Webinar featuring Octane AI and Smile.io - Communication is key.

Johannes: [00:00:48] Hello everybody. Welcome to our first Blackotter webinar. I'm here today with Matt and Stuart from Octane AI and Smile.io.

Johannes: [00:01:10] Hey. So, I'm just gonna start off with a quick introduction. The first couple of attendees are already in. That's probably a couple of people that will join last minute but we'll just get started. So, thanks for joining everyone. A special shout out to everyone in the West Coast. Know it's super early and not easy just roll out of bed. And then I think we also have some people from Australia joining us today. So super late for you guys. This webinar today is going to be one hour and depending on how much time we have, we hope to have some questions at the end. You guys are all fired up for some really good Q & A. I would hope to have like 10 - 15 minutes, if you have any questions during the webinar. What we want to do is, we want to enable you to post your questions when you when you come up with the question, in the general chat, which is on the right-hand side of the webinar. Valentina is going to be moderating the chat will select the best questions. And we will be able go through those questions at the end. If there's anything else, you want to share on a general chat feel free.

Johannes: [00:02:39] We're very much looking forward to your feedback. I'm going to be a super exciting. So, the title of this webinar today, is communication is key.

Johannes: [00:02:51] We'll be going to be looking at is how we can establish a more personalized communication through segmentation, which usually hinders scalability and growth if you segment too much. So, what are we going to is we're going to look at how can we actually ensure stability and growth. We'll talk about why that matters and how we can achieve this.

Johannes: [00:03:18] So who's going to be with us today? I'll give a quick introduction but we're very fortunate to have an A class line up for our first webinar.

Johannes: [00:03:32] I'm just gonna be here and I'll be facilitating. We're curating testing partners with innovative technologies. We just want to make sure that we're picking the best partners and help our clients to grow. So, my name is Johannes.

Johannes: [00:03:49] I'm the CEO and founder of Blackotter.

Johannes: [00:03:53] With us today are firstly, Matt. Matt is the CEO of Octane AI. Octane AI is using Messenger bots, that customers love, and they have over a thousand merchants. They are a Shopify Plus partner and they work with super big and amazing clients like L’Oréal and GoPro. Matt is going to give us a whole rundown on his application and the amazing things that the guys at Octane AI do. And then the other gentleman on the right is Stuart. Stuart is the head of partnerships at Smile.IO. Smile (and I'm not sure this is true) but Smile seems to be the world's largest reward program provider. Is that right?

Stuart: [00:05:04] That's What we tell people, ha!

Johannes: [00:05:07] Nice.

Johannes: [00:05:08] It sounds very very impressive. And obviously a very great solution here as well. Which Stuart is going to tell us a little bit about it and how we can use community and grow through repeat customers and how to you do that in a way that your communication is very personalized and not general.

Johannes: [00:05:36] So how did we come up with this webinar?

Johannes: [00:05:40] Well first of all I'll give you a quick intro on Blackotter. So Blackotter is a business accelerator agency.

Johannes: [00:05:50] We focus on offering services that help brands grow. We're a results driven company and we focus on great technologies that enable customers to grow.

Johannes: [00:06:02] But we also work with innovative marketing technologies. We build web sites and we have great successes under our belt, with growing Flat Tummy to a brand that pretty much every girl in the U.S who is between 20 and 45 knows.

Johannes: [00:06:28] So we're doing that with a lot of exciting brands and we're very very excited. I think there's a couple of our actual clients joining us on this webinar today too, which is great.

Johannes: [00:06:51] So why this webinar and why do we want to talk about communication and segmentation? Really - the traditional online advertising model is broken. And it's very obvious if you look at those stats. You need to reach a very very large audience in order to convert a very small audience.

Johannes: [00:07:23] 99.976% of traditional paid advertising audience reached will not buy your product.

"99.976% of traditional paid advertising audience reached will not buy your product." 

Johannes: [00:07:40] So this is your traditional Facebook advertising, your traditional Google AdWords.

Johannes: [00:07:47] So why is that?

Johannes: [00:07:50] This is a curve called the Channel S Curve. But what this is, is essentially channels, online channels and advertising channels go through this adoption curve and channels usually thrive and start getting on the map with innovators and early adopters jumping on a channel.

Johannes: [00:08:21] It is great if you are a startup, to get some really great traction and with a channel that is at a very early stage of its lifecycle not a lot of brands are on it, not a lot of people will be using it, but you're going to get a very very high ROI.

Johannes: [00:08:39] For bigger brands it's a little bit harder to actually scale. And then this section here, early adopters, early/late majority is when the curve gets really steep. This is where you want to be. These are channels that are red hot, provide a really high ROI, and you can reach a big and engaged audience. People will love using that channel. And as a strategy, you'll want to move fast and double down on those channels. So, what happens then is the saturation phase.

Johannes: [00:09:28] It becomes a little bit more mainstream. Everyone's jumping on it. It gets a bit spammy. There might be some bad actors. But as a brand, it's often that you have to use those channels and it could be a traditional paid Facebook advertising or Google advertising.

Johannes: [00:09:49] We see that costs have been going up and up and up. So as a brand, you have to use those. But what you also want to do is you want to keep your eyes open and make sure that once those channels truly are going to go in decline that you have alternative strategies lined up. You know you can see channels that have been declining or have declined. MySpace is a big one. People might argue that the Facebook News Feed or email might be a channel that is very much in decline. So why is this happening? Pretty much because everyone that communicates in those channels get oversaturated and get spammy.

