SalesTechStar Interview with Todd Donahue, CFO at Ordergroove

Todd Donahue, CFO at Ordergroove chats about the future of subscription based commerce models and how AI will become a key technology in driving business outcomes:

________

Welcome to this SalesTechStar chat Todd, tell us about yourself and more about your new role at Ordergroove, what’s most exciting about this?

I joined Ordergroove late last year as the company’s CFO. What excites me most about Ordergroove is the company’s history of impressive growth and the value we deliver for our marquee customer brands. Ordergroove’s powerful Relationship Commerce platform greatly enhances eCommerce experiences and deepens first-party customer relationships, leading to higher recurring revenue, increased customer lifetime value and lower churn for merchants.

Prior to joining Ordergroove, I led strategy and operations for Mastercard’s merchant loyalty businesses. I joined Mastercard through its acquisition of SessionM, an enterprise marketing SaaS provider. As SessionM’s CFO, I led the company through rapid growth, global expansion, several rounds of funding and ultimately its sale and integration with Mastercard.

I am excited to partner with our team to help Ordergroove achieve its mission of placing relationships at the center of commerce and to showcase that Ordergroove is the top solution in the Relationship Commerce category.

Read More: SalesTechStar Interview with Aaron Seyler, Senior Vice President of Sales at TeleSign

How are you seeing growth trends impact the eCommerce subscription industry and what are a few near-future predictions you’d like to take us through?

Consumer demand for increased convenience and enhanced personal buying experiences have increased dramatically in the last several years. As a result, we’ve seen a rapid expansion of merchants launching subscription experiences. The trend became even more pronounced in 2020 when consumers were homebound as a result of the pandemic and eager to find ways to get their favorite products delivered directly to their doorsteps. In 2021, demand for subscriptions continued to increase. We attribute this to consumers seeing the value and benefits of subscriptions – cost savings, increased convenience, anticipating needs, to name a few – and opting to keep these services instead of heading to physical retail stores.

My prediction for the future of subscription commerce is that artificial intelligence (AI) will become widely adopted. AI enables merchants to analyze large amounts of subscriber data to improve their subscription outcomes. As one example, Ordergroove’s subscription solution uses AI to determine when a subscriber is at risk of canceling because of overstock. Merchants can then proactively reach out to the subscriber to pause their order. This prevents the subscriber from churning and increases customer lifetime value.

Content is also going to play a greater role in successful subscription experiences. More merchants are going to offer subscribers exclusive content to create strong personal connections and brand community. This content might be videos or blogs written by influencers or brand advocates. It might also include access to exclusive online communities.

How can merchants and online sellers today build better experiences to drive better subscription-based experiences? A few takeaways from how leaders around the world have got this going well…?

A successful subscription experience can be divided into two complimentary facets — subscriber enrollment and subscriber retention. Both are critical to subscription growth and should be as frictionless as possible.

Merchants can optimize their subscriber enrollment experience by making it effortless to sign up. At Ordergroove, we achieve this by offering multiple website sign-up locations and delivery frequency recommendations. Special promotions and free delivery can further incentivize subscription enrollment, but are quickly becoming table stakes. Additionally, merchants must offer an integrated checkout experience to subscribers instead of taking them to a separate page mid-checkout to complete the payment of their subscriptions. This sounds obvious, but some subscription providers don’t offer this, and it can really hurt the subscriber experience and degrade subscriber enrollment conversion.

Merchants can optimize their subscriber experience to maximize retention by focusing on convenience and positive brand moments. It should be easy for subscribers to control their recurring orders, including skipping or canceling. As for positive brand moments, merchants should surprise and delight their subscribers whenever possible. This can be accomplished by offering an unexpected gift with a purchase or rewarding subscribers with an additional discount on the anniversary of when they signed up for their repeat order. A positive brand moment doesn’t have to involve a product – merchants can offer personal experiences, as well.

What are a few ways in which you feel subscription-based businesses will have to redefine core processes to stay above the noise in today’s crowded market?

Brands that want to differentiate themselves can focus on creating trust and transparency with subscribers by giving them more control over their subscriptions. If merchants make it difficult for customers to unsubscribe, it can ruin a subscription experience and ultimately erode a brand’s credibility. For example, reaching out when data shows that a subscriber might be overstocked to help them skip their next order builds trust and increases subscriber retention and lifetime value.

A few thoughts on how you feel the overall eCommerce market will move in the next few years?

As it exists today, eCommerce centers on discrete one-time purchase transactions. This creates friction for both consumers and merchants alike. Consumers are busy and don’t have time to shop for the products they want or to experience new products. When they do have time, shopping online can be tedious or clunky. On the merchant side, the eCommerce market’s growth has led to increased competition. The competitive market makes it difficult to stand out and gain customer loyalty, driving up customer acquisition costs that outpace customer lifetime value and hurting the profitability of many merchants’ businesses.

The convergence of these consumer and merchant pains provides an opportunity for eCommerce brands to model their business to support ongoing relationships instead of optimizing for one-time purchases. Relationships are created when a connection is built between merchants and consumers that results in frequent, repeat purchases and high customer loyalty. Merchants can create relationships by delivering personalized, frictionless shopping experiences that require minimal action by the consumer to receive the products that they want, when they want them.

Subscriptions deliver this frictionless shopping experience as products automatically arrive on a consumer’s doorstep when they want them, without having to take any action. Given this demand for frictionless experiences that build relationships, we fully expect the subscription market to grow in the coming years. We also expect to see growth and innovation of on-demand reorder shopping experiences. On-demand reorder experiences allow consumers to receive proactive communication from brands asking if they want to restock on a product for which they’re running low. A consumer simply answers yes, and the product arrives right when they want it. Alternatively, a consumer might use text or voice devices to restock a product on their own. In this instance, shopping becomes even more frictionless and goes from a multi-click checkout to a zero-click checkout.

Some last thoughts, takeaways, digital sales tips and best practices before we wrap up!

We think the future of eCommerce will be based on merchants building strong personal and enduring relationships with their customers. We refer to this as Relationship Commerce. The goal of Relationship Commerce is for merchants to move from one-and-done transactions to ongoing, frictionless relationships, resulting in predictable recurring revenue and higher customer lifetime value. A personalized subscription experience is one of the fundamental building blocks of this concept.

Read More: SalesTechStar Interview with David C Williams, Assistant Vice President for Automation at AT&T