickly. Will there be a new format? That’s also really, really interesting.
Stephanie:
How do you view influencers versus UGC? Because the way the market’s headed right now, I wonder if the whole influencer scene will start to die off, because people will keep wanting more authentic interactions and relationships, and they want to buy from people that feel more like them. How do you see influencers playing out all that?
Tomer:
The influencer is another really interesting field. First of all, I think it depends. Again, it’s not a one size fits all. It really depends on, what do you want to achieve with influencers? I think people understand today that just giving the Kardashian your product doesn’t necessarily mean that you’re going to increase sale. They can really, really help, and you can see Kylie cosmetic. But the top influencer was actually building their own brands because they understand that’s where the vast majority of revenue is, and that’s something we see a lot in. Now you see micro influencers. I think you probably need to do both, and different purposes. I think a UGC is more let’s say the basics. You need to have social proof. For me, influencer it’s more about another channel like paid.
Tomer:
Like a Google ads, you now have influencer ads, if you want to influence attacks, and it works, and you need to do it very, very well, but it’s actually not related to UGC. UGC it’s the foundation of your brand. You cannot do Google ads, you cannot do influencer ads without it. I think in general influencer is really interesting, but I also think that brands and influencer today, they see that in order for it to work, they need to be authentic.
Stephanie:
I completely agree. All right. The last question before we jump into the lightning round, do you integrate with awesome platforms like our sponsor, Salesforce Commerce Cloud?
Tomer:
Yes, definitely. We are a big partner of Salesforce Commerce Cloud. We’re actually I think one of the fastest growing solution on Salesforce Commerce Cloud at the moment, and they’ve been great partners of ours. We have really amazing brands. We started with reviews, now with loyalty, SMS is coming in just a few weeks I think. Yes, definitely. I think it’s one of the best platform for the enterprises that we see in the market.
Stephanie:
I completely agree with that. With that, let’s jump into the lightning round, which is brought to you by Salesforce Commerce Cloud. This is where I ask a question, and you have 30 seconds or less to answer. Are you ready Tomer?
Tomer:
Of course. I was born ready.
Stephanie:
If you were to have a podcast, what would it be about, and who would your first guest be?
Tomer:
What a great question. I think if I need to do a podcast, it will be just some great ecommerce stories, and I think just like one of the best people I know from the industry, his name is Scott Perry. He’s now the leading everything related to ecommerce in Jerome, before that he was involved with furniture, he’s just freaking awesome. He’s just really, really awesome. The other one that I really, really love is actually Lauren from Shopify. He’s another really awesome person to spend time. He basically found the Shopify plus.
Stephanie:
I like that. It might be a little competitive with our podcast. However, competition is healthy, so I’ll accept it.
Tomer:
No, I think what you’re doing by the way is super, super cool. It’s really, really interesting, and anyone in ecommerce should … these are exactly the type of content that people should be listened to, if you care about ecommerce.
Stephanie:
Thank you. I love that. Man, it’s good thing I brought you on. What is the nicest thing anyone’s ever done for you?
Tomer:
The nicest thing that anyone ever done to me. I think definitely I’ll say my wife. We have two young boys. She saw me in some really, really tough nights, and she was there to really help me pass through those tough nights. I would definitely give it to my wife.
Stephanie:
Shout out to your wife. I hope she listens to this. That’s great.
Tomer:
Of course she will.
Stephanie:
Yeah, she will. What one thing do you not understand today that you wish you did?
Tomer:
I don’t know. How do you get a crying baby to stop crying?
Stephanie:
I, after three boys, I still don’t fully know that one. That’s just a question that can’t be answered.
Stephanie:
All right. The last one, what is the last ecommerce purchase you made that you’re most excited about?
Tomer:
I’m actually super excited. I don’t know if you can see my background, but I bought from a society six. It’s one of our customers, and it’s actually a great story to end with. I think I can share about the Yotpo culture. When we founded Yotpo, you know that how every startup is saying that they started at a basement and yada yada. Our office was a real basement, meaning it was an apartment building, you would go down, turn left. There was no lights, no nothing. Even for people that were willing to interview for two people start startup, we got some feedback that their office is too hardcore. We didn’t have money for furniture, and we didn’t know what to do. I stole for a different time. I had a bunch of Sesame street puppets at my apartment. So I brought them to the office and that started to be our vibes.
Tomer:
Then when we moved to a real office, we took them with us, and then when we started opening offices across the globe, people thought that they need to bring Sesame street stuff with them. Then when we moved to the home office in COVID, I said, “Okay, we need to bring Sesame street stuff.” I bought from society six. We never forget where we coming from, where we came from. Sorry. I think that’s maybe one of the things I’m most excited about, and I just bought … Actually there’s another one. Because I keep buying from our customers. That’s my thing in life. I buy just from our customers. There’s an Oura ring that helps you sleep better and analyze your sleep. I don’t know if you’re familiar with that.
Stephanie:
No. What’s it called?
Tomer:
Oura ring. It’s really, really … I don’t know if people can see, but it’s-
Stephanie:
You can explain it to anyone who [inaudible].
Tomer:
It’s a ring that basically tracks, with an app tracks, how you sleep, how you need to give you let’s say guidance on how to better sleep. I’m super excited to test it. It just arrived today, and I’m going to test it. Excited about that.
Stephanie:
What things do you think it’ll tell you? To sleep better, quarantine your kids off in a room where you can’t hear them, or?
Tomer:
I wish. I wish someone would tell us that, yes, yes.
Stephanie:
You got that. Tell me how that works. That sounds awesome. Well, Tomer, thanks so much for joining the show. It’s been a pleasure. Where can people find out more about you and Yotpo?
Tomer:
First of all, thank you for having me. It’s a pleasure, and I think we in Yotpo are big fans of the podcast, by the way. We have a few episodes that we mentioned, it’s actually a thing. You can just go to Yotpo if you want to meet personally. It’s tomer@yotpo.com. It’s nothing too special, and feel free to reach out.
Stephanie:
Amazing. Thanks so much.
Tomer:
Thank you for having me.