Johannes: [00:10:33] Communication is too broadcast, and consumers stopped paying attention. They stopped paying attention because the message is not personalized to them and the user experience is bad and that's what we're going to address today. We're going to look at how can we have personalized communication. How can we grow and scale with personalized contingent communication.

Johannes: [00:10:58] We're actually going to talk with Octane AI pretty much about the biggest channel opportunity in 2019.

Johannes: [00:11:11] This is red hot. That's a golden age channel that is the area for brands to double down and go hard. And then with Smile, we're going to look at one of the most effective forms of advertising - that is word of mouth. And that is pretty much independent from inefficiencies and advertising and the oldest and most effective advertising channel.

Johannes: [00:11:38] So without further ado, I'm just going to hand over to Matt.

Matt: [00:11:47] Awesome.

Matt: [00:11:47] Thank You. Hello everybody. I'm so excited to be here. And with such great partners on both sides of me. These are the guys you want to be listening to for sure. So, thank you first of all, for having me here. So, here's what I want to talk to you about. So, Octane AI. We are the Facebook Messenger bot platform for e-commerce. But what exactly does that mean?

Matt: [00:12:11] What is it Facebook Messenger bot? Why do you even care about this? Why is it such a big opportunity? Why Is it a channel? And Then how does it how does it even work? This Is what I'm going to go into with you right now. So first off Facebook Messenger. Massive massive opportunity. Here's what you need to basically be thinking about. So, email, obviously e-commerce businesses are hugely hugely built on top of email and email is not going anywhere anytime soon. But when you look at the statistics E-mail open rates have been going down by a 45 percent decrease over the past five years.

Matt: [00:13:02] So that the trend is down. So, it's not going anywhere.

Matt: [00:13:06] It's not going to disappear but open rates on e-mail as a channel are going down.

Matt: [00:13:11] Whereas messaging as a channel, engagement over the past five years has been going up by 54 percent. So, it's trending upwards. Messaging is growing. There's over four billion people who are messaging anywhere and there's over one point three million people who are messaging with each other actively on Facebook Messenger. And so, it's an entirely new channel, this is something that you want to be paying attention to. In a survey done by Twilio 9 out of 10 consumers said that they wished they were able to message with the brand.

"Messaging as a channel, engagement over the past 5 years has been going up by 54%. So, it's trending upwards."

Matt: [00:13:43] So that's the first thing. And so, if you're not currently doing anything with Facebook Messenger and you're not creating that channel, you're literally you're literally just leaving money on the table and you need to be taking a multi-channel approach. And this is what we're here to help you do.

Matt: [00:13:59] Octane AI makes it super super simple to do this.

Matt: [00:14:05] So the three things when it comes to utilizing your brand and leveraging Facebook Messenger, is grow, engage, and support.

Matt: [00:14:17] And so grow. You basically need to connect with more customers. You need to get them to opt in to you on Facebook messenger so that you have the ability to send the messages.

Matt: [00:14:26] And then engage. You want to be able to send them messages and you want to be able to send the messages throughout the customer journey. Very similar what you do with email except it's interactive.

Matt: [00:14:36] And then support. The more messages you're sending to people, the more messages they're going to send back and so you need to be able to automatically answer those questions.

Matt: [00:14:44] And so Octane helps you do all of those. And what's crazy is that we're working with about a thousand Shopify merchants right now and a lot of them are generating anywhere from 5 to over 10 percent of their revenue through Octane AI and through Facebook Messenger. So again, if you're not on there you bet you should get on there pretty soon and we can definitely help you with that.

Matt: [00:15:08] So the first thing we'll talk about is growth. So how do you get people to opt in? So, when you sign in to Octane AI, there are multiple ways that you can just turn this on to start getting your existing customers and your new customers to connect with you.

Matt: [00:15:24] The first one is this send on messenger checkbox. You might already have this up and running. If you're using Octane, or you might have seen this before on one of our one of our customers web sites. The send on messenger checkbox, which is powered by Facebook. And so, if a customer views this page and the checkbox is there, it can actually automatically detect who they are. So, they don't have to log in, they don't have to type anything out, it knows who they are. And you can put this checkbox on the marketing opt in pop up. So, if you're using something Privvy, we have integrations with those and you can actually get people to opt into email AND Facebook messenger at the exact same time.

Matt: [00:16:02] The second place that you can put this checkbox is underneath to add to cart button. And so, this means that when somebody is going to add an item to their cart, they can check this box so that they can get notifications over messenger about where their order is, or you can offer them a discount. So, a lot of people will do this. And what we've seen, is that when you send a new customer to your Website, and they add an item to the cart and then they abandon their cart and they leave, most of these people who are adding items to their cart never get to that checkout process and they never give you their email address. Whereas if you are using this checkbox, you can actually get a lot of them, even if they haven't given you an email address, to opt in to receive messages over Facebook through Octane AI. And so you actually will get more people doing that than giving you email. And when they leave, you can send them abandon cart messages and a whole lot of other things which we'll get into in a second.

Matt: [00:16:59] The other thing that you can do to get people to connect with you, is you can send them a discount pop up, or a coupon pop up very similar to what you do with email.

Matt: [00:17:11] The big difference here is if you're using this version of it with the send a messenger button, is just like the checkbox, it will automatically detect who you are. I don't have to type out my email or fill anything out. All I have to do is click that send to messenger button and automatically Facebook is going to connect me to your store's Facebook Messenger page and you will be able to send me campaigns and automated flows in the future.

