Subscription As A Performance Channel with Gina Perrelli

Our guest is Gina Perrelli, a retention marketing expert and the co-founder of Stay Ai, a subscription app for Shopify brands. Gina explains why she views subscriptions as a performance channel and how Stay’s platform can help DTC marketers optimize their programs. Gina discusses changing customer expectations and the potential for subscription models across various product categories, highlighting the importance of testing and customer feedback in refining retention strategies.

Episode Transcript

Adrian Tennant: Coming up in this episode of IN CLEAR FOCUS: 

Gina Perrelli: I personally think that retention starts the second somebody lands either on your website or walks into your store. Acquisitio, to me, is getting them there, and then retention is really everything you do once somebody has arrived.

Adrian Tennant: You’re listening to IN CLEAR FOCUS, fresh perspectives on marketing and advertising produced weekly by Bigeye, a strategy-led, full-service creative agency growing brands for clients globally. Hello, I’m your host, Adrian Tennant, Chief Strategy Officer. Thank you for joining us. Shopify is a widely used e-commerce platform that allows businesses to create online stores selling their products directly to customers. An extensive range of additional applications builds upon Shopify’s standard features. These apps cover marketing, inventory management, shipping, customer service, and plenty more, enabling brands to expand and customize their store’s functionality to meet specific business requirements. Today’s guest has deep experience in direct-to-consumer marketing and Shopify’s ecosystem. Gina Perrelli is the co-founder and CEO of Stay AI, where her work focuses on enhancing brands’ online presence and boosting revenues through advanced subscription models. Before Stay AI, Gina co-founded Lunar Solar Group, leveraging her experience in customer lifecycle optimization and CRM programs. She’s worked with leading brands, including Bolthouse Farms, Magic Spoon, Olipop, Pampers, Truff, Van Heusen, and Vita Coco, among many others. To discuss how Stay AI is turning subscription into a performance channel, I’m delighted that Gina is joining us today from New York City. Gina, welcome to IN CLEAR FOCUS!

Gina Perrelli: Hey, thanks so much for having me.

Adrian Tennant: Well, first things first: Gina, what led you to a career in marketing and e-commerce?

Gina Perrelli: Yeah, I mean, it, it was a little bit of an unconventional path here, but back when I was in college, I was fortunate enough to join Red Bull and work for Red Bull throughout my time in college. I started as a Red Bull girl, which I think the conception is like we run around with the little backpacks and we drive the little Mini Coopers and hand out Red Bull! But there was so much I was learning about marketing behind the scenes there. Like we had to plan – they call them missions – for two a week, every single week. And every month would have a different ideal customer profile (ICP). So it’d be like, “Okay, this month you’re going after men who are between the ages of 20 and 30,” and then they had all these consumption occasions broken down where they’d be like, “And we are looking for people in that ICP that are studying, and we want to make sure that we’re hitting that.” So you would plan around that. You’d be like, “Okay, we’re gonna go to a bunch of different college libraries. We’re gonna go to public libraries, whatever,” and you would plan these missions around them and the different consumption occasions, and the goal was always to find 10 percent new users, and then find people who maybe have only had a Red Bull when they’re partying, but then get them to have it when they’re studying. And that was, like, my first intro to marketing that I thought I was just kind of running around handing out Red Bulls, but I was learning quite a bit. 

Adrian Tennant: Today, you’re an established expert in the retention space. What’s your definition of retention marketing?

Gina Perrelli: I personally think that retention starts the second somebody lands either on your website or walks into your store. Acquisition, to me, is getting them there, and then retention is really everything you do once somebody has arrived. So, I think some brands would argue that retention starts after the first purchase. I truly think it’s once they get on the website. hitting somebody with a pop-up, hitting somebody with an abandoned cart, you know, email. Any touchpoint that happens after you’ve come to the website.

Adrian Tennant: Now, you also spent some time in the resort industry, which led, I believe, to you working with email marketing pretty intensively. 

