#4 - How SMS became a core conversion & loyalty channel for Chomps

Welcome back to Don’t V*LOOKUP ☄️ , where we explore how top commerce operators and practitioners leverage data to make critical business decisions.

In this installment, we dive into the story of Zoe Kahn, former manager of CX & Retention at Chomps and host of the Let’s Laugh About It business podcast, who transformed her approach to data from one of fear and frustration to a lever for significant business growth.

🎯 The TL;DR on what you’ll learn in this post 🎯 

1. Zoe’s epiphany early in her career at Ghost Lifestyle 👻 — how leveraging data to support her own ideas led to an easier job and more profitable business.

2. How Zoe convinced the Chomps 🍖 leadership team to reframe SMS from a taboo sales medium into a performance-enhancing acquisition and retention channel.

3. Zoe’s Northstar KPI and go to tools to lower the barriers to data-driven decision making.

*for more from Zoe tune into our full-length interview above
» on her background at Ghost Lifestyle and as a gamer on Twitch
» how Chomps evolution from a small startup to a hyper growth business impacts personalization
» how operators can overcome hurdles with data adoption

🔦 The Ghostly epiphany 🔦 

Boo.

Data can be scary.

Or at least that was Zoe’s opinion early on in her career.

When Zoe started off in customer experience (CX) at Ghost Lifestyle, she would bring examples of customer complaints to her leadership team would who immediately press her to show the data supporting her claims.

And that’s when she realized how crucial data accessibility is. While she knew that Shopify held a trove of data, she also had to:

• Export multiple files from different sources of truth

• Learn complicated Excel formulas like VLOOKUP (for the non-investment banking-trained, yes…this can be complicated)

• Continue to worry about error-prone manual efforts

“Not only did I have to do my job,” Zoe said. “But I had to back up what I wanted to do with my job with all this data…and it's scary, since doing things manually leaves so much room for error.”

The 💡 light bulb 💡 switched on when Zoe discovered that, regardless of how difficult it may be to access early on, data was critical to hypotheses and experiments, and would not only simplify her job, but also drive greater profitability for the business.

"I can actually bring my own ideas, and as long as they are backed by data, I can make changes, the job can become easier, and we can make more money."

 ☎️ How SMS went from an intimate to highly converting sales channel for Chomps ☎️ 

When Zoe took over the Retention role at Chomps, they were hesitant of SMS marketing.

SMS can be seen as an intimate communication channel, especially for brands with tight copy and creative direction (I am all too familiar with from my time at Recess where it could take weeks to deliver an email).

Which is why Zoe’s innovative data-driven actions to transform SMS to a highly effective sales tool is all the more impressive.

Her hypothesis:

SMS, which had mostly been used to send sales notices a few times a year, could become a highly interactive communications and retention driver for loyal customers.

In order to test her hypothesis, Zoe ran the following experiments:

1. A/B test ‘humanized’ vs. sales messages - From sending selfies vs. regular professional pictures, Zoe measured Click Through Rates (CTRs) which went through the roof for the more conversational messaging.

2. A/B test website popups for email and SMS collection - The welcome flow popup on the website offered 10% off for email collection. When Zoe tested SMS collection ahead of email collection, Conversion Rates (based on leads collected and revenue generated from welcome flows) increased dramatically.

3. Test whether SMS cannibalizes email performance - Her team ran multiple experiments on whether customers would have converted via email vs. SMS, and found that the overlap was minimal. ** either way, Chomps isn’t fussed if customers convert on either channel as long as they keep buying **

Most importantly, Zoe was able to push her leadership team to look at the stats. Text-based messaging consistently delivers 500%+ higher conversion rates than email, and she needed to re-orient the objectives of the growth and retention teams.

She also smartly points to the continuous need for testing for a backlog of historical data.

In a world where results of some retention campaign tests can take up to 9 months to materialize, having a strong foundation of learnings is critical to making the case for future investments. 

The results of her managing up?

• SMS list size growth has become a core KPI in their executive reporting.

• Qualitatively, customers feel more comfortable to reach out to support via SMS as a conversational channel.

• Chomps has extended the SMS program to include influencers who are incentivized to push for list growth, not just sales.

🔎 Main takeaway 🔎 

In hindsight, increasing Chomps' SMS list size might appear like an obvious strategy, but it was Zoe's meticulous process of developing hypotheses, performing A/B tests, and utilizing data-driven evidence that was essential in convincing her executive team and growth colleagues to invest further.

⭐️ North star metric & key data tools ⭐️ 

As with all our guests, we wanted to know what is the ONE metric (aka North Star metric) that can be tracked to define success and the tools that can be used to lower the barriers to data-driven decisions.

Zoe’s North Star Metric:

• LTV of Customers who have or have not signed up for email or SMS lists (with at >$0 in spend)

This is a key proxy for how CX impacts the overall company revenue.

Key Data Tools:

• Postscript for SMS activation and conversion optimization

• SourceMedium (cough, I did not ask her to mention this) for detailed customer and product analysis

• Lifetimely for high level LTV analysis for email subscribers from Klaviyo

» Follow this link if you would like to book time with Zoe directly!

» And for more from Zoe and other Don’t V*LOOKUP guests, don’t forget to check out our Youtube channel.

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