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Ep. 12 - How to Leverage Subscription Revenue Channels on Shopify with Rob Barr

Rob Barr leads partnerships and enterprise sales at ReCharge, a subscription billing platform for Shopify. He manages strategic relationships with global partner agencies and some of the largest subscription brands on Shopify. Today, Rob is going to share how you can adopt new subscription revenue channels and optimising existing ones on your Shopify store.


In This Conversation We Discuss:

  • [3:30] Why a lot of stores are adding or transitioning to subscription models
  • [4:55] Who can use ReCharge
  • [5:30] The most successful and disruptive subscription models that Rob has seen recently (check out Dr. Axe and My Lola)
  • [7:00] Did Amazon help consumers better accept the subscription model?
  • [8:50] Other merchants who are doing a great job at optimizing their subscription channels
  • [12:00] How easy is it to set up ReCharge, out of the box?
  • [14:20] How successful subscription models are leveraging technology, especially with marketing
  • [17:00] What ReCharge subscriptions look like in the backend of Shopify

Resources:

 

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Transcript:

 

Rob Barr

Again, we've been approaching this in a very similar fashion to Shopify. We don't want to be experts in every single field. We've got our core thing, which is subscription billing. So, we spent a lot of time thinking in the last 18/24 months, identifying which technologies people are using, why they are and where we can organically connect with them.

 

Annette Grant

Welcome to Honest eCommerce where we are dedicated to cutting through the BS and finding actionable advice for online store owners.

 

Chase Clymer

I'm your host, Chase Clymer.

 

Annette Grant

And I'm your host, Annette Grant.

 

Chase Clymer

And we believe running an online business does not have to be complicated or a guessing game.

 

Annette Grant

If you're struggling in scaling your sales, Electric Eye is here to help. To apply to work with us, visit electriceye.io/connect to learn more.

 

Chase Clymer

And let's get on with the show.

 

Annette Grant

On this episode of Honest eCommerce, we talked to Rob Barr, the lead of partnerships and enterprise sales at ReCharge, a subscription billing platform for Shopify.

 

Chase Clymer

Hello everybody and welcome back to yet another episode of Honest eCommerce. I'm sitting here next to Annette Grant, who's smiling ear to ear. And today we welcome to the show a subscriptions expert, Rob Barr from ReCharge Payments. So Rob, what makes you so expert-y at subscriptions That was a terrible word but we're going to keep it.

 

Annette Grant

(laughs) And I'm smiling. I'm excited to talk to you, Rob. And learn about subscriptions.

 

Rob Barr

I like the expert-y term. So for myself, I've been with ReCharge now for 2 to 3 years. When I joined, we're a very small team of five. We've now since scaled up to around 75. So with that, we're really seeing the trajectory of both ReCharge and also just subscriptions in general, on Shopify in particular. And just seeing how it spanned away from just smaller merchants on Shopify, testing out the model, transitioning over to these huge conglomerates and you brand new direct-to-consumer brands coming into the space, and really taking this to a whole new scale. So just having visibility in the last three years, I feel, gives you some expert-y skills in the arena.

 

Annette Grant

Do you want to let our listeners know, give a brief description of ReCharge and what it does for the Shopify store owners?

 

Rob Barr

Sure. I'm sure everyone on Shopify knows they try and give you around 80% of all you need to run a business out of the box. But there are those nuances and particular elements to a business that they don't offer out of the box directly. And with that they tend to rely upon like a 20% model with experts in their fields, and that there's something from the platforms that they can plug into.

 

And also, as with there Chase from Electric Eye, also the agency side as well. And for ReCharge, which it came out of an agency about five-six years ago... And part of that agency was looking at new areas on Shopify where the core offering wasn't covering, or giving the merchants the best experience. And there was no and there's still is no recurring billing tooling within the Shopify platform. It's all external.

 

And so with that, we're the only Shopify Plus Technology Partner for recurring billing. And so with ReCharge, we handle the entire subscription lifecycle for both subscribers and owners who want to offer a recurring revenue model on their storefront. Be it a subscription-only box, or alternatively that kind of consumable Subscribe & Save model.

 

Chase Clymer

Absolutely. So I feel that... And you can give me... This is just my opinion here, but I feel like the subscription model, maybe a bit more in the past year or so, was not gimmicky but definitely like a buzz term in the eCommerce space. Do you feel that you saw an uptick of stores branching out from their traditional model and adding in like a subscription thing?