Gina Perrelli: Yeah, so coming out of school, you know, I’d worked for Red Bull, and then I didn’t know exactly what I wanted to do next. Did I want to work in marketing? I was really drawn to events, so I started working at a ski resort, a Four Seasons resort in New Jersey, running their events. I did that for about a year. And then, they had gotten somebody new in to do their digital marketing and take over their email program. And I started to notice, like, emails just we’re not going out on time. Attendance for the events that I was running was slowing down. So I was like, “You know what? I went to school for industrial design. Like I can design emails. Like I’ll take over the email design.” And then they still weren’t getting built. And I was like, “I know my space. Like I know HTML. I can code these emails.” Then I started coding the emails, and then like the calendar would still be messed up. So I was like, “You know what? Like I’ll take over just this whole thing.” And before I knew it, I was running this. you know, the email calendar for this resort, which was super interesting because there were so many different business units. Like you had the ski resort, you had customers who were lift ticket people, season pass people, and people in lessons. You had all of the summer stuff, which was like golf, bike park, water park, and people who came for weddings and corporate events. So I was really diving into a lot of cross-selling and stuff like that from the start.

Adrian Tennant: The resort sounds pretty luxe. So did that also have an influence on your interest in retention?

Gina Perrelli: I mean, yeah. I think you were about 45 minutes, maybe an hour, outside of Manhattan. So you were getting people, and really the goal was to get them there for a few days. Like you didn’t want somebody to just like buy a lift ticket and that’s it. You wanted them to eat on property, you wanted them to Stay the night, you wanted them to come back, you wanted somebody who maybe did one day of snow tubing, you want them to come back if they’ve never skied before and do a ski lesson, you want them to come back in the summer and take a bike lesson or visit the water park or one of their resorts, so it was really about once you had, you know, acquired a customer, how do you make them a fan of the resort? Like, how do you really, like, cross-sell them and bump up their LTV over time and get them into all the different things that they could possibly do there?

Adrian Tennant: You know, our industry is peppered with acronyms – “LTV”?

Gina Perrelli: Yes, LifeTime Value. So, in this use case, think about somebody who comes to the resort, maybe they ski, maybe they’re a ski customer, and they ski twice a year there, so they buy two lift tickets.  So, you know, their lifetime value, let’s say it’s $100 a day. I think the tickets are actually more now, believe it or not. But if they come, you know, for four years, they come twice, like that’s kind of like their cap, that’s their like lifetime value, what they will spend with you over time. And so now if you can get them to not only ski twice a year, but then maybe come back in the summer and go to the water park, then they spend another $50 there, and then they eat on the property, and they spend another $200 there. And that really bumps up their lifetime value to the brand over time.

Adrian Tennant: As I mentioned in the intro, you’re the co-founder and CEO of Stay AI. Gina, what is Stay AI, and what problems does it aim to solve for brands?

Gina Perrelli: Yeah, Stay AI is a subscription marketing app for Shopify brands. So, the reason that we built Stay in the first place was I felt like subscription was kind of the piece of the retention stack that was broken. I felt it was just kind of bizarre that we saw so many brands be like, “Okay, these are our subscribers. Make sure you exclude them from newsletters because we don’t want them to be like reminded and unsubscribe.” And for me, as a retention marketer, I was like, “Wait a minute, these are your best cohort of people. They’re customers that come to your website, they give you their credit card, and they say, ‘Keep this on file and charge me every month because I want this product again and again.’ Why would we not try to cross them into other products? Why would we not, you know, treat them like a VIP status? Why would we not, you know, poll them when we’re thinking about new products that are coming out, make them feel involved in the process?” Where with Stay, I really wanted to focus on optimizing the subscription program. And what could you do to make it even better? Could you run A/B tests around, you know, getting churn down on order number two? Could you run price tests on cross-selling people from one product into another product? And that was really, you know, why we built Stay and the problem that we were trying to solve.

Adrian Tennant: How have customer expectations changed, would you say?

