Speaker 1 But welcome to the Making Sense of MarTech podcast, where we interview leaders and put them in the hot seat. I'm Jaclyn Friedman, founder of Monarch and Global have advisory for the MarTech Weekly. Let's dove in and meet Adrian Rau, the VP of Marketing CRM at Fabletics. A little about him. He leads the brand's omnichannel engagement strategy, originally from Germany and now based in Los Angeles.
Speaker 1 He has over a decade of experience in entrepreneurship, consulting and business strategy for DTC and retail companies. As Fabletics, he's driven the shift from manual CRM to an AI powered orchestration using automation and personalization to boost customer relationships and business results. One. Thank you so much for being here. I'm excited to dove in and also I'm really excited for folks to learn from your expertize.
Speaker 2 Thank you for having me. You should write my resume. So that sounds amazing.
Speaker 1 You've done some pretty cool stuff.
Speaker 2 When you have fun, you know?
Speaker 1 Oh, yeah. I'm really excited to dove in because your story in your team is very unique in that you have really built a marketing engine in-house where you are fully capable of executing without any outside resources, which is a rarity, especially for a brand at the scale and size of fabletics.
Speaker 2 I realized that when I came from Germany to the U.S., I was in consulting previously and worked for a lot of the big brands, the big names. None of them had that unique set up, like probiotics or tech. So I started back at that time and it was really surprising. And until today, it's very surprising to me. What incredible advantages it gives you when you have truly everything in-house from start to finish.
Speaker 2 So I'm very excited to share a little bit more about that with you today.
Speaker 1 Me, too. All right. To start us off, we've got a couple quick questions. Rapidfire. What was the first marketing tool you ever used?
Speaker 2 You're going to laugh at me. Was Microsoft front page in school? I had to build two websites with phrases like awful. When I think back to that quick spoiler, like if you build emails today, it's still in frickin HTML tables that we did 1520 years ago.
Speaker 1 It's still like the late nineties, early 2000s. An email. Yeah.
Speaker 2 Awful, right, isn't it?
Speaker 1 It's nostalgic. We'll say that.
Speaker 2 I love that word.
Speaker 1 All right. Now shifting gears, what's one marketing tool you cannot live without?
Speaker 2 For Fabletics, it's certainly Tableau because we're incredibly title driven. And in today's time, I think no one can get around such a beauty. And for us, it's Claude as well. So I think those are the three tools that I use every single day.
Speaker 1 That's awesome. All right. Getting a little bit into the nitty gritty, peeking behind the curtain. What is how about tech stack?
Speaker 2 Great question. I'm just going to hit the surface because we're going to go a little bit deeper later on. But so over the last ten years, textile built its own proprietary tech stack that powers everything from supply chain to e-comm to customer service. Everything was built in-house. And really, power is the core of what we do. And then in addition to our own proprietary text tech, we use industry standard like tools like snowflake segments and iterable for CRM.
Speaker 1 Awesome. So speaking of email and different channels, if you had to choose a favorite channel, mobile email or push, which one is it and why?
Speaker 2 A good question. I think opt for mobile number one, because it's always with the customer, you know, part of the moment, not just our inbox. And you can be more creative than push, but a little bit more limited than email. But yeah, I think it's mobile for me.
Speaker 1 Yeah. I have a feeling. Asks for your team's future is going to be vitally important.
Speaker 2 Yeah, I think many providers are looking into adopting Arceus, seeing how it works, what it means for their customers, trying to develop a product out of it. I haven't seen the product just yet. That works for everyone. Exciting. What's what's coming in the future? For sure.
Speaker 1 Yeah, for sure. All right. Speaking of features in the future, what's one feature you wish existed?
Speaker 2 It's creating true one on one messaging at scale. And that scale means for us hundreds of millions which exists but not exists yet. So I'm very excited about that.
Speaker 1 Yeah, it's definitely on the way. Everyone is trying. It's going to be interesting to see who wins the race. All right. And last but not least, something we ask everyone who is someone you admire professionally or personally?
Speaker 2 Area of the question appearance.
Speaker 1 Well, that's lovely.
Speaker 2 I think my dad gave me that answer when the spirit that I have today, my mom raised three children. So that's a very easy question to answer.
Speaker 1 You know, it's amazing. Let's set the stage a bit and learn a bit more about Fabletics and as well as the greater textile fashion group. So I this is a part of a brand portfolio which also includes Savage by Fenty, my girl Riri and Just Fab. And the textile fashion group calls itself Silicon Valley Meets Fashion Avenue. How does this show up in your marketing strategy?
Speaker 2 Great question. So textile used to be the holding company. Today, all brands are independent and we still have that layer across all brands which powers the back end. When you say Silicon Valley meets Fashion Avenue, that means to, I think, two things for us. Number one, why Silicon Valley? Because we are not just a fashion brand. We also got Apple partner, Texas Tech.