Matt: [00:17:42] Next one is the Website Bot Embed.

Matt: [00:17:46] So you can actually embed your Octane AI bot on your store's Web site. And so appears in the bottom right. And this is really amazing because typically if someone was gonna go message support; 1) maybe you're not getting back to them super-fast. So that's something we really want to help with and 2) when they message support and then they leave - we want to be able to reach back out to them.

Matt: [00:18:07] And so these are the things that the Octane AI Embed allows you to do. If somebody starts a chat through this bot embed; 1) you can AI to automatically answer questions with Octane AI. So if people are saying like where's my order or do you have this in stock things like that. And then 2) once they've completed a conversation here, if they go on to add something to their cart you can send an abandon cart message. If they complete a purchase, you'll be able to send them an order confirmation. If they leave and they don't come back, you can send them a browser.

Matt: [00:18:41] And so this is a really really great way to get people to opt in.

[00:18:50] And the next one - so this is something which I don't think a lot of people know about but it's really really effective.

Matt: [00:18:56] So this is something that often allows you to do on Facebook itself where you can make a special type of post on Facebook from your Facebook page, and you can connect an Octane AI campaign to it.

Matt: [00:19:08] And so what happens is - if someone leaves a comment, if one of your customers or someone in your audience please comment on this Facebook post, you actually have the ability to automatically respond with a private message sent over Facebook.

Matt: [00:19:21] So for example if you were going to run a contest, and this is what a lot of the brands that we work with do, they'll post a picture on Facebook with this tool, they'll say hey! You know maybe it's like a travel company and they want to get engagement. So, they're gonna say Hey! What is your dream vacation? Where would you like to go? Leave a comment and tag your friend.

Matt: [00:19:43] And then every time somebody leaves a comment on Facebook page, using Octane AI will automatically send that customer a private message and say thank you so much for answering the question, by the way you can check out our new products here.

Matt: [00:19:57] And then they can ask them if they want to get messages in the future.

Matt: [00:20:00] So this is another really really great way to keep people in. You can also combine it with advertising. So if you post something like this, starts getting a lot of natural comments, you can boost it. That's a really really good technique. We see a lot of people doing.

Matt: [00:20:14] And then the last thing on the growth side is Facebook ads. And so again a lot of people don't actually know that you can do this but it's really effective.

Matt: [00:20:23] So Facebook ads are obviously huge. Just like e-mail it's a huge channel for e-commerce businesses.

Matt: [00:20:30] And typically when you're running a Facebook ad, when somebody clicks on that ad, they're getting taken to a Web site or landing page. Octane AI allows you to make a totally different type of ad where - when somebody clicks that ad on Facebook, instead of going to a Web site, they get sent directly to your bot powered by Octane AI, in a conversation that you've customized, can start.

Matt: [00:20:52] So for example, if you wanted to use, there's a lot of different use cases for this.

Matt: [00:20:57] So one use case is, maybe you want to connect with new customers and you want to figure out what their preferences are so that when you send them follow up messages through Octane AI, you're making sure that you're personalizing those and you're sending the right people the right messages at the right time.

Matt: [00:21:13] So you could use Octane AI to create a quick survey where it's asking you know, what is your favorite type of this product. And you know where in the world you live, and different questions to qualify. And then at the end of that conversation this automated consultation, can offer up the customer a selection of products that are recommended just for them. And so now when you're on a Facebook ad, all people have to do is click it and the moment they're talking to the bot, you will be able send them messages in the future and ask them a series of questions and then recommend them a product at the end. And if they don't complete a purchase, you can send them a welcome message over Facebook, you can send them a lot of different types of campaigns.

Matt: [00:21:51] There's a lot of other use cases for this. What's really interesting is that we're seeing people and brands getting new subscribers over messenger with these Facebook ads for just like cents. Like three cents, four cents, seven cents. It's like really really low really really effective. This is how you're going to connect with new people.

"We're seeing people and brands getting new subscribers over messenger with these Facebook ads for just like cents. It's really really low, really really effective." 

Matt: [00:22:12] So here's where it gets really interesting. Which is engage.

Matt: [00:22:15] So now that you've grown this list and so it's very similar to what you've probably done with email, it's just going to grow faster on messenger. Now you've grown this list - what do you do? How should you send these messages? Should you just blast everybody? Probably not.

Matt: [00:22:29] The key the key to running an excellent Facebook messenger strategy with Octane AI, is making sure that you are targeting the customer throughout their customer journey. And so you're sending personalized messages that go to the customer when they abandon their cart, when they abandon the site, when they complete a purchase, when they complete an order. These are the moments where you want to set up those automations and that's what Octane AI allows you to do.

Matt: [00:23:01] And what's amazing is that messages, so it's similar to email when you're thinking about targeting the customer journey, but Messenger can do things that email can't.

Matt: [00:23:12] Email typically is - I'm going to send you an e-mail, and that's kind of automated, and then you're going to get that e-mail, but there's no back and forth communication there. That's kind of the extent of the interaction.

Matt: [00:23:21] With Messaging - we can actually have a back and forth. So when I send you an automated abandoned cart message, you could follow up and ask the bot a question and then the bot can respond back to that. And so it's super super engaging.

Matt: [00:23:39] And you want to be sending these messages throughout the entire customer journey. So this is something we talk about a lot.