 

Rob Barr

Yeah. There's definitely been a range of that. We're also seeing certain brands transition, whereas before they were no one-time purchase first. Now, the primary objective, and it's all the call to actions are around subscription by default, or even brands whereby the only option to purchase is just their subscription model.

 

Arguably, there are larger merchant base out there, but also relatively new, since as you say, it's historically seen as quite gimmicky. A lot of it was down to the fact that tech stacks, historically, were kind of opaque. For both the subscriber; It's been very difficult to navigate, cancel, control, edit; And the same for the merchants as well, not a good experience.

 

All that's changed. So we can give that subscriber an emotional experience out of the box. It removes a barrier to entry and also a lot of the fear about setting up a subscription business.

 

Annette Grant

And did you say... Is ReCharge only for Shopify Plus store owners or is it available to everyone?

 

Rob Barr

We are available to everyone.

 

Annette Grant

Okay.

 

Rob Barr

Shopify Plus merchants, we've only two, have gone through the Plus vetting process. Things like scales, stability, etc.

 

Annette Grant

Okay, great. I just wanted to confirm that.

 

Chase Clymer

Yes, I've actually used ReCharge on quite a few client applications this year already. So it's a great platform. And again, I say this every time I have like an app partner on. He's not paying me to say this, I'm trying to bring quality to the people.

 

Annette Grant

And so with my store, if you wanna... Could you give me some... Give us some examples of the most successful new subscription models you've seen recently? Kind of disruptors?

 

Rob Barr

Yeah, of course, I think it spans two areas. One is the expectant model and then one's where it's kind of a bit of a curveball for us as well. I'd certainly expect inside... If you're a consumable brand, and you really want to look at best practice for how to approach things like incentivizing subscription over a one-time purchase, looking at things like incentivized trial flows, I would say Dr. Axe are a fantastic example of a merchant doing that at scale.

 

Annette Grant

Can you spell that? Dr. Axe? Is that what you said?

 

Rob Barr

Yeah.

 

Annette Grant

Like A-X-E?

 

Rob Barr

Yeah. Like Doctor then A-X-E.

 

Annette Grant

Okay, I'll check that out.

 

Rob Barr

A similar vein, My Lola, they're a very new brand. Only 2 to 3 years old. They've come in to transform the feminine hygiene space with natural products. Getting away from concepts of highly chemical, traditional model. And again, it's subscription-only. For them, they've really optimized the idea of the customer narrative.

 

So, how do you truly engage with your consumer base, and transform it from a transactional experience where you're just buying a product, one or two times from them. But you are part of the business, it's conversational.

 

That's more of a partnership between consumer and merchant. And that's all driven by the subscription model. So, driving that conversation wherever they can and the engagement.

 

Chase Clymer

And that is amazing. So I have a sidebar question. Do you feel that Amazon, with their introduction of the Subscribe & Save model, helped increase that acceptance into the public and maybe help these businesses use that model to their advantage?

 

Rob Barr

Absolutely. Amazon, where they are... They are smarter at what they do. We're at the point now where a lot of our default terminology that we use is around Subscribe & Save since it's just so embedded now in the consumer mindset. It just makes sense. And see, I think that's true. And also a lot of trust, as well.

 

The consumer base, they understand now what the model, is how it works. They can edit, they can cancel, they have control, which I think Amazon has done a great job of. And I think also interestingly, --and this ties into this idea of the curveball I mentioned earlier is-- Amazon's still pushing new boundaries and subscriptions.

 

So Amazon Prime, where you're subscribing or becoming a member for something that isn't necessarily a physical product that arrives on a certain frequency. You're more became a member to get access to fringe benefits. We're now seeing that being adopted as well by our consumer base.

 

So a great example of this is the company, Freshly Picked. Where it's a high end, child's moccasin, which historically we would've said is not a great fit for subscription (services). But what they've done is implemented a membership model where you sign up, any money you paid towards membership accrues its credits, so you can use that at any time.

 

But more interestingly, you get early access to new products, the product line, their launch, free shipping on any purchase. It's going to give that gated access and community that you don't get by being a single transactional consumer.

 

Annette Grant

That's a great idea that I haven't really... I don't utilize that in my store, but that is smart to get that early access. Besides Dr. Axe, My Lola, what are some other merchants that are just doing a great job of optimizing their subscription channels, that our listeners could go to and check out what they're doing?