Speaker 2 That's what I mentioned earlier. And we built that tech stack simply for the reason that when the company was founded, there was no e-commerce for that powered membership. The way how we do it. And then the second component to it is membership. All of our brands are membership based, which gives us incredible competitive moats. We identify all of our members, which are our customers, and prospects know what they shop, not the sizes are names like, you know, everything that you could wish for from a data perspective, which in our marketing allows us to be hyper targeted.
Speaker 2 And just in the CRM set itself, we can use over two and 50 data points on a daily basis to customize our messages, whether we make use of those or not. That's a different story, but they are to our disposal.
Speaker 1 Yet it's like a gold mine.
Speaker 2 I mean, it truly is. But you know, those 250 data points over two and 50 data points, it sounds like a lot. But I also want to be honest, it's not something that we use on a daily basis. Right. You probably get down to 15, 20 data points that are highly relevant for your marketing every single day. And then whenever you tap into more specialized segments around promotion, product, preferences, location, whatever it is, that's when those additional data points come in handy.
Speaker 2 It sounds a lot. It's a nice number to say, but in all fairness, it's probably like 20 plus minus data points that we use every single day. Now, what it all means together, that Silicon Valley approach where we have our own tech, the membership model means it gives us an incredible data and performance driven approach to everything that we do as a company, which is definitely like an advantage if you think about over traditional retailer who sometimes is like has a hard time of identifying their customers.
Speaker 2 We are not at that problem, which just is great and I love working in that environment every single day.
Speaker 1 Yeah, it's such a rarity and I'm really intrigued by just how it came together. I think every company strives to be data driven to the point where they have ten or 15 data points that are highly personalized to an individual to be that customized and personalized. And so I'm curious how you helped get to this point. How did you evolve from a fragmented CRM system to this AI driven, centralized approach?
Speaker 1 What was the turning point that kicked off this transformation? And really, I think everyone just needs to know how to do this. It is the goal and you guys have actually achieved it.
Speaker 2 We have achieved it. But I also want to be fair, there's still a vision ahead of us where we want to have to. So in 2023, we had two separate tools for email and push and another tool for text messaging, and both tools that were incredibly strong and allowed us really to scale from zero to a very significant contribution to the business rate approach.
Speaker 2 It was easy to get into it. It allowed us a quick implementation. All done right. At some point we realized so that we are limited in in how much we can scale. Why? Because teams were occupied with manually downloading a segment from one tool uploading into the other tool. You always followed around trying to find workarounds how to, you know, satisfy certain business needs during these were not really connected because those tools talked with each other, but not really with each other.
Speaker 2 I think things that all marketers can relate to when you have two separate tools. The good thing for us, we never had to fight around data hygiene like a database. Where do I get my data from? How does it flow? I was very, very fortunate or we were fortunate to have that challenge already solved, right? So for us, it was really, okay, how can we push the boundaries and create this true omnichannel setup, which to me lays the foundation for anything that you want to do around A.I., right?
Speaker 2 If you have to fight around trying to connect your systems and make make all those individual islands work together, that's just such a hard, such hard task and takes away from your ability to execute AI or execute any type of omni channel setup like in its true coin, how it should be. So we had those two tools. We decided to bring everything into one platform, which we did in 2020 for what it meant for us is the team is much happier.
Speaker 2 That's always been number one priority. We have all those manual efforts that take away from the task that should actually be executed. We are much more flexible. We can create and I'm not saying we create it because we're still in that track, but we can create that true omni channel setup where you have a tool that just orchestrates your entire customer experience and makes sure that the customer gets the right message at the right point through the right channel.
Speaker 2 This typical philosophy that everyone is striving for.
Speaker 1 That it's inspiring, and that I feel like it's a utopian company as it relates to the tech stack component and the data behind it, because rarely do you get to marry the two at the same time you might have a really great tool, but then you have to clean up your data or vice versa. And so it's very impressive.
Speaker 1 And I'm curious, is this indicative of perhaps the company culture that shaped this kind of strategy, this forward thinking, or was it the opposite? Was the CRM strategy the driving force?
Speaker 2 Great question. And that was really to my surprise when I joined Fabletics eight years ago, that it was just ingrained in our company culture, like our founders push for that drive and that innovation, and the company was founded and set up in the way to allow exactly that. I think CRM adapted to it and made its own version of that.
Speaker 2 What it means for us. Since we are fully integrated, we don't work with any agencies in our CRM environment. The team is structured in a way where you have a marketing site and the operations side. The marketing team can solely focus on strategy, segmentation, testing, the messages that you want to send, and then the operations side can focus solely on building those campaigns, maintaining the system, making sure that the marketing team understands what opportunities they have within the system.
