Being a Good Business Partner James Hotson, Head of Partnerships, ReSci

Welcome. Take it up with Jessica Lee. I'm here with James Hodson, who is head of partnership at reside. That's Retention Science. Hi, James. Welcome to the show.

Hi, Jessica. Thank you for having me.

I am interested to learn how you're helping the retailers right now because, you know, it's a tough time. Everybody's going online to shop, a very competitive situation. And technology can make a huge difference as far as attention of clients. So tell us, what are some of the trends you're seeing, how you're helping clients?

Well, it's been an interesting four months, especially for a lot of these mom and pop businesses. It's now mandatory for them to get online. And so before this, they could kind of get away with people coming into the retail store. And now that's not an option. So they're quickly having to navigate and figure out, how do I get in line, what are the fundamentals, how do I set everything up, what's the foundation? And we're helping a lot of these businesses kind of get from zero to launch pretty quickly, which has been fun.

Let's dive into this because I know retention technology is so important, but your strategy to getting the word out and attracting clients is really through the partnership strategy. And part partners are so important. Right. So talk to us about your strategy of who do you pick? Why do you pick them? What your vision of the strategy here.

Sure. Well, as head of partnerships, it really means I build out a lot of our agency partnerships, and my primary focus is really ensuring that we partner with the right marketing agencies that reflect the needs of our merchants. And so as I was actually one of the first hires here at Retention Science back in 2013. And so really we were in the early days, we were doing a little bit of sales outbound, trying to bring in new business and manage those accounts. And so that firsthand experience has now translated in how we can build a great partner program. And my strategies are really around how do we turn these marketing agencies into just referral sources for our clients? And how do we make sure we partner with the right agencies that that kind of complete the whole product for our offering?

I think that's very smart because the agencies tend to do a lot of the digital marketing for the retailers already. Right. They're in front of the consumers, trying to do that acquisition on behalf of the clients, the retailers. And so they already have the relationship and now they're in the position to recommend, hey, we already acquired the consumers. What about retaining those consumers and growing that lifetime value?

Right. I think what we Noticed is the buying decision for a lot of these merchants actually starts with the marketing agency. And so it can be a tremendous channel and drive a lot of revenue. If we start to build good relationships with these agencies, you know, help make them experts in our technology and the way we help brands. But for the agency side, we're kind of supporting that ecosystem and helping them do their core competency a lot better because we're helping them make more money with new offerings, new products. We're helping them do it a lot faster, a lot easier, and then we're helping them save time because they're not using some of the antiquated old tools that some of the merchants were on before.

I can see the agencies themselves then offering like a managed service where they're using your technology to, to deliver value and outcomes for the retailers. And the retailers don't have to know what technology is being used underneath as long as they get their results right.

Right. As the primary software being artificial intelligence, machine learning, marketing automation, that's some really heavy duty software. And it works great if you have some nice content to go along with it. So you need the beautiful design and beautiful content. So naturally partnering with a branding or a design agency really helps them create that exact package you just mentioned. Or another strategic one that we've really looked into is if a developer at the merchant level, if the merchant loses a developer, we can actually plug in a web dev agency pretty quickly and say, hey, here's one we've worked with hundreds of times. They do a fantastic job. My job is to really kind of know what the customer, the merchant needs the before they need it and then just have those solutions ready for them.

Okay, that's very smart. So right now what do you have like 50 partners?

We do have a partner program of about 50 that are our go to partners. I'm sure there's a long list of other ones that we're associated with in some capacity. But we've tried to be very strategic, keep very focused and also not letting you know any of our existing clients kind of fall into decision fatigue if we were to list 500 partners on the website. So we want the best of the best for ourselves right now.

Yes, I see what you're saying. It makes sense. Even 50, that's a lot already if you have to think about who go after help with agency content or marketing acquisition strategy. Okay, so 50, how do you make sure that they are thinking of you and not other technology players? Because I'm sure they have a lot of different other vendors they work with.

Sure. I think it comes around with building a lot of the right systems in place. You know, like you mentioned, building a relationship with the head of partnerships at the agency or making sure that if they are selling a deal themselves, how can we help? How can we be supportive of them? So building out things like a partner directory for our team to send them leads becomes really important. You know, maintaining the relationship with, you know, co marketing, case studies, events, any way we can support them. I'm always available if they need help, which I would try to do pretty nicely.

Yeah. And we're no longer having any kind of conferences or events, you know, which used to be a very easy way to gather partners and motivate them and build rapport and all that. So now you have to do everything online.

Yes, we do. So I spend a lot of my day on Zoom making sure that they are doing well. We're in the process of building out a slack channels for our partners and then with the ones that are very close, you know, I'm texting with them most days to make sure that everything's going well.

What's been the hardest part of your partnership? Build out?

I think early days it was a worry that it would be a distraction that the partner program would be a distraction for not only the sales org but also the rest of the company. Because it does take a lot of love and energy to maintain and nurture a partner program. And so really concentrating our focus on partners where we could expand our revenue, expand our market presence and equally deliver value to them, I think that was hard to find. And then once we got on the rhythm of that, there was a lot of easier buy in internally from client success and support. And then we just had to build out the repeatable processes for those divisions to kind of internally support the partner program and externally support it.