 

Rob Barr

Sure. I think a good example right now is Bulletproof Coffee. They're doing a great job of approaching subscriptions in a very personalized way. So, you go through their purchase flow, you're building out a bundling of products that are really aligned with your needs.

 

A similar merchant as well that really enjoys purchase experience is a company called, We Are Ladder. It's actually founded by Arnold Schwarzenegger and LeBron James as their protein brand. And again, a very similar flow where you're not going through self-identifying a product you want to purchase.

 

It's taking you through a kind of a quiz whereby you say no, I'm a male, female, this age bracket, this is how active I am. Here are my goals. And with that, they give you a curated experience and say these are the products, the frequencies that we think are most aligned with you.

 

And then beyond that, again, really tying in that conversational narrative whereby... Think of it as the street view as a consumer. They know who you are. Targeting you with very appropriate content. They're upselling you with the appropriate products where necessary. So I think they're both really good examples of really optimized subscription purchase flows. But also, again, that ongoing relationship and how that's being handled.

 

Annette Grant

And is ReCharge, is it only subscription on physical products? Is there any digital product at all?

 

Rob Barr

Historically, we've very much been a physical product service.

 

Annette Grant

Okay.

 

Rob Barr

The reason, just being the Shopify itself. Naturally has been a...

 

Annette Grant

Right.

 

Rob Barr

...physical product platform.

 

Annette Grant

Okay.

 

Rob Barr

We are seeing a breakaway from that into digital. The caveat to that is that the digital can be a little bit more complex. I would really advise, if you're approaching digital subscriptions, engage with experts, like Electric Eye, to really work with you on that because there's a lot of nuances and...

 

Chase Clymer

A lot of moving parts.

 

Annette Grant

Gotcha. Okay.

 

Chase Clymer

I actually... With all these examples you brought up, it's actually something that I want to challenge our listeners to go do. So, go look at every single subscription --not all of them-- but go look at a few of them. And you'll notice that all of them are vastly different.

 

And anytime that we engage a project with a client to help them with their subscription model, they haven't thought it all the way through. And I want to be blunt here. They'll be like, "Yeah, I want subscriptions. I want like... This product, we're going to have a subscription thing to it." We're like, "All right, cool. So is the free shipping on the first order? What about the second? What about all the concurrent orders? How do the discounts work?" There's so much to consider and so much to figure out and think about. It's its own little business.

 

Rob Barr

Yeah, I would absolutely agree with that. Chase. It's very rare. You have an out-of-the-box, cookie-cutter solution. Particularly when it comes to any period of scale or enterprise-level merchant base.

 

Annette Grant

So, is that something that ReCharge would walk the customer through when they install the app? Or would they need to get, like an Electric Eye, to help them out with that? How out-of-the-box is it easy for someone to set up?

 

Rob Barr

It's very simple to get setup. We have our support team, we have webinars to guide through kind of basic installation.

 

Annette Grant

Okay.

 

Rob Barr

But it's normally getting to this sort of idea of you know, as Chase mentioned, how do we dig into incentivizing flows and also the negative purchase funnels. But anything that's a little bit out of the ordinary, that's always either work with our teams’ consoles and work on what a solution for to look like, and then definitely work with experts to actually get that implemented in a successful fashion.

 

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Annette Grant

And then what's the fee for ReCharge? Is it a one time fee? Or is that monthly?

 

Rob Barr

We're a monthly fee. And that's variable, depending upon the monthly recurring revenue, of course, the platform. And there are varieties then depending upon scale. So yeah. Our default fee is $40 a month and a 1% processing fee. But at scale, that does vary. So I'd say at that point, just ping the team and we can give you guidance on what the fee would be there.

 

Annette Grant

Great. Wow, that's really affordable though to get into the game, if you want to give it a try.

 

Rob Barr

Yeah, and you know. We really start charging you when you become a successful business. So it's kind of a win-win on both sides.

 

Annette Grant

Right. I think that's a low risk for people if they're on the fence about trying it. I mean, it's already built there. I think if they're on the fence, definitely just go for it at that price.

 

Rob Barr

We do have a 60-day free trial. So again, you have two months to see if it's working and valid for your business or if you're gonna optimize it in that two-month window, it's always available as well.

 

Annette Grant

That's great.

 

Chase Clymer

How are you seeing these businesses leverage other technologies with these subscription models? And especially with marketing?