Speaker 2 And both of that together allow both teams to be very specialized, feel a high sense of ownership. And then I think on top of all that, Julia, our culture to be very data driven, which also impacts the way how we run CRM, which is probably a good balance between brand and performance. It's not just brands, it's not just looking once a week at numbers.
Speaker 2 We look at numbers and performance in general as a key driver of what we do, which helped us to make CRM a substantial conduit to the business over the last 8 to 10 years.
Speaker 1 That's amazing and also really helpful for folks to recognize if you actually empower your teams, it will drive everything you need from change and innovation, but also ultimately revenue. And. If only everyone could take that tidbit of advice and incorporate it.
Speaker 2 I'm a very, very big believer in that. If you empower your your team to make their own decision, they're just more motivated. They like bought in. They are happy to do that work. What they do and that just drives great outcomes and results for sure.
Speaker 1 And so I'm curious with this really kind of like sound or mindset that is embodied and imbued into the corporate culture, how does this influence both how decisions are made when where they're communicated, especially as certain channels continue to be bigger drivers for you versus maybe other fashion brands? How is this all combining and working together?
Speaker 2 I think what's important is since CRM is such a substantial revenue driver for the business, it's not just a topic for decision team. In most corporates you have one team is doing product, the other team is doing zero, and then you have a marketing team and all those different teams and all those different teams have their own personal agendas and all the different teams try to align yet they all work a little bit on their own agenda, right?
Speaker 2 We are no different, but I think what we do great is just communication and we are doing a much better job in aligning our priorities. What it means for us. For example, SMS and text messaging in general is still the highest growth channel that we're seeing, which means that our product team is actually fired up on. What can we put as a message on site?
Speaker 2 Where can we put that semester out? How does all that work together? And they are actually the ones coming to us with suggestions of all that we can put a phone number field in there and like we can have an option in there. So it's the buy in from cross-functional partners that help us to make those decisions together and then set the right priorities in terms of what we want to build together.
Speaker 2 Another example is our product team is highly focused on, of course as well. They came up with a feature ideas that help the site, that help CRM and then it was driven from them also a little bit. Right, of course is in a partnership with CRM and different teams. How to implement that. But I think there's just a high degree of interest in, in various channels beyond your own responsibility.
Speaker 2 If you want to put it that way.
Speaker 1 It's fantastic and we'll feel facetious even asking about like what were maybe the biggest. It sounds like it wouldn't be cultural, but maybe operational hurdles in building out this internal autonomous urine team. It sounds like everyone is proactively working together in a lot of ways, but were there any bits that folks could take away from?
Speaker 2 For sure? I think we as a company are set up in a way that we try to break down any internal hurdles as much as possible. Of course, again, getting back to that broad mapping agenda topic, it also influence bandwidth, which is something that we always work through. However, some of our mindsets are drive and innovation, and we embody those mindsets every single day.
Speaker 2 What it means for us in the website is I luckily I am and I'm very grateful in the position of having a fantastic CRM team as one of them is an expert in their field, highly motivated, highly skilled. So for me it's just cultivating and maintaining that culture. But how I do it is really empowering the team to make their own decisions.
Speaker 2 I am not involved in day to day. I am not looking at emails and deciding whether I like that button in red or white. The team knows what works right. The team is empowered to make decisions as long as the results are speaking for themselves. There is no need for me to give any type of direction on email.
Speaker 2 Should look like how an SMS copy should look like. It's the overall building blocks that are very important to me that I work with with the team and then they can set their own agenda and execute it from there. In addition to that, and I think that's probably even within the company, I have a very high tolerance of risk.
Speaker 2 I allow the team to try something out, to test, to learn, sometimes to fail, but always to win. Right. And giving them that opportunity to grow, to learn just makes them happy and makes them very engaged and helps us to really embody those mindsets of drive and innovation.
Speaker 1 I love that we're talking a lot about how we've got this builder's mindset with your team. I'm actually curious, how is your workshop? Could you break down what CRM team means?
Speaker 2 Looks absolutely so. CRM it's about X means owning all marketing channels, which are email estimates and push notifications for our prospect customers and for our customers that we call members or VIP. And the auction is very simple. It has a leader for the marketing side and has a leader for the operations side, and they have their own team supporting day to day business for all brands that we support, which is teletext analytics, Scrubs and UTI.
Speaker 1 That's amazing. And how do the team stay coordinated and in constant kind of transparent communication?
Speaker 2 Number one, we have an open office space. There's not even one wall between any one of those people and they talk every single day with each other. We, of course, have our alignment meetings that are kept to a minimum because otherwise you just drown in meetings every single day. And I feel it's very simple, you know, it's just like talking with each other.