Gina Perrelli: Nobody five to 10 years ago was subscribing to paper towels or really to like any consumer packaged goods. Where now, I think it’s just so standard. Like it’s kind of crazy how many people do put a lot of things on subscriptions. And it really is it’s just more of a comfort thing. Like for me, I live in New York. When I go to the grocery store, the last thing I want to do is have to pick up paper towels. It’s huge, I don’t want to walk a bunch of blocks with it. Even if I was in the suburbs, carrying it around, you’ve got to put it in the cart, you’ve got to load it up, it just takes up so much space where If I know that I go through paper towels every two months to just put it on subscription, it’s just so much easier. They just show up, they’re there at my apartment. I don’t have to lug them around. And I think that rings true with a lot of these different things. Cereals, coffee, supplements. I think that people are just much more open to subscribing to those things instead of just buying them one-off. 

Adrian Tennant: Stay AI certainly has a very impressive list of consumer brands that are your clients or customers. What are you seeing in terms of the motivation for traditional brands that maybe we would previously have thought of only buying in a supermarket? What attracts them to Stay AI?

Gina Perrelli: So the brands themselves, I think when they are selling on e-com, like there’s something great about owning your customer and your customer data and knowing who those customers are. When you’re just selling to Whole Foods, for example, you don’t really connect that much with the customers. You don’t know much about their buying habits where when you’re selling on your direct-to-consumer, you’re selling on a Shopify store, you’re able to kind of understand those customers and see what they’re doing. And I think Stay takes that a step further where like with a subscriber, like to the point before now, you’re actually able to say, “Okay, if somebody subscribes to a variety pack, when do we push them to actually pick a particular flavor that they like? What’s the swap rate on that? What are the flavors that have the highest churn? And what are the flavors that have the lowest? What are the cancellation reasons?” Like people who want to get off subscription, is it because they actually didn’t like the product? Are they not feeling the results of the product? Or is it simply because they have too much or that they prefer to buy it in-store?” Where I think Stay gives you a lot of insights there to just more about the end customer.

Adrian Tennant: Well, I know you successfully raised Series A funding last year. Can you tell us a bit about Stay AI’s founding story?

Gina Perrelli: Yeah. So, prior to founding Stay, me and my co-founder, Pierson [Krass] founded an agency called Lunar Solar Group. So it started off, I knew how to do email marketing, and he knew how to do Facebook ads. So it really was like bootstrapped where we were just, I was designing the emails, I was doing the email strategy. It was like, you know, a two-man shop for a minute. Then finally, it was like five of us, and I think for a while I was like, “Oh man, maybe one day there’ll be 15 of us.” And in, you know, three years all of a sudden, I look up, and there’s 70 of us! So we scaled the agency up to about 70 full-time employees working with hundreds of brands. I learned so much more about retention and what’s important to brands and then through that I was able to identify, kind of where the holes were in the tech stack and where I saw areas for opportunity. And so we built this app called KnoCommerce and actually spun it out. It’s a post-purchase survey app. And around the same time that we were selling Kno, Shopify had made this big announcement that they were going to allow subscriptions to be run. They were opening up a subscription API. So, prior to that, you had to have a second cart on your site to process subscriptions, where now those will be able to run through Shopify, where I just saw this area of opportunity where I was like, “If the subscription app doesn’t need to be this transactional platform, it doesn’t need to focus so much on collecting revenue and compliance and all that, it should be a marketing tool. It should be like a, you know, Klaviyo for subscriptions, where you’re able to go in there and easily set up A/B tests and think about the customer touch points. And that’s really why we founded Stay and what gave us the expertise to kind of know what to build.

Adrian Tennant: Okay. Well, I’m curious about that process of raising funding. I mean, obviously, you got it! But what was that like as an experience?