Matt: [00:23:45] If you are currently doing anything with Messenger, and you're only sending an abandoned cart message, you are leaving a ton of money on the table because you're forgetting about win backs and re-engagement, and birthdays and up sales and a whole series of messages and campaigns that you're probably already doing similar things on email.

Matt: [00:24:04] But you need to be doing those things with the people who are connected with your messenger as well. So if you're not doing anything right now, like you're not doing abandon carts, then you should definitely be setting up something like Octane.

Matt: [00:24:16] And if you're only doing abandon carts, then you definitely need to be thinking about what are those other types of campaigns and flows that I could be running that are going to be really effective and really helpful for my business and my customers.

Matt: [00:24:28] Abandoned cart messages is a huge one because you can connect with more people over messenger than you can connect with over email.

Matt: [00:24:41] It means that you can send more people abandoned cart messages over messenger typically, than you can send over email. And then the open rates on Messenger are typically over 90 percent which is way way higher than email.

Matt: [00:24:51] So when you're running an abandon cart message campaign this is where you're going to see a huge boost in revenue. And we've seen that about one out of nine people who receive an abandon cart message from Octane AI will convert to a purchase.

Matt: [00:25:05] So this is this is something where when you turn it on you're going to see an instant boost in revenue.

Matt: [00:25:10] And then keeping customers in the loop is important. What we've seen is we've worked with these thousand merchants, and I'm sure that everybody watching, whether you are an agency or an e-commerce brand, is you get a lot of questions where people are saying where is my order. Like how long is it going to take to get here, where's my order.

Matt: [00:25:33] With the brand we've looked at, almost like 50 percent of the questions are along those lines. And so one of the really great things about a bot and Octane AI, is that we can not only automatically answer questions but we can also pre-empt questions by sending customers data at the right time and so notifying them on messenger with a push notification when their order is completed and then when it has been shipped. We've Seen a drastic reduction in the number of customer support inquiries related to where's my order because we're kind of preempting that in a channel where they're paying attention to this channel every single day every every hour.

Matt: [00:26:16] And then, what's amazing is that not only can you set up these customer journey flows, which are completely automated, so when this trigger happens, this message gets sent to this customer at the right time.

Matt: [00:26:27] But you can also do a campaign. And so similar to email, on Octane AI, if you wanted to go send a push notification, so if you wanted to like vibrate somebodies’ phone because you have a new sale, it's a holiday, or you have a new product, whatever it happens to be, Octane AII actually allows you to do that.

Matt: [00:26:48] So let's say you have, we have customers where they have over half a million people now who are connected to them on Octane AI. So if they send out a new message that's five hundred thousand people all around the world whose phones are going to buzz at the exact same time which is a really really powerful ability. And so you can send it to everybody or you can target it and you can send it to specific groups. And so you don't have to just blast everybody. If You only want to send it to people who've completed two orders in the past month, so you want to send to VIP, that's something you can do. If You want to send it to a specific location.

Matt: [00:27:24] Maybe you are getting a new product featured in a retail location and you want to drive a lot of foot traffic. You could send a broadcast message just to people within a 10 mile radius.

Matt: [00:27:32] So broadcasts, super super super powerful ability just don't abuse it. Know that this is like a sacred channel that you're messaging people with. And so only send them great messages. Don't send them too many.

Matt: [00:27:46] We're going to do our best to help make sure you follow that. But you also have a responsibility as well.

Matt: [00:27:54] And we just went over this. This is the different targeting.

Matt: [00:27:58] You can create custom lists. One really cool thing about Octane AI and Facebook Messenger that's different than e-mail, is that if we wanted to collect more data from the customer - so it could be it's even their e-mail address or phone number or something else, maybe we want to know what's your favorite color or what's your shoe size or something like that - we could send out a question automatically and then as they answer it, we could be putting people in the customer segments that you could retarget later.

Matt: [00:28:26] So if you wanted to reach out to people who like the color blue, you could do that.

Matt: [00:28:29] If you want to reach out to people who live in a certain area - you can do that too.

Matt: [00:28:38] And support so support is the last one. And support is super super crucial.

Matt: [00:28:42] So here's what I've seen. So I've actually messaged a huge amount of Facebook pages for e-commerce businesses because I'm super curious how they handle messaging.

Matt: [00:28:55] So almost every day I'm messaging them. I must have a message like thousands. At this point so. I have a really really clear view of how people and how brands are using Facebook Messenger. Here's what I've seen and when you're watching this, see if you relate to any of these.

Matt: [00:29:11] 1) These brands don't respond to Facebook Messenger messages at all. So you send a message in, and nobody responds. I recently was talking to a big brand and they'd only responded to one Facebook message in the past year. And when we went in there we checked it out, they had tens of thousands of messages. So tens of thousands of people had messaged them in the past year. They'd answered one of these questions and this is like, I don't want anybody to be in that scenario. That's like one of the reasons we made Octane because a lot of these questions are really simple to answer.

Matt: [00:29:46] 2) The second thing is maybe the brand has set up a auto response and so you'll go message the Facebook page and say they say like oh, we're not here right now, but if you want to, you know you can go email us, or go to another channel.

Matt: [00:29:47] Engage with them here.

Matt: [00:29:48] In the third one, is maybe they do respond. But it takes forever to get a response. I've seen series where I've sent a message in where I'm like; Hey! (I really want, like, I did when I sent in a test message to a brand and I'll make it sound really enticing. I'll say; Hey, I'm really interested in buying this thing, can you just answer this question? So, it's almost like if that question was answered, like I'm a customer. Right? So you really want to get to that. And I've seen it where it takes three to seven days to get a response. So either nobody is responding, there's an auto message or it takes like three to seven days to get a response.