Speaker 2 We are in the office Tuesday, Wednesday and Thursday, work from home on Mondays and Fridays. We made that remote policy work for us and there's never a lack of alignment or transparency. I think a lot of us also as a leader are just keeping the team informed of how the business is doing. What are the larger priorities, what's in the moment relevant for all teams just to give them the context and business acumen and allow them to make their own decisions that are aligned with the business.
Speaker 1 Amazing. I want to shift gears a little bit more to building in-house versus really outsourcing, which is the standard practice. And so we've been talking culturally about how this aligns the most with semiotics in the greater fashion group. But yeah, were there any other particular reasons as to why the capabilities were built in-house rather than relying on outsourced agencies and contractors?
Speaker 2 Great question. I think from a founding history, it just evolved that way, right? We built our proprietary tech stack. It was just added to it. Certain functions. What it means for us is today we have incredible speed and the flexibility to built whatever we want to build you. Essentially the entire piece of working with third parties. I'm not even saying agencies because of course you have like various vendors that contribute to an enterprise of our scale, but you cut that middle piece of trying to align everyone in your network around you, making sure everyone knows what to do.
Speaker 2 We don't have that stuff, which means if we have to adjust the campaign done in a second, if we have to reshoot e-comm images because we feel like we haven't hit the quality we want to get to, it's done in the day in house if we have to adjust the email calendar because you know, a promotion has shifted that they are very easily done because the creative team can do it in a second.
Speaker 2 You don't have to reach out to a project manager. That then helps you to take that request, goes back to a creative team and sends something back to you. So really that builder's mindset, what you called it is, I think, very, very ingrained and very, very relevant for us. And what it drives is really just speed and execution, right?
Speaker 2 Our go to market for certain things is just lightning speed compared to what you usually talk in a regular enterprise. We launch new products every single month. We launch a new marketing campaign every single month. That means that we have to boost 12 marketing campaigns plus any type of partnerships or celebrity campaigns that we do. That's a very, very high volume.
Speaker 2 I personally believe you couldn't do with with outside agencies. Number one, from an optics perspective, at some point, you probably would reach a limit of what you want to pay for outside and you can just in-sourcing that or bring it in-house and all that together is just again for me every single day. Again, great to see and fantastic and also very interesting to see because we really made it the work of how to integrate the entire value creation from start to finish into our company.
Speaker 1 Yeah, I am frothing at the mouth every time I've been in-house. It is not below that. So I would say your competitive advantage, being able to do something like that and of course mentioning execution be quicker if you need to pivot. Things can happen on, you know, in a moment's notice because you have the resources in-house. I'm curious, does it also lead generally just to faster decision making and experimentation?
Speaker 2 For sure? I think speed is just the number one argument that you will always hear, which is totally true when you talk system specific and performance oriented. What it also means is you keep the knowledge within your team right now. Let's bring everything together. We that we always talked about so far and powering teams. Well if teams read their reports, if teams identify the learnings between simple AP tests that they did over time, they collect knowledge.
Speaker 2 You don't have to share that knowledge with an outside party telling them why a CTA should be, you know, red and blue, because you've tested it up and down a million times. The knowledge stays within the team. Even if a team member is leaving, the next team member, you know, gets trained up on that. Keeping that knowledge in-house, I think is incredibly powerful and just helps you to make execution even stronger, aside from speed and everything else that you can put in there.
Speaker 2 Having that experience and that and the knowledge in-house is just incredibly, incredibly valuable to us.
Speaker 1 Institutional knowledge for sure is, I think, really great bellwether as to whether or not a company will be able to accelerate quicker and also stop quicker. I'm curious, as you say, there's always going to be attrition. How is the documentation process for that institutional in-house knowledge to be able to be shared or scaled as the team grows?
Speaker 2 You know, I would love to tell you that we have a perfectly maintained JIRA board and everything is on there. In reality, it's a PowerPoint file that we just maintain over the year. It says one file per year where we just list all of our tests and test results. It's very simple. There's no magic to it. When you onboard with us, that's probably one of the one of the Bibles that you can read.
Speaker 1 Understood. And that's seen some of your your decks. So I can only imagine what this one is and how good it is.
Speaker 2 But it's not as beautifully designed as outside presentations. But no, there's like there is knowledge. We keep it in our reports. We, of course, to our executive reporting, it's in there. But for the team, it's very simple. It's a PowerPoint file. It's our operational excellence spreadsheet that we have. There's no magic to it.
Speaker 1 Well, that's unexpected answer, considering how many companies blossom, myself included. Just how much documentation and reporting on each and every single thing is so important. Maybe it really isn't.
Speaker 2 It is because the reporting that you do, it's not about building their reporting, right? That's just the outcome. But spending the time to look at numbers at work, see what didn't work, making decisions based off that. It's about the time that you personally invest into doing it and dedicating the time to it and then pulling that on a slide or your SVP to share that with the broader executive team.