Gina Perrelli: It wasn’t fun! I think there’s like … So, when we built Lunar, we never raised any funding. So I only saw funding like from an outside perspective. You would see these big announcements, “So-and-so just raised, you know, $15 million at a hundred million dollar valuation,” and I don’t think that ever really meant much to me. I think my idea of funding was, “Okay, whoever’s raised the most funding must be the best company.” Which is not how it works. But that was my naive, new to it. You know, when I would look up two competitive brands, I’d be like, “Oh, well, you know, this one has 17 million in funding and this one has a hundred. So, like the hundred million must be a much bigger company,” which just is not how this works. And I think the fundraising market has changed so much even in just the last two years where you were seeing tech companies get these crazy valuations. They were 50x multiples on the top line with no roadmap to profitability, getting crazy valuations and a ton of capital where that party is over – that ended pretty hard back in like, you know, 2022, 2023. Where now, the focus really is the companies that are getting funding have a clear roadmap to profitability. They don’t have crazy high burn rates. For us, I talked to over a hundred funds during our series A process. It was a grind. At the time, my co-founder really pushed me, we had to have this super polished data room. We had five different decks that broke down different parts of, you know, our product, our strategy, our marketing, like, everything in that data room. It was like 200 slides across these decks, and I thought it was so much overkill, and for a while I was like, “We’re just wasting so much time on all these materials.” And, I mean, at the end of the day, it just really gave us a leg up because we look so polished. So, any founders that are going out there to raise, I think if you are very early, then kind of simpler the better. You need to make sure that the deck shows what you’re doing. But if you’re a couple of years in and you’re trying to raise a Series A, your materials need to be polished. Your model has to be polished. And you need to be focused on profitability and burn rate more than anything.

Adrian Tennant: How does Stay AI differ from the subscription features already included in Shopify?

Gina Perrelli: I would say Stay really is for brands that are doing at least close to a million a year in subscription revenue, and that scales all the way up to with brands doing over $100 million, $150 million subscription revenue. So really, once you’re doing that volume of about a million a year, you know, $70k-$80k a month at least, then you’re able to get to a point where like testing really matters. Where we come in that, the Shopify subscription app and some of the other apps in the ecosystem don’t have anything like it is the ability to A/B test and really kind of see those results across everything from active customers looking to churn. So A/B testing your cancellation surveys, and we have machine learning that then piles on top of that with live learning models that are going over and finding the best treatments for certain customers based on their cancellation reasons. And then we have a lot of proactive treatments. So stuff around churn where you can A/B test, “What if we offer a free gift on order number two? How does that increase conversion to get people to the second purchase? For customers who are subscribed to product A, can we upsell them to product B?” And maybe we want to price-test that. So we want to test, you know, $5 upsell versus $7 upsell. And all of that is kind of what’s baked into our platform that you won’t get somewhere else.

Adrian Tennant: And at the core of Stay is something you call the Experience Engine. Could you explain what that is?

Gina Perrelli: Yes. the Experience Engine is always going to be my favorite part of Stay. It’s really why we built Stay. We had so many brands over the years prior to building Stay, when we were just working at Lunar, that would be like, “Hey, can we test or can we offer this free gift on order number two? Like we see so much churn in between one and two.” And you just couldn’t with the tools that existed. It was just impossible. You would add these free gifts, someone would cancel their subscription, the gift would still send out, you’re paying postage on this free thing it was a mess. There was no way to establish a baseline to see if it actually was helping. Where when we built Stay, I was like, “We have to have just a simple engine that somebody on the marketing team – you don’t need a developer – is able to go in there and in five minutes set up a test, with a control group and end the test and say, ‘Hey, what does offering a free gift on order number two actually do?’ and set that up.” And I think that was really like at the core of it. Now, Experience Engine does so much. With the AI component, we’re able to detect prior to somebody’s upcoming order notification going off if they’re flagged as a churn risk. You can treat them differently than somebody who’s not flagged as a churn risk. So offering gifts versus upsells, price-testing upsells, all kinds of stuff.

Adrian Tennant: Let’s take a short break. We’ll be right back after this message. 


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Adrian Tennant: Welcome back. I’m talking with Gina Perrelli, the co-founder and CEO of Stay AI, a next-generation subscription application for brands that use the Shopify platform. Well, we love case studies on IN CLEAR FOCUS. So, Gina, could you tell us about one or two brands that have been successful since moving to the Stay AI platform?

Gina Perrelli: Yeah, I mean, there are so many. There’s so many listed on our site. I think two that come to mind. I’ll do one that’s more focused around churn and then another one that’s focused on increasing average order value, AOV. So, we work with a company named Obvi. They do collagen protein supplements – stuff in that space. And they were seeing a really high churn inbetween order number one and order number two. So they were offering, I think, like 20 or 25 percent off subscription. Which just inherently comes with a lot of people coming to the site, seeing the price difference, buying the subscription, and then immediately canceling before the next order – like without even giving the product a shot. They just don’t want to be on subscription and really just came in for the discount. So, what we did there was we teased as soon as customers subscribed, they got a notification that they were getting a free gift on their upcoming order. And I mean, for them, the results were just incredible. We saw an 80 percent lift in customers who made it to the second order if they were offered a free gift

Adrian Tennant: Wow, that is significant.