Matt: [00:29:51] If you're in any of these buckets then you should definitely pay attention to what I'm about to show you, because what we've seen is 90 percent of the questions that are in here, are the same. It's where's my order, how long does it take to get here? What's your shipping policy, what's your return policy? They're almost all exactly the same. So With Octane AI, you can automatically answer a lot of these questions and you can actually train your bot and teach it what phrases to look out for and then what answers to come back with.

"You can actually train your BOT and teach it what phrases to look out for and then what answers to come back with."

Matt: [00:30:24] And it can capture the majority of these super super common questions that you're getting every day. So instead of like hiring a support team and spending a lot of money on humans, just have one bot that's way more affordable than these humans, go out and be your first line of defense and answer all these questions. And then in the scenario where the bot, where Octane AI doesn't know the answer, then it can pass it over to wherever your humans are, wherever you're ticketing system is. So if you want to send it to an email or a help page or you want to loop somebody in right there, that's how you want to use Octane AI. And when you start doing campaigns and flows on Facebook messenger, so if you're already doing this you're naturally going to get an increase in the number of people who message you back, because you're messaging more people. So it's really important that you have this you have this support setup.

Matt: [00:31:09] The last thing I want to go over is that Octane AI, it's basically a representation of your brand. But in a conversation. Right. So this is like an automated concierge. And on your site, on your Web site, you're integrated with things like Klaviyo, Yotpo, Smile.IO and Recharge and Gorgias and all these other apps, those apps should also be integrated into your bot and into your Facebook messenger strategy. And so, at Octane AI, all those companies I just mentioned, we've done deep integrations with all of them. And so, all the things that work on your Website, all that data, all the triggers and all the things you know about your customers when they go to a website - you can also use all of that within Facebook Messenger and Octane. And that is what we do, and we are happy to help you, we have amazing customer support.

Matt: [00:32:06] And if you're not doing this right now, and you're not on Facebook Messenger, know again the brands we're working with - they're generating five to over 10 percent of their revenue from this channel and we expect over the next five years, it's very likely that messaging will be the largest revenue generator for brands.

Matt: [00:32:24] So it's going to grow quite a bit.

Johannes: [00:32:29] That's exciting stuff, Matt. Thanks for sharing. I think there's lot of questions coming through the chat which we're going to answer in a second or towards the end of the webinar. Stuart, please tell us a little bit about you and Smile!

Stuart: [00:32:45] Yeah absolutely.

Stuart: [00:32:46] Really excited to be talking here today and chatting with everyone. So, what we're going to talk about a little bit is really what Smile exists to do. And what Smile exist to do - yes, we're a rewards solution. Yes, we power loyalty programs. But really why we exist, is to help brands build relationships with their customers. And we do that with over twenty-five thousand merchants. We're the most reviewed and used solution on platforms like Shopify, and Big Commerce as well as a lot of bespoke and custom solutions, and we work with some of the biggest brands. And we also work with some of the smallest brands.

Stuart: [00:33:1128 What I mean when I say that we're helping build the relationships with customers, is exactly that. We think that every brand needs to build a community around their brand and that they need to do this through rewards or some other method. We're going to talk about a few of the other methods that people are doing it, but we think that the rewards is the easiest way for them to start doing that.

Stuart: [00:33:55] And so. This didn't always need to be the case. Brands didn't always have to build through rewards, and if we go to the next slide that'd be awesome. About five years ago, maybe seven years ago, it was a time of really low hanging fruit in e-commerce. So we're looking at some of the biggest brands that you would know, whether that's Dollar Shave Club or Blue Apron. They came up in 2010 - 2012 when Facebook advertising was a new thing. Instagram advertising didn't even exist. You could get organic reach on there and actually build a huge presence on those channels and you could throw cents at these ad platforms and get a massive audience.

Stuart: [00:34:36] And not only that, but it was even that once someone came in, the concept of e-commerce was novel and interesting and so they would stick around with you for three or four or five purchases. And so, brands could acquire these customers for next to nothing and then they have less competition and so they were able to keep those people around.

Stuart: [00:34:58] But that started to change. And so, we live in a really different world today. And this slide is showing a study that that came out in July, where digital ad rates hit a record high this past May or June. That's May / June 2018. And why that's so stunning, is that every year in lockstep, the ad rates would hit record highs at Black Friday Cyber Monday - every single year, without question, Black Friday Cyber Monday, they would hit record highs. This year was the first that that changed. So, this past May or June was bigger than 2017 Black Friday Cyber Monday. And that should be really worrying because what Joh was talking about at the start of the webinar is, we're on that down trend of the adoption curve for this channel.

Stuart: [00:35:54] And so brands that only depend on these paid advertising channels are going to actually really struggle to get new customers in the door in a cost-effective way. And not only are they going to struggle to get new customers in the door in a cost-effective way, but also there's more competition than ever to keep those customers. And so, this is what that world looks like. Blue Apron came up in the cheap to acquire customer landscape, where that customer stuck around without really doing too much. And they went public based on it. They won. They had that IPO event and they were really really successful. And then reality set in, and these changes happened, and they didn't adjust to those changes, they hadn't built a real relationship with their customers. They didn't build a community around the brand. And they've just gotten destroyed off of it. They've had the roughest time since they've gone public, because it happened right as that landscape shifted. Facebook ads were no longer so cheap, the other advertising channels, they were doing podcasting. Podcasting is now democratized. It's now going to hit some level where it's actually more expensive and you should still be doing these channels, and these channels are still useful. But if you depend on these channels and it's the only way that you grow, that's going to be really really difficult to scale your business.