Speaker 2 That's just a task that you complete. But the time that you invest, that's what's the most valuable piece in the entire reporting and knowledge building process. I would say.
Speaker 1 That time is the only currency I have to get through, so I might as well cut through this and just get to what worked and what didn't work and learn from it in your present. And speaking of learning from things a little bit curious because you're part of a brand portfolio, are there things that the in-house team is sharing among the other brands that both is informative and helpful from a testing perspective?
Speaker 1 Or actually, is that problematic and makes things homogenized among the brands?
Speaker 2 So of course, we have the power of four or five brands working together under like one portfolio. And it's simple. We talk, you know, we have a team chat, we just share what we think is great learnings is great tests. Of course, our executives talk and, you know, come back to us and be like, Hey, just brand that X, Y and Z.
Speaker 2 Can we think about that for us as well? Even within Fabletics, we have a European business which is managed out of the Berlin office and we have our own U.S. office which manages to, you know, the North American continent, even Europe executes things sometimes faster and quicker than we do it in the US. So we take learnings from there also over here and vice versa.
Speaker 2 We share whatever we developed here back to Europe. What it definitely like makes it easier for us. We all use the same CRM tool iterable so you can easily copy paste anything that you've built in there across your different projects. All brands are also using in the back end the same proprietary tech stack, the same, you know, industry standard snowflake segment and all those tools, which definitely makes it easier from a tech perspective just to share something across brands or within brands.
Speaker 2 I definitely also think that having one client success manager for all brands with Iterable helps. There's just awareness that, you know, these system can bring to us from other things that they did with the brands. And then at the same time, we also allow our best to be independent, right? Not everything that works for Fabletics might work for the other brands and vice versa.
Speaker 2 So there are certainly nuances that we could test up and down to confirm it. Another brand is doing it the same way and they're just failing all the time with it. So there's definitely also differences in individual brands.
Speaker 1 Yeah, I love both. The option for the cross-pollination, but also it's still everyone has their own swim lane. Yeah, but at the same time you're all in the same pool and that's really nice.
Speaker 2 It's like working with any type of brand outside. You have a great connection and you just connect. Share what? Work no different. For us.
Speaker 1 It's a friendly competition, all with the same goal.
Speaker 2 Yeah.
Speaker 1 That's awesome. All right, I want to get a little nerdy about actual MarTech in particular, so I know you're already using AI for some time optimization and, you know, selection, message suppression and particularly content generation one. I'm curious, which has been the biggest impact? And also your story is only enterprise example. I know of using it correctly for marketing.
Speaker 1 And so I want to hear your examples and your learnings.
Speaker 2 Okay. That's true. On a large scale, which a tool makes the biggest impact very clear on content generation. We use sentence optimization. We use chat optimization, we use frequency optimization. We've tested it up and down. What I can tell you is you see impacts positive or negative on performance. But what we realized, it's not moving the needle right.
Speaker 2 And I think it's because of the volume that we have, whether it's good or not, that's a completely different conversation. But we have a very high frequency across all three channels that we serve. And if you take channel optimization as one tool, which usually means that you send, you have one message and two different channels, and you let a tool decide, you know, which channel to use to send that message.
Speaker 2 Well, turns out if you send that one message through email and SMS or push whatever you want to choose, it has a higher impact than letting the tool decide whether you use email or service. Right. I'm still a very, very fundamental believer in we will get there to optimize the customer experience to where we all think today, what the best example is, you know, sending that one right message through the right channel at the right time when you need it.
Speaker 2 We are not there yet. They are honest. We're not there yet. But if you take content generation as what we have today, it's making massive impacts. Very simple examples. If you can have a subject line, a generator, and use a tool that helps you to, you know, refresh that subject line very continuously or even go one step further and feed a touch of a key prompt that gets followed by an API with our customer and product data and have always a subject line written fresh.
Speaker 2 What it means is you avoid fatigue, especially for bigger and transactional messages, right? Because those are usually the ones take a card abandoned. Hey, you left something back in your cart. Customers will realize that if you are able to have for every single email that you sent around the card about in the browser and anything that you know is very repetitive.
Speaker 2 At some point if you can bring in new, fresh wordings, messaging, language, whatever you want to call this, it drives performance. And if you take this a step further, we call those letter format emails forever. It's probably like a simple, plain text email. Just the format itself is already driving the rate performance. If you take it a step further and be able to customize that message individually beyond Hey, first name, I hope City is treating you well, which is very simple what you can do just by using variables.
Speaker 2 If you can have an air generated content that is just more personal, more approachable, even more relevant, that is just skyrocketing performance for us. And I know that was very passionate about this topic. I could talk about that for days. What the challenge for us is today, it's too simple things. Number one, we're realizing that central optimization charts say all those tools are not moving in the big scale.