 

Rob Barr

Yes, it's a great question. And again, we've been approaching this in a very similar fashion to Shopify and that we were... We don't want to be experts in every single field. We've got our core thing, which is subscription billing.

 

So we spent a lot of time, particularly to the last 18-24 months, identifying which technologies people are using, why they are and where we can organically connect with them. And so there's at least two or three, that I'd say, are really prominent in my mind.

 

First is Klaviyo, which if you've not heard of them, is a great marketing solution. We've seen them being used to great success with ReCharge. And again, tying back to conversational commerce, making sure the right contents going to the right people at the right time. And I was looking forward to their conference late last year.

 

And seeing the merchants in that conference, it's very much almost a cult-like (laughs) engagement with the platform. They really do see this huge impact on their personal brands. And a lot of them credit the entire success, the business, down to the impact Klaviyo has had. So, I'd highly recommend taking a look at their solution, particularly if you're using ReCharge as well.

 

And another great tool that we've seen... This is quite idiosyncratic to ReCharge. In that, we have our own checkout environment that is really making sure that your data is consolidated across both one time purchase and recurring, and you've got the same visibility into your Google Analytics.

 

So with that tool, that we were very much a proponent of is Littledata. And they're great at predicting the ReCharge standpoint and making sure... They can really, genuinely, attribute LTV back to certain campaigns. Tying-in things that your cohort analysis to make sure that you're really putting in the cash to marketing and your efforts there, appropriately and effectively. So, I really would suggest looking at those guys.

 

And then moving beyond that, just kind of go into the day to day of the business, there's some brand new tools out there --I say, brand new-- relatively new tools out there in the support space. One, in particular, is Gorgias. Kind of a strange spelling. They're a great support desk built for eCom. Shopify is one of their biggest integrations.

 

And with us, it's also tying in that ability to handle support requests about your general eCom but also with subscription, all from the same place. So really, removing the time drains on the team internally.

 

Annette Grant

I have a question about how the subscription starts showing up at the backend of Shopify. If I were to fire up a subscription model and I just.. --I know it's different-- Maybe some things are shipping out daily, or maybe it's just a once a month drop.

 

Was all that stuff just suddenly populate in your Shopify orders? or do you prompt... Are you prompting the store owner ahead of time? What kind of reporting like... How does that change shipping, order fulfillment, things of that nature?

 

I know that's a large question, but I'm just wondering if I fire up the subscription, do I see it in my sales? And then I... Then does it reoccur again, to ship it out? I'm kind of just like, "Wow, I can't really wrap my head around how that starts to populate in the back-end and then have to fulfill those orders.

 

Rob Barr

Sure. Very short answer is, yes. All of the above. But to give a little bit more context, we do have very deep integration with Shopify. So yes. If someone goes to the checkout for ReCharge, we'll generate a customer record for them in Shopify and then also generate an order in the Shopify fulfillment queue, same as a one-time purchase, and then all the subsequent logic about when and how our customers are billed, we'll handle that. We'll also handle things like dunning. So in the event of a failed transaction, we will automate what we can to recapture that payment.

 

Annette Grant

Okay.

 

Rob Barr

And whenever we can, we have to get after that payment, we'll push orders into Shopify. So your fulfillment queues, they're all the same. Notifications, all our communication channels are handled by ReCharge, as well. Customizable, so we wrought on-brand.

 

But it's really a hands-off experience. Once our thing is set up, its customers go through. The only interaction from the merchant standpoint is in the event of a support request, or maybe intervening if there's been an issue with someone's payment, for example.

 

Annette Grant

Mmkay. And then there's reporting for us, as far as being able to make sure that our inventory is stocked in time for that subscription that needs to be fulfilled the next month. Are those really robust reports you can get in Shopify, for your subscription?

 

Rob Barr

They are. Yeah.

 

Annette Grant

Okay.

 

Rob Barr

So we have tools around respecting Shopify inventory. And then yes, we also have things like upcoming order reports, which you can pull ahead of time. Make sure that you're pregaming your inventory and there are no excuses. Suddenly, "Oh, I have 1000 people tomorrow ordering this one product and it is not available." So yeah, we definitely try to make sure that doesn't happen.