Stuart: [00:37:11] How do you break free from all of this? How do you break free from the crazy cycle of buying customers for more and more money and then having them stay around for less and less time? We think that you do this through building relationships with the customers and the best brands are doing this today, and they're doing it in a lot of different ways.

"How do you break free from the crazy cycle of buying customers for more and then having them stay around for less time? We think you do this through building relationships with customers." 

Stuart: [00:37:33] If you look at Lush Cosmetics, they have an awesome social cause and social mission where they don't test on animals. They have ethical testing standards and they've built a really great community. Their product is really great as well so that helps too. Patagonia has this brand rallying point where they, almost to like their detriment, value the environment and value environmental causes where on Black Friday Cyber Monday - they'll say don't buy things from us because we don't want you to buy things that you don't need. Barstool sports. They've built a crazy community of people who read their content and not only read their content but engage with their author. So, Barstool gives all of their writers their own social channels, that are branded as far as Barstool social channels where they engage with everybody. They not only have a Barstool Instagram, but they have regional Instagram's where in different regions they have a Barstool Instagram that's putting out content specific to that audience. And there's a Canadian one that's like really funny for Canadians but people in the States probably wouldn't find it funny at all. And then obviously there's those rewards. And so Starbucks is one of the great great reward programs, and they've seen their brand grow obviously through producing a quality product and creating that great experience, but also through tiering that customer in a highly repeatable purchase in a reward program. So that customer, and a lot of you are probably a part of the Starbucks program, you're trying to work up to that gold status and then you're working to keep it and you get perks and benefits for doing that.

Stuart: [00:39:17] And so when we look at how that works in rewards, we put it through this joint engage share model. And so most e-commerce retailers who aren't thinking about their customer this way, really have like first impression, whether that's on an ad or a social post or something, the customer's first seeing them - they might make the sale, they might not make the sale. And that's really it. Then they might get a second purchase from them, because they run a discount through e-mail. That's honestly how probably 50 percent of e-commerce retailers work today. Is they'll get that first impression, maybe they'll run a discount on email, then it's the second or third purchase, but they don't have any real engagement with that customer.

Stuart: [00:40:05] So we want the customer to join - what that means is not just making a purchase, but giving us some other level of information, probably creating a customer account and that customer account gives them a Rewards account as well then they can engage. So, engaging does mean making the second or third purchase, but it also means sharing on Facebook, it means giving us your birthday, or completing a product review, and incentivizing them for doing that. And then once they've joined - once they've engaged, then they can share on the brand's behalf. So, go advocate for your brand, share on Facebook, or share on social with your referral your URL and actually get credit for doing so. And so, when we talk about all of this, this is all great and it makes sense for rewards and it's going to change your business. It will be great. You should totally do it. But The topic of the webinar today is not how you change your business with rewards.

Stuart: [00:41:03] It's how we communicate effectively and how we personalize that communication and so rewards does have an impact on this. It has a really big impact on it. And how does it affect your communication. There are two great genius scholars Michael Scott from The Office and Malcolm Gladwell. Michael Scott - if you don't know The Office, it's pretty popular TV show and what he talks about is how comedy clubs have a two drink minimum because an audience should be drunk when you like, when the comedian is up there, and you will laugh at all the jokes that way. And Malcolm Gladwell on a recent talk with a writer from The New York Times, talked also about comedians and he said not only is a comedian in the right audience, because the audience has probably had a few drinks in them but also, they know what that audience likes. The audience has been trained to laugh at the content. They know what city they're in and they know the demographic details of that audience probably because they know who's traditionally come up to their shows.

Stuart: [00:42:09] And so what does this mean in e-commerce. Because the comedians have figured out how to get their best audience to get the content to display the best. And so, in e-commerce. This is an audience who loves you, loves your brand, loves what you're doing, actually has a real connection to your brand, and also an audience who you understand, who you have useful data on, who you know what they like, what they dislike, you understand different points about their lifecycle, when they should repeat purchase, when they're going to move into their next year when their birthday is. And so, with rewards, we're able to give you that audience. We're able to create a customer who loves your brand, who's connected with what you're doing. And we're also able to get way more actual information about a given customer. So, it's not just an email that made one purchase but it's a customer account. You probably have gotten them to opt in to Facebook messenger, so you got their Facebook Messenger data. You've probably gotten them to give you their birthday. You probably have them in a tiered program and so you know how committed they are and what other people in the tier act like. And we're putting them through that joining share model to get them to this point.

Stuart: [00:43:42] So this is the Klaviyo dashboard who I know Blackotter loves Klaviyo. I know Octane AI loves Klaviyo and Smile loves Klaviyo.

Stuart: [00:43:49] So this is the Klaviyo dashboard from one of our Shopify plus brands who's using Smile and Klaviyo. And this is their segment from non-reward members. So, they're getting a 32% open rate. They're getting a 1.75% click through rate. They've asked me that to take out their average order value.

Stuart: [00:44:09] But this is a decent, this is a decent set of stats and this is probably what a lot of brands are seeing. But when we look at their cohort that are in the reward program, that is a crazy jump where 52% of people are opening their emails. They have over 50% open rate. That's absurd.