Gina Perrelli: It was very significant, and like, when you’re turning on subscription, you’re offering discount margins, all of that, like there’s just a lot of brands who are subscription-focused that they do take a full loss on the first order. So they’re banking on enough customers getting to the second order. So one item like a free gift and getting people across the line to that second order is a game changer for brands. So, the second case study that I think is really important is with a brand called Olipop, which is a functional soda company. They switched over from another platform and so they do a lot of limited-time flavor releases. So, they’ll have their core staple flavors that are available on subscription all the time, and then they’ll do a seasonal flavor. So, in the Fall one year, it was like an apple-flavored soda. And what they were struggling with was subscribers always wanted to try these new flavors, but the only way to do it was to go to the website because it was a limited-time product, so it wasn’t available on subscription. So they would go to the website, they would buy the limited time product, then they would pause the subscription or cancel the subscription, forget to reactivate it because they got this other case. Where with us, we really focus on being able to cross-sell and offer discounts on one-time purchases, like within the subscription. So they were able to send an email to all their subscribers and say, “Hey, add this limited-time flavor to your upcoming order. You’ll even get a discount on it as a subscriber perk.” And within two clicks, they’re able to add those. So, it actually increased, they do so many of these, limited-time flavors, within two, two, three months, their subscription revenue went up over 35 precent. And they’ve been able to maintain that and keep that growing by offering these cross-sells and, like, these one-time products for subscribers.

Adrian Tennant: That’s great. On Stay’s website, you list some consumer product categories that Stay serves, including food and beverage, as we’ve just discussed, beauty and personal care, health and wellness, pet, and home. Gina, I’m curious: Are any consumer categories especially challenging or just plain unsuited to a subscription model?

Gina Perrelli: Yes. I would say mattresses would be pretty tough to be on subscription, because you don’t buy them that often. There are some other things that just have really unreliable usage cadences. I’ve seen some people be like, “Oh, like makeup – I don’t know how much I’m going to run through my foundation. Like I only buy it once every six months. I want to try a new one. My color changes,” Like that kind of stuff might not make sense. I think for every brand, they really need to like look at it. I think something interesting that’s come up recently with a makeup company was mascara. Like just for, if you’re very prone to getting styes or anything like that, like you should swap out your mascara every three months. And I think there are a lot of products like that – that they expire or once you’ve opened them, you should swap them out even if they’re not done, just for health and bacteria reasons. Where I love stuff like that on subscription because it’s like a reminder to the customer of like, “Hey, even though you might not be done with this, it’s probably time to throw it out and get a new one.” So, I would like to see more brands kind of lean into that element of subscription and like the health reasons of why you should be swapping out the products.

Adrian Tennant: Now, I think some people have tried with clothing, but with mixed results, right?

Gina Perrelli: Yeah. Clothing is another one where you see some companies that are crushing it. Like these underwear subscription companies, the MeUndies of the world, where people like love it. They get the monthly, you know, colorway or style or whatever it is. And then there are other brands you know, if you’re a female fashion brand, like I don’t want to just subscribe to like pair of leggings. I need there to be something different. I don’t just need like a new pair of black leggings every month. So, there has to be something about them, but I’ve seen some people get pretty creative with the build-a-box function where maybe you want three t-shirts every month or every two months and then you can go in and kind of swap. So maybe you start with one white, one gray, and one black plain t-shirt, but then you’re able to go in and see all the different options there. “Alright, well, I don’t need any more white t-shirts this month. I’m actually going to switch or like, I need a long sleeve that’s white,” or “I want a V-neck,” or “I want this.” And so being able to switch between those things, I think is interesting and kind of opening up some options for fashion brands.

Adrian Tennant: What advice would you give to businesses or brands exploring a subscription model for the very first time?