Speaker 2 And number two, content generation is only limited. I almost want to say how much you want to pay because you have to go through a touch of beauty or an open eye or any type of other air provider, and they just charge you for every single prompt. So if you want to send a million emails or a million SMS, whatever you want to create, you've got to pay for that very reoccurring versus in today's environment, you pay your access fee for any tool that you have and you send as many emails as you want.
Speaker 2 There's just another cost component coming in which I think we need to explore a little bit, but that's truly for us, the only limiting factor. If I wouldn't have any budget constraints, we would probably have a 1 to 1 customized message for broadcast every single day.
Speaker 1 Wow, that's really encouraging to hear. One that it's actually working. But there's so many question marks on brand guardrails, on potential hallucinations, and is that something you've experienced or have you been able to place the right bumpers so everything stays in the right lane?
Speaker 2 We try to keep everything in the same lane. I think I have to spend a weekend to look at messages that we sent and find the ones where it's like, Ooh, how can you send us the prompts that we're using and the tools that they're using allow us to stay within brand guidelines. And it's certainly something that we even have to explore further.
Speaker 2 And, you know, what are the boundaries left and right? Do you have restricted too much? Do you not restrict it at all?
Speaker 1 Like it's a tricky.
Speaker 2 Balance if you don't restrict it at all, what's it like? You know, what's the performance impact? If you do restrict that, do you believe your brand is still represented the great way, or do you have to accept any performance cuts on that site? Like we are still in that learning phase? And that's how I'm seeing I. To be fair, I had a conversation with our CEO and I was like, I would never say sign a three year contract for any at the moment because I have zero idea of what's coming up next month and what rates if you just get launched again.
Speaker 2 So it's just, you know, driving performance, which is always a win and that feels good. But it's also about the quality of site where you learn like how does it work? What can it help us? And you use ten different features and you've got to align whatever tools you want to use in the future and then create a powerful set of all of that.
Speaker 2 And, you know, just brand controls or restricting or whatever you want to call this, your messages is certainly a part of that.
Speaker 1 That makes little sense. And it's also, I imagine, pretty inspiring and also a good gotcha of really the way in which the APIs are set up right now are not for personalization at scale and from a cost perspective that will eventually get cheaper. But also there's computing power to think through. And so there's a lot behind the scenes.
Speaker 1 So we've been focused a lot on content generation. I want to name and discuss the tools that you're leveraging and how the actual inner workings work. Because I want to get nerdy and because you're truly one of the few companies I know that leveraging A.I. successfully at scale, even with certain constraints. So tell me a bit about the tool, Jakob, and how you're leveraging it today.
Speaker 2 We onboarded Takhar in February this year, I believe what it does is for everyone simply explained, You train the tool on your brand, it's your brand voice, you tonality, and you give it inputs like, you know, subject lines from the last two years, including performance to see really what patterns work and what drives performance. You can set up an experiment.
Speaker 2 It's a card and just sticking to a subject line for for simplicity, you'll be like, okay, I have this campaign here. Let's take a card dependent. The prompt is urge customers to check out the products in their cart, and then the card gives you a number of variants that is, you know, flexible to term. We usually do somewhere between five and eight.
Speaker 2 And those variants are based on your brand voice, your brand tonality. The benefit is that the marketing teams have to manually approve those variants, which is the human control and oversight in a I not going rogue. And then essentially the integration with our network is very simple. You have a data feed into iterable, you have a placeholder variable as a subject line, which is essentially the variance that the card developed for you.
Speaker 2 And you have a feedback loop into checkout which then sends, opens and clicks from Iterable back into the cart. Now what it does is the messages get sent out. It's pretty simple to like an A, B, C, D, E, F, G, whatever, how many variants you have tests and the tool learns which variants perform, which don't, and automatically optimizes the performance for your campaigns, which is especially great for triggers and transactions that you don't maintain on a daily or even weekly basis.
Speaker 2 Because as you work through those different subject lines or any type of content, at some point you will see fatigue, right? That's, I think, what all of marketeers already saw in the past and especially is your team. If the team is a little bit smaller, we are trying to, you know, push the boundaries and even optimize it more.
Speaker 2 But even if a team is smaller and you don't have the bandwidth to just go through all of your triggers monthly to update subject lines and make sure that you read performance and see what works. Sakkari can help you there because it's optimizing the different languages that it created for you. And once there's a fatigue and wants to cart, you know, reached its limit off, which is the very best variant, it automatically drops to ones to the losing and gets you 510 new variants that you can approve manually again.
Speaker 2 And in that circle, you make sure that everything stays relevant and stays on performance and really drives, you know, incremental wins for your team.
