2% Takeaway: Mastering Customer Retention: A Glimpse into Magic Spoon's Success - E001

Chandler Dutton is the Senior Director of Retention at Magic Spoon, a disruptive DTC brand offering a high protein, low sugar cereal that takes beloved childhood flavors and makes them healthier for adults and kids. 

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In this episode of 2% The Podcast, Chandler gets tactical on the retention framework used by Magic Spoon in their ascent to becoming of the most successful 9-figure CPG brands around the world.

You should listen to this episode if you…

• Want to grow your subscription adoption
• Are looking for guidance on what a “great” post-purchase journey looks like — more specifically one that gets customers to come back and buy again.
• Need advice on using data to inform retention marketing decisions
• Hope to better understand how to balance being both brick-and-mortar and eCommerce focused
• Seek advice on using SMS as a two-way communication channel

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Here are some of our hand-picked words of wisdom for Chandler 

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Navigating the Post-Purchase Journey

Magic Spoon's success can be significantly credited to its meticulous orchestration of the post-purchase journey, which is split into three key stages during the first 30 days.

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Days 0-7: The Transactional Stage

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The journey starts with automated transactional shipping updates powered by our friends at Malomo. With open rates as high as 60-80%, transactional emails prime customers for positive interaction with the brand, fostering an excellent post-purchase experience. This includes updates like when the order shipped out, when the order is being delivered as well as if there are any complications. The transactional channel is critical to ensuring a successful post-purchase experience

Days 7-20: Building Trust and Education

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The following two weeks are dedicated to reinforcing the trust factor and educating customers about the product. Content delivered during this phase ranges from information about why Magic Spoon is a healthier option, to a letter from the founder to tons of social proof via reviews. The focus is to deliver real value for the customer through education and reinforcement of why their product is meaningful in life. 

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Around Day 20: Gearing Up for Re-Purchase

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The focus then shifts towards encouraging the next purchase as customers conclude the education phase. The brand strategically introduces product bundles, subscription benefits, and more to prepare customers for their next order.

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Growing Revenue through Subscriptions

Subscriptions form the backbone of Magic Spoon's revenue strategy. Customers are incentivized to subscribe by offering tangible benefits, such as a 25% discount off MSRP and free shipping. Notably, the company aims to convert customers who would benefit from a subscription, rather than indiscriminately pushing subscriptions.

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Education is critical for them and they focus on clear educational messaging about control over subscription terms so the customer feels like they are always in control (management portal, skipping a shipment, easy cancellation, etc…) They also constantly remind customers through their subscriptions that they’re always in control rather than hide those announcements.   

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Striking a Balance between Brick-and-Mortar and eCommerce

Magic Spoon, now available in over 7,000 brick-and-mortar stores and online, has had to adapt its retention strategy to manage this omnichannel presence. The brand uses its website to serve in-store buyers and uses the eCommerce channel as a tool for gaining customer insights, allowing the brand to expand more mindfully.

SMS: A Key Channel for Customer Feedback

SMS serves as a pseudo loyalty channel for Magic Spoon, used strategically to obtain customer feedback. They send 2-4 emails a week but only one text a week. They view SMS as a high-leverage channel and want each campaign to be unique and add value to their subscriber's life. 

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A successful example of their SMS strategy is when they ran an SMS poll in Q4 of 2022 that asked customers which holiday flavor they’d like to see. This campaign received over 7,000 responses within a few hours.

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This demonstrates that magic spoon values two-way engagement and connecting customers to their various retention channels in unique ways. 

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Career Advice for Aspiring Retention Marketers

Chandler advised those looking to forge a career in retention marketing to focus on understanding customers holistically and gaining data analysis skills. Knowledge of tools like Google Analytics, Excel, and SQL can enable marketers to speak more intelligently and use data to justify their strategies.

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Tools Chandler Can’t Live Without

• Klaviyo: Chandler's email service provider of choice — as with 99% of eCommerce ;)
• Rebuy: Powering their smart cart & swap to subscription encouragement which has been an unlock in subscription adoption.
• Retention.com:  Helping Magic Spoon to grow their email subscribers faster
• Malomo < order tracking and transactional updates

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This recap post only scratches the surface of the wealth of insights shared by Chandler.

For a deep dive into Magic Spoon's approach to customer retention, catch the full episode streaming now wherever you get your podcasts and on YouTube.

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