Gina Perrelli: I would suggest – start simple if you can. I think we get a lot of some times new-to-subscription brands that are just really like, they’re very excited about it and they want to do these very, very, very custom things. If you are not sure if a subscription is going to work for your business, just turn it on. Like, at first, like, find something that makes sense: 10, 15 percent discount, like a standard subscription. Don’t overdo it. What I would hate to see is somebody like just kind of has this vision. They think this one thing is going to work, and then investing a ton of time and resources into it and then realizing that like they have to redo the landing pages and all that. So I would say start simple. And then once you’ve built some traction, go from there.

Adrian Tennant: What kinds of questions should brands be asking themselves?

Gina Perrelli: So, if you don’t offer a subscription right now, you should probably be asking, “How often does somebody consume this product and then need a new one?” So, if we’re talking about cereal it might be a little bit harder because does somebody have cereal every day? Does somebody have cereal three times a week? And like really think about the consumption of that. Also, how many people are in the household? So there are certain things there where it makes it hard, but I think that picking the right cadence and the right cadence options is important, because one of the number one cancelation reasons that people stop subscribing is because they have too much. I think brands are always like defaulting to 30 days or at once a month is the right cadence. But really think about what is your product? How often do people consume it? And like default to the right cadences that makes sense.

Adrian Tennant: And again, if you’re just starting out with subscriptions, is Shopify’s built-in solution a good starting point?

Gina Perrelli: I think so. Turn it on. If you reach limitations and you’re trying to do too much, like really think about the cost. Stay starts at $500 a month, plus a transactional fee. So if you’re really not sure if a subscription’s gonna work and you just wanna get started, like just use the Shopify app, and get started that way. And then once you’ve built up a program, it, then you can migrate off and use something a little bit more heavy

Adrian Tennant: At the other end of the scale, what about brands seeking to expand their existing subscription models? Do you have any advice for them?

Gina Perrelli: Test! Test things. I mean, we test so much for acquisition. We test so much on email and all these other places. I think that I’ve talked to so many companies that are just like, once somebody’s subscribed, they’re subscribed, and they just pray they don’t cancel, where really there’s so much that you can test on the cross-sells, on the churn reduction, all of that. Please get in there and optimize, pay attention, give it two hours a week of your time, your subscription program, it’ll be worth it.

Adrian Tennant: Hmm. What about research? 

Gina Perrelli: Yeah, I mean, cancelation surveys like, everyone should have one turned on. So at least you know if people are canceling, like, why. Customers will ask questions. I think that getting responses back every time you answer a ticket, putting, like, when you go to close out a ticket that somebody’s a subscriber, asking them what they think about your subscription program, putting some type of survey in there is also really, really helpful. If you have the ability to do it, or if you are coming out with new products, customers love to be involved in that process. Even if you’re 99 percent sure you want to go with this flavor or this thing, sending them a poll where they feel involved, like, really does build community. So, I always advise that as well. 

Adrian Tennant: Well, your LinkedIn profile description for Stay AI is “turning subscription into a performance channel.” So, Gina, in what kinds of ways does Stay AI support commerce brands in their efforts to maximize their growth and retention rates?

Gina Perrelli: Yeah, we talked about it a bit, like with the experience engine and things you’re able to test there also with retention engine, but I think that’s really where we’re able to test things, and saying, “If somebody is subscribed to product A, can we price-test, getting them to buy product B?” That’s like the type of like logic and where the retention marketing and the whole performance channel concept kicks in is the ability to go in there and test and optimize.

Adrian Tennant: You recently posted a comment that running an A/B test only makes sense if you’re able to analyze the results. So, how does Stay’s Experience Engine support experiments?

Gina Perrelli: So, I had seen a couple of other apps like Push, like, “Oh, well, like, we have the ability to A/N test too,” and then they’re reporting on one KPI at the end of the day. Where I’m like, “But that’s not…” you know, if you’re A/B testing for churn reduction versus price or cross-sell, like, there are so many different KPIs that you have to factor in to see if the test is doing what you want it to do. So we report on over 20 different KPIs when you’re running a test with Experience Engine. So we’re looking at everything from, did they make it to the next order? What was the AOV of the order that went through? What is the lifetime value of that cohort over time? If you’ve been running something for months and you want to know, “Hey, we offered a free gift. This got many more people to order number two. But did they cancel right after that? Like, how did this group perform?” You’re able to look at all of those different metrics. “What was their AOV? What was their LTV? How many of them paused after getting this offer? How many of them canceled after getting this offer? How many of them stayed active?” All of those different things matter.