Speaker 1 I love that there's a positive feedback loop. There is also a human approval process and also that this is, in my opinion, not where folks would think of of the triggers and the transactional emails that you kind of set and forget. This means you're not setting anything to forget it. If anything, you're setting it to optimize, which never happens in most.
Speaker 2 We are part of that. It's the same for us. The most love and attention. Get the daily broadcast emails that you send to triggers and transactions. The ones are actually, you know, are what I would say are the true moment driven messages that you should send. They just don't get as much love. And if you use the tools extra card or or other tools, they just help you in maintaining relevance.
Speaker 2 And I can update that, look and feel and messaging in there.
Speaker 1 If that means you're both able to invest in the present day to day, which is, you know, the next campaign for this month, but also you're able to maintain, keep hygiene and really customize with the tool. It's a card that I have seen wrong this whole time. We've really been diving into all of the ways you're leveraging AI.
Speaker 1 What do you see as type Lennox's differentiator or EDGE? Is it the in-house team? Is it having clean and well established data? Where do you see being such a success and why for your team?
Speaker 2 I think it's all of it together. There's not one thing where I'm pinpointing it down. The advantage that we have as a company is again one of our mindset to strive and innovation. What it means is you start by giving your teams access to those tools. Most corporates today are still thinking about which tool could be useful. What are the compliance guidelines around that?
Speaker 2 We moved very quick on that. All of our teams have access to such a beauty and enterprise version that they can use for whatever tasks they want accomplished. And then, you know, our mindset of everything in-house, building our own tech, allowing teams to test, learn fail and win, having a high tolerance of risk taking, allowing teams to be engaged and own the work that they do.
Speaker 2 All that together is, I guess, what puts us ahead in. I when you talk industry wide.
Speaker 1 That makes total sense and shifting gears to maybe thinking larger to the entire industry. You're not struggling with what most brands struggle with which is both tech that and siloed data and fragmented teams. You guys have really aced each one of those components. What is your advice for folks who are trying to achieve and break through that? Murky just fragmented component?
Speaker 2 That's such a loaded question.
Speaker 1 I know. That's why I'm asking it.
Speaker 2 I feel like, look, if you talk with any enterprise that is facing those challenges, the responses you got is, oh, my gosh, it is so much work. Oh, my gosh, we don't know where to start. We will never get it done. It takes years. Everyone feels overwhelmed, right? And you make this a big project and everyone is trying to accomplish what they want to accomplish, but they never get to it.
Speaker 2 My advice, and I know it sounds silly, start small, start by having the right tool. Don't feel that you need to plug in your data points at once into this tool. Bring all the channels that you want to send through into this one tool. Have a few powerful, you know, customer data points that you can use and just take it from there.
Speaker 2 There is no magic to it. Think starting small and building off your your expertize, your skills, what you learn gets you to a results much quicker than having those conversations off. Oh my gosh. Now we want to have a new CRM tool, but we don't have a CDP and we need to have a CDP. And. And what does it mean and how do we get all this data in there?
Speaker 2 I feel like all those questions always get to the same result, which is everyone feels overwhelmed and no one is really motivated to get things done.
Speaker 1 You mean a spiral is not the way in which we can achieve and accomplish things?
Speaker 2 I'm sorry. No, it's.
Speaker 1 Not.
Speaker 2 It's totally not. And then I think the only one thing is that your teams created when we moved to editable, it was not me deciding which tool we going to go for. I managed to process. I made sure that we all stayed on, you know, focused on the goal. I didn't make the call that we chose the honorable.
Speaker 2 It was two teams, right? What it meant is everyone was super excited, everyone was bought in and we all worked towards the same goal aside from, you know, trying to figure out what to do. I think the teams buy in big, big point.
Speaker 1 Yeah, I think that empowerment of your own team is the driving cultural force. That means you can't get through this and it's making it an achievable small steps, phases at a time. Yeah, everyone's on board.
Speaker 2 And no, it's easier said than done. I'm sure we will all keep struggling with it, but start small, start somewhere and you will get to something.
Speaker 1 I love it. So of course we've been talking about hyper personalization, leveraging AI and how your team has been managing it. Do you see the future of this being potentially even more delightful and surprising of your customers? Or maybe for the industry at large? Just smarter spam and more things we don't want in our inboxes and phones.
Speaker 2 I think it's both. And I would love to say it's clearly the more hyper personalized, you know, delight that you deliver to your customers, which is what we want to do. But you will also certainly have, you know, those flagships out there that just use AI to have to smarter spend. And I think we it's already out there.
Speaker 2 It's not even in the future. It's already out there. Probably will just become more what A.I. will help us is just creating those true one on one relationships. And I think we as marketers just have to be very sensitive and smart about how we use it. Because if you receive a message that is, you know, that reads great, is very personalized, but feels to an extent where it's too personalized, it makes you feel like that brands on marketers exploit your data right?