 

Annette Grant

Yeah, that kind of goes along with like, Chase saying customers... Say, I want to start a subscription. And then all of a sudden, I just went into like, Yeah, that's a great idea. But then I started thinking about inventory and fulfillment of like, "Wait a second. That's a whole..." Like Chase said, it's almost like a sub-business of your current business to make sure you're managing that profit...

 

Chase Clymer

Yeah. Are you shipping all of your orders out on the same day? On the day that they originally placed their order? And also with billing. How are you doing billing? It's so much stuff.

 

Annette Grant

Okay. Well, I have a lot to think about. (laughs)

 

Chase Clymer

Oh yeah, you do, Annette. Annette was like, "I'm gonna start a subscription t-shirt..."

 

Annette Grant

Yeah. Like, I'm launching it today. Let's do it! I'm signing up. But I'm going to pause and think about that one for a little bit.

 

Chase Clymer

Oh, you'll be... It'll be fine. So, outside of subscription... You're in the eCommerce space every day. What are some tips and tricks that you picked up along the way that you'd want to share with our audience?

 

Rob Barr

The one thing I just said that I would say to Shopify merchants is to make sure you're on top of your integrations game. There's plenty of people out there every day launching new apps, new platforms, that are really aren't that optimized for your business.

 

And so, we see merchants migrating over from different platforms and they come through with a particular set of requirements which when you really dig in and say, "Half of these, you can just completely automate or be hands-off with through tools like Klaviyo, for example. Gorgias, Littledata... --To reference the ones I mentioned earlier."

 

So I'd say A - Make sure that you actually have installed all the ones that make sense for you but also keep a finger on the pulse.

 

Make sure as they're launching a new release new integration or the tooling, that you're always rethinking. It's almost doing an audit, I'd say, every, at least, every six months of your tech stack to make sure that... A - It's optimal for what you're doing and B - All those pieces are talking to each other in the best way.

 

Chase Clymer

Yeah, I feel like every app is actively working on... Especially the top players. I'm definitely a Klaviyo evangelist over here. It's one of my favorites. All of them are, more and more, creating integrations between each other so that they work together, share data and you can create flows and create incentives and create just...

 

It's usually on the marketing side or anything really. But they that they're actually talking together. And if you've set it up once and that wasn't there the first time, you got to make sure you're going back in there, checking out the new stuff that gets added every couple months.

 

Rob Barr

Absolutely. So, with that as well, think about why you're on Shopify and not on Amazon. There's something our CEO, Oisin talks to about a lot is, this idea of commoditization versus rich experience. You're selling to Amazon, you have a very limited way of communicating with your customers or limited ways of showcasing your product.

 

With Shopify, you can start to build out a richer experience, more as though you're almost in store. How do you have a narrative? How do you engage their customers beyond just raw basic PDPs? How do you communicate an after-purchase?

 

There's so many opportunities there to have a better experience between the merchant and the subscriber or just general consumer. So just leverage Shopify. Make sure it's not just there as a standalone Amazon clone, as it were.

 

Chase Clymer

Absolutely. I mean, I think Amazon definitely brings technology to the game. They're actively just doing crazy, cool stuff in the space. Their margin is... They're doing so much business that they can do the slimmest margin so you got to have a better experience with your brand and really incentivize and captivate and wow --and your customer experience gotta be top-notch-- if you want to compete on eCom these days.

 

Annette Grant

Build a community. That's what you need to do there also. Rob, Do you want to point our listeners to where they can find you and where they can find ReCharge?

 

Unknown Speaker

So the easiest way to find us is through rechargepayments.com. From there, there's a big call-to-action, "Get your free trial", which will direct you off to the Shopify app store where you'll download. So yeah. If you have any questions our support team is always available support@rechargepayments.com. Or if you like to grab me directly, I'm irrelevantrob@rechargepayments.com as well.

 

Annette Grant

Well, we're so thankful that you came on the show today. I know I'm excited to check out the brands that you spoke about. It has my wheels spinning about what a potential subscription is for my community. So thanks for being on the show. And hopefully, we'll talk to you again, once I have my subscription up and running.

 

Rob Barr

Well, Annette, Chase, really appreciate the time today. It's been great chatting with you both.

 

Chase Clymer

Thank you.

 

Annette Grant

Awesome. Thank you.

 

Chase Clymer

We can't thank our guests enough for coming on the show and sharing the truth. Links and more will be available in the show notes. If you found any actionable advice in this podcast that you'd like to apply to your business, please reach out at electriceye.io/connect.

 

Annette Grant

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