Okay, well there's a lot of tips and lessons learned here that you can share with people who are trying to have a partnership as their go to market strategy. What tips would you give that during this Covid time where we're all working remotely, sheltering in place and a lot of retailers are struggling, frankly, the stores are shut down. So they're shifting a lot of their investment to online technology.

Sure. I think you have to think from their perspective. You know, if someone's gonna give you a dollar in an hour of their time for your service or your offering, how are you gonna support them and give that back to them? So I think we always tried to attract people who were in our same boat as you know, disruptive kind of cutting edge technology. We needed people in our corner who kind of agreed with us at first. Also people that shared our mindset. We needed the agencies that were ambitious. We needed the agencies that had something to prove. And so we kind of repeated what worked from an outbound sales strategy. Early on, we didn't work with the really small ones, we didn't work with the really big ones. We looked for those middle market companies that had something to prove that could be a little bit adaptable and flexible. And so I think for anyone listening to this, look at someone that aligns with your core competencies and how can they be complementary and how can you grow together equally?

And is the incentive an ongoing share of revenue as the license continues? How do you motivate them? Like the structure of the incentives?

That's maybe the most surprising. I always thought the rev share would be interesting, but I think for a lot of the partners, you have to look at their why is it market access? Is it customer access? Is it to complete their offering? Is it expanding their source of revenue? Is it just combining forces? And so I would say the rev share is there, but it's not the top one. I think every company wants more leads, more shared clients, and I think it depends. If we're talking only marketing agencies, that's a lot of additional revenue and logos for them. And so I think that's the most important for them. If you're talking a technology, a channel partner, I think it's more exposure ways they can actually use the solution. To be more of a complete solution is really exciting to them. I think it varies a little bit, partner by partner. And so when you're managing 150 or 200, you gotta keep very well organized.

I see what you're saying. So the incentives kind of vary on the motivation of your partners then, right? Well, that means that you have a category called technology partners, which is kind of like you're leveraging each other's capabilities to deliver a set of tools.

Exactly right.

As opposed to marketing professional services that's taking advantage of your tool to deliver an outcome for their clients.

Exactly. We have those two channels are our top two. Right.

Okay, James, so let's hear about a use case. You know, let's say one of the marketing agencies brought you into a client and now they're leveraging your technology on the retention side. So give us specific details of how it's being used and the value it gets.

Yeah. You know, I think the interesting thing about using automation software is that you can test a lot quicker and more efficiently. And so a lot of the companies, especially with how quickly things have changed over the last few months, are just testing, messaging, testing content like crazy. And so we've had brands really try out and be a little bit more aggressive with their messaging or their content, and they're starting to find the real value or what customers really think of their product versus what the brand thought or what the brand dictated before. And so like a shoe company that always thought it was stylish, tested messaging around comfort and saw the performance just bumped. And so now they realize that their shoes are really comfortable to everybody buying them. And so testing has been huge. And I like to think that our ab bandits that kind of do that automatically for them, allow marketers, marketing agencies, and the merchants we work with to just try out content and see what works so that they can always effectively engage their customers.

Yeah, but testing has been around for a long time. You know, we always remember the old days of testing just the email subject line and that matters. Right, the ab testing. But what you're talking about is even a more modern way, which is a lot of automated leveraging data and iterating constantly really to drive higher retention.

Right, right. I mean, if we could take a look at it kind of there's diminishing returns as you test. Right. And just humans are limited, but a machine can do it much better. And so if we can get closer to that one to one messaging, your example with subject lines. Maybe a marketer 10 years ago was trying out five subject lines, now they could throw 25 in. And if there's a poor performing one, an A B testing bandit will automatically start sending fewer of that subject line. And so it gives them that free space to kind of create without, you know, the worry of is this a low performer? And with a bandit you're getting those results in real time time. So you're not waiting two weeks for that test to go and then killing the low performer. You're getting that feedback instantly. And so you're getting to know your customers better. You're building a better business quicker.

Does that mean that the retailer has to have a certain size of data, you know, to make it really?

We work with all size brands today because of what, how many new businesses have really put 100% of their focus online? We're launching new businesses daily. Most of our brands have a larger size database and that helps to get results faster. But I would say if you have, if you're capturing any sort of customer data, it's worthwhile to take a look at it and to test and to try things.

Okay. All right, good. So I'm sure that a lot of people will be interested in seeing how they can automate the testing and improve their results. Automation is good, right? We want automation. Frees up the time to do more creative work.

Exactly. That's been my biggest love. Before retention Science, I was working at a footwear e commerce company and it just took so much time to just get the foundation for life cycles that you couldn't even test. And so now we're helping shrink that window by pre building a lot of it. So everybody needs it, everybody wants it today, which is kind of great.

Okay, well, thank you so much, James, for being on the show to talk with us about technology helping retailers to retain clients.

I appreciate it, Jessica. Thank you for having me on.

There you have it. Take it up with Jessica Lee. James Hodson from resci, which is Retention science. Thank you.