"...When we look at their cohort that are in the rewards program, that is a crazy jump where 52% of people are opening their emails. They have over 50% open rate. That's absurd."  

Stuart: [00:44:29] That's on every e-mail that they're sending to this segment over the last 30 days and almost 6% click through rate that they're seeing on these customers. And they've done some interesting things with this segment because they know that they're going to engage with them deeper where ahead of Black Friday Cyber Monday, they sent a campaign to the segment where they gave them early notice about the deals that they were running, and they saw, because they gave them early notice about the cyber Monday deal, so that they wouldn't be upset if they bought on Black Friday. And then on Cyber Monday, they saw 2X what they had predicted that they would have gotten based on historical data and the only thing that they could possibly attribute it to is that they gave early notice of the deals to their reward program members because they can't get it from any ads that they ran. They can't find attribution on anything. They just see word of mouth. And the only people who would have known about it where the reward program numbers.

Stuart: [00:45:24] So if we're seeing those results on email. Where else can we see that?

Stuart: [00:45:29] We know that these are engaging segments. We know that these are personalized segments and personalized content. And so why don't we take this on site. So, we did an integration with Privvy, where Privvy is able to target on site displays based on reward program data and then actually use that content in the displays themselves. So; Hey - you're already silver member, join our email list to earn more points. But I can get a little bit deeper in the funnel where; Hey - you are a third tier VIP; did you know that there's this event coming up that we're doing for VIPS. Different types of content you can display to someone on site and not just on site or an email, but what about retargeting.

Stuart: [00:46:07] We know that ads aren't working that well but if you can craft a compelling customer journey over retargeting, that leverages rewards; so, sending a campaign over retargeting to everyone who has enough points to redeem or reward but hasn't done so yet. That's a really compelling audience who's going to want to actually convert on that ad. And we're seeing crazy return on ads spread through the campaigns that we're running. This is with Shoelace, and this integration is coming out and they're seeing really really big results through those. So retargeting on site displays, email, and then obviously messenger. So, Messenger also needs this data and having someone opt in and be part of the reward program, but also receiving content through messenger, gives you even more ability to hit them with really targeted messages about the reward program at specific points in their customer journey. So, if someone has made a purchase, seven days later, let's let them know about the referral program and ask them to share it out and actually give them the referral link in line there. We can see some crazy results and actual conversions from that. So that's sort of the broad reach of how rewards can impact communication.

Stuart: [00:47:26] Obviously there are tons of other ways that rewards impacts your business. We see huge increases in CLV and advocacy but for the purposes of today we're convinced after seeing the data, that not only will improve your CLV and advocacy, but it actually improves all of these communication channels that you're already doing. So, I think we're going to probably go to questions now, but I'll toss it back to you and you can do that that component.

Johannes: [00:48:18] Thanks dude. That was really great.

Johannes: [00:48:22] Thanks for kind of supporting everything that we discussed with data. Very excited that Smile.IO and Octane are integrating. Which was actually our first question. But maybe you could speak a little more to that. How does Octane AI and Smile.IO integrate?

Stuart: [00:48:45] Smile is the world's biggest rewards provider and Octane AI is the leader in Facebook Messenger, so it would be silly if we didn't talk to each other. And so, what we're going to be doing, is using different variables from the reward program to hit the customer at specific points in their lifecycle.

Stuart: [00:49:10] So the example that I'll use is that referral link. Traditionally a customer needs to go to the site to see their referral URL. Maybe they've set up a campaign over email that'll send seven days after purchase to show them the referral link. But often that campaign isn't getting interacted with or it has lower engagement rate. So, we thought what would it look like if we hit someone on Facebook Messenger. We know they're going to open it and not just hit them out of the blue but as a part of a conversational journey. So if someone's asking about their product and they have a few questions then you can have the bot follow up after they ask about the product to say; Hey! Did you know that we have a referral program? Here's your link. You can go you can go share it with friends, and so there are a lot of different ways that we'll be able to utilize it. That's the one that we're focusing on at the start. But I think there's going to be a lot of different options as we move into the future.

Johannes: [00:50:07] Great. Cool. Our next question is for Matt. For brands getting started on a chat strategy, what should be their main priority? Secondly, what's the best way to leverage off their existing email database?

Matt: [00:50:26] Got it. OK, so great great question. So 1) if you're a brand, and you're getting into Facebook Messenger and Octane AI was the first thing to do. And 2) the second question is how can you leverage your existing email database to do that. So as I was saying before, the three pillars when you look at real time messaging for e-commerce; is grow, support, engage. And grow is where you get people to opt in. Engage is where you're gonna be able to send them those messages across the customer journey. And then support is when they're asking you questions as you reach out to them, you can automatically answer those. Engage and support can't happen unless you've done grow first.

Matt: [00:51:04] And so the first thing you need to do, is you need to make sure that you have your opt in strategy and your growth strategy in place so that you are constantly, every day, that list on Messenger is going up into the right. And then once you've kind of figured that out, then you can then you can be sure that all of those campaigns and flows you've set up in the Engage section and all that Q and A you've set up for support is actually going to people. So the first thing you want to focus on is growth.

Matt: [00:51:35] So figure out; are you gonna put a checkbox below add to cart? Are you going to use the Octane AI plus Privvy or Justuno integration to include the checkbox in that marketing opt in pop up. Are you going to run Facebook ads? And I would recommend you do all three. But those are the things you want to figure out.