Adrian Tennant: Are there upcoming features or innovations that Stay AI is planning to introduce that you’re allowed to talk about?

Gina Perrelli: Yes, as the innovation leaders in the space, I think we were the first to market with any type of surprise and delight thing, the first to market with any type of cross-sell/up-sell. We ended up acquiring a company called Retention Engine, which does our cancelation surveys, which kind of really bought the live learning models and ML into the space. So I am sometimes a little tight-lipped. about what’s coming up next and what we’re working on, but I can share loosely we have two directions that we’re very passionate about here at Stay. And one is this whole concept of no-point loyalty, the surprise and delight of earning things as you become a subscriber. We won’t be touching anything with direct points because I think that is just, if you’re gonna go down that path, you probably want it for subscription and non-subscription. Where with us, It’s going to almost be like a V2, like the next stage of Experience Engine, is what I can say. So, I’m pretty excited that it really will show the customer the journey that they’re on and tease carrots out more than just like one order in advance. So that’s coming in Q2. And then we are also very focused on something that I call it like It’s not as sexy, it’s not like this big marquee, flashy feature! But what it is is like just around failed payments and dunning and like really just putting focus there on like, “How can we service that better?” I think it was eye-opening to me that, across our brands, anywhere from 12 to 30 percent of queued-up orders fail due to a variety of different reasons. And some of them are hard declines and some of them are soft declines, and like, we’ve just been doing a lot of research there on like, how can we do a better job, with that, so that’s something else that we’re pretty excited about.

Adrian Tennant: So, for example, a consumer inputs a credit card, the expiration date is not that far away, and for whatever reason, it does treat it as a failure.

Gina Perrelli: Yes. And expiration date is an example of a hard fail. We see almost 70 percent of the fails are soft fails, which means that, like, the credit card just got declined that day, which could be the bank, it could be whatever. Maybe they bought a bunch of stuff that day, and it flagged as fraud for some reason, even though they’ve been a subscriber for six months, and it’s never flagged before. Or insufficient funds because somebody has it in a debit account and they get paid on Friday, and it ran on a Thursday. There are all these different types of declines, and, like, really focusing on the error codes and the error messages is something that we’re very interested in.

Adrian Tennant: Gina, what future trends do you anticipate in the consumer subscription space?

Gina Perrelli: I think that customers are going to continue to be interested in like brand loyalty, like what they get out of being a subscriber. There are so many brands out there now that if the only perk to subscribe is because they save 10%, they will find your product for $2 cheaper elsewhere. Someone else will be selling it. There’ll be some new company where, you know, the differences just don’t seem that real, and they’ll find it. Where I think that the focus on loyalty and like really keeping customers to a specific brand is important, I think a trend that we’re going to see brands start to play on, and consumers really follow where they consolidate the brands that they buy from and they want to buy more from specific brands. 

Adrian Tennant: Gina, if IN CLEAR FOCUS listeners would like to learn more about Stay AI or connect with you, what’s the best way to do so?

Gina Perrelli: To learn more about Stay, the best thing to do is to fill out a form on our site or subscribe to our newsletter. And then, anything about me, I am on Twitter and LinkedIn almost daily – so I post quite a bit there. So feel free to connect with me on both of those platforms.

Adrian Tennant: Gina, thank you very much indeed for being our guest today on IN CLEAR FOCUS!

Gina Perrelli: Thank you. Thank you for having me. This was fun. 

Adrian Tennant: Thanks to my guest this week, Gina Perrelli, the co-founder and CEO of Stay AI. You’ll find a complete transcript of our conversation with links to the resources we discussed on the IN CLEAR FOCUS page at – just select ‘Insights’ from the menu. Thank you for listening to IN CLEAR FOCUS, produced by Bigeye. I’ve been your host, Adrian Tennant. Until next week, goodbye.

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