Matt: [00:51:52] When it comes to leveraging emails - so this is a really great question and there's definitely a lot of things you can do. There's two things you can do and two things I'll talk about. So one - there is a way to create a pre-scripted conversation in the bot and then get a URL to it that you URL in an email. So when people click the URL and email, they'll get connected to your bot and a bot conversation will start. The second thing that you can do, is you can make a landing page on your website. So it could be like /concierge or /chatbot. Whatever makes the most sense for you. Or even like /consultation or /product quiz or something. And on that page, you can put a button that when people click it, it would start a conversation it would take you through that quiz. Or it would give you whatever information you needed and then you could email that landing page to your customers and maybe you give them an additional discount code or some sort of additional incentive once they've started that conversation. And so, you can send an email out to everybody and say; Hey! We have this new find your style thing. Like go talk to our chat bot to find the right bag for you or whatever it is that you're selling. You send the link to a landing page, they get on the landing page. It says click the button to find the perfect bag for you - you click it the bot messages to you and it's like; what kind of bags do you like? What's your favorite color? What are you gonna do with the bag? And Then it recommends it and gives you a discount.

Matt: [00:53:20] That's how I would recommend leveraging your existing email. You can also include a link to your bot in the bottom of every email that you're sending out.So the same way that you're linking to your different social media accounts - you could do the same thing with messenger.

Johannes: [00:53:40] Great. That's some really great strategies to implement. We've got another question for you, Matt. What are the biggest mistakes you've seen companies do when they get started with chat bots?

Matt: [00:53:55] Yeah so; one big mistake is if you try to focus on engaging and support before you focus on grow. That's a big mistake. So, you definitely want to put together grow first. The second thing is, it's really exciting to be able to send people push notifications because when you send it to them, like their purse vibrates, their pocket vibrates, if it's on the table, the table is going to go buzzz, and then it's going to be right there on the street. So it's like this really really incredibly powerful message. And so you don't want to get so excited that you start abusing this channel. And so I would say the biggest mistake that you could ever make, is if you don't respect the channel and you start sending too many messages and you start sending messages to your entire list constantly. I think that's a huge mistake.

Matt: [00:54:47] What you want to do instead, is you want to set up beforehand, when you're still working on engage, these automated messages that are going to go out throughout the customer journey. And so instead of blasting everybody the same time all the time, you're messaging people on a personal one to one basis when it makes sense for them.

Johannes: [00:55:06] Great answer. It's kind of along our first conversation where you don't want to spoil that channel for everybody else and send it in decline just by abusing it.

Matt: [00:55:19] One way to think about it is like, let's say it was a retail location, like let's say you had a physical location, right? And let's say that when the customer walks in, you have a person that works there that just comes up to the customer every 20 seconds and is like; Hey you wanna buy this thing? Hey, you wanna buy this thing? So obviously face to face is like the most amazing channel you could possibly have, but if you have someone walk into your retail location, you're not going to abuse it like that, because if you do, they're going to call the cops on you. They're going to leave that store running and they'll never go back. So, when we're on Messenger, you've got to think about it the same way.

Stuart: [00:55:53] Yeah. I think about it as, Messenger - because it's closer to the customer, it accelerates the best and the worst characteristics of marketing. And so, if you treat it well, it will crush for you. And if you treat it poorly - it will do a very good job at annoying your customers.

"Messenger - because it's closer to the customer, it accelerates the best and the worst characteristics of marketing." 

Johannes: [00:56:15] Nice. Alright - so just for everyone in the chat, we've probably got time for one or two more questions. So, let's try and squeeze them in. Question for Stuart - do we still need an affiliate program when using Smile.IO?

Stuart: [00:56:33] Yeah - this one I'll do real quick. So, Smile is focused on engaging that end customer, someone who's making a purchase. Affiliates are really focused on a pseudo professional. Someone who is earning some monetary gain for being an affiliate on your behalf. They can work in tandem with one another. And most of our brands are using some type of affiliate technology, as well as Smile. So, they're sort of - complementary to each other.

Johannes: [00:57:05] Great. And then, fun question to wrap up - what did day one look like at each of your companies?

Matt: [00:57:18] Well the sun rose, and it was beautiful and the birds they just hovered around because they knew it was a special moment. And it was at that time that Octane AI was born, and we came together. No, I mean, day one, I'm sure Stuart will agree, day one is like - I have an idea and it is crazy. And we need to figure out how to put this together. For Octane, we just saw that billions of people were using messaging apps and that's where they were spending all their time. And it made perfect sense that all businesses were going to need a way to engage with people on this channel, and nothing like that existed. And so, day one, we started on that journey to make Octane AI possible.

Stuart: [00:57:57] Yeah. On the Smile side, we were originally an agency. We were building websites for merchants. And there was no good rewards solution out there, at least that they could use. So, a lot of people were asking us to make one. And when we decided to make one, our co-founder Steve actually pre-sold the rewards platform on some forums and when he had 20 to 25 people buy it, then they figured oh shoot! We should probably build this now. So that's what day one look like.

Johannes: [00:58:40] Awesome. All right. Thanks for everybody for joining. Guys thanks so much for the wealth of insight and knowledge here. There is some really good actionable strategies. We learned a lot.

It's all about jumping on and on the right channel, for the right brand at the right point in time. So I think I think we have a lot of things to take away and a lot of things to action. Thanks everybody again.