Speaker 2 And they know who you are. Well, in all fairness, those 110 million contacts that we have in our database, I'm not going to go in there and be like, oh, this person does this. This is what they shop. Very interesting. Like no brand has time for that, right? But it might feel that way if you start sending those very, very individualized campaigns one on one.
Speaker 2 So just being sensitive to that topic, because I will clearly allow you for doing that. Right. You can process data faster than ever before. You can write messages faster than ever before without basically doing anything. And I think that is what is very, very important that we as marketers don't overstep that line right away, because then it might indeed just feel as spam to customers for sure.
Speaker 1 It's a fine line of exploitation and personalization.
Speaker 2 Yeah, but again, like, we don't sit there and be like this one person day shop, just let me grow a recommendation for them. That's not what it is, right? It's just like you have to aggregate it, select a very highest level, and then tools send send those messages.
Speaker 1 All right. Looking ahead, maybe 1 to 3 years, both of which are kind of like yours, as it relates to AD. But how do you see continual change within lifecycle marketing and customer engagement with a I actually evolving and maybe being able to provide the next best action more than just the phrase.
Speaker 2 Well, when you said one, two, three years, I was like, Oh my gosh, eight, three years. I don't even know where we're going to be in a month, but I think that's still the case. Technology is evolving a lot, but it's not just technology. It's also teams that have to evolve. Right? You conscious, although it's at your fingertips, at your disposal to utilize whatever tools you want.
Speaker 2 You realize it's the brands that also need to adjust and make use of it. So I think by next year we have enough learnings and insights to build the strategy around where and how we use AI on a day to day basis. We have enough insights to say to what extent it makes it make sense for us to invest a budget to have a true one, the one communication versus thinking in segments or clusters or personas or whatever.
Speaker 2 And then by that time, the team also should be at a level where A.I. is just is more than writing a check of a problem to improve a copy for something. But you truly have tools that are a first built. And I think that probably doesn't bring soon to like year 1 to 2 where you cut manual efforts and you allow your teams to focus guiding A.I. and really create the moments and campaigns and have have A.I. help execute you those campaigns.
Speaker 2 Right. So I got first of all, like, oh, three years. I don't even know. But if you look at it realistically, I think it's more companies and teams have to evolve to make use of the technology that they have and get to the right result there for sure.
Speaker 1 Yeah, I'm hearing we're eventually going to become shepherds of marketing as opposed to, you know, the ones doing all of the work at all times. Yes, there will still, but of course, manual work to it, but one being shepherds, but two in particular. It sounds like our entire way of thinking about our org charts are going to change.
Speaker 1 And this is actually how you and I met talking about this, where we're talking about how this was going to completely change the entire industry and really change the entire org chart. So your sales team has to be in conversation with their customer support and success team and your marketing team because you're all of a sudden going to start using similar channels to that end, think the interface, the actual platforms and tools we're all using are going to start combining more and more towards that.
Speaker 1 I first platform, whatever that may be. And I don't think it's been built yet. I agree it's a big question mark.
Speaker 2 I haven't seen anything out in the market that truly offers everything. There's lots of new startups that are pushing into the market. Great, because I feel like those startups are chasing the big ones and also driving innovation. I haven't seen a reliable or sustainable enterprise grade platform that just is integrated end to end, or I think where my head is like you will probably not have a customer support system built as one tool with your CRM system, right?
Speaker 2 Those will probably stay two separate tools. So the question is really what is the connecting platform in the future that helps manage all those different tools, different teams, different work structure, what you mentioned. Yeah. So still create that one cohesive esim experience. And I think that is truly where the industry has to work on because in all the different individual areas, you have great tools.
Speaker 2 Great. I push already. The connecting piece is what is still missing.
Speaker 1 Saying we've got your data layer and then you have the platforms, but there's no real intermediary for marketing. There's sometimes a CDP that kind of access, that component, but that's never even fully come to fruition in terms of ownership goal. And so to your point, I think a real actual data platform to the truest term and the concept is that missing piece, that's where MCP protocols and different aspects can really become that.
Speaker 1 But you know, we're not quite there yet.
Speaker 2 You're sure it's going to be exciting?
Speaker 1 It sure is. All right. Last question. We ask any and everyone on the podcast, who is someone we should have on the podcast question.
Speaker 2 But I think I would say it should be our co-founder, Dan Dressler. He's a true brand visionary. And whenever I'm with him in the room, I'm just like wired and get it going into myself and be like, Wow, how can you be such a brain? It's always a pleasure to listen to him and experience his work. So I would say to him.
Speaker 1 Okay, well, I'll take that introduction. Thank you so much, Adrian. Where can folks find you and get in touch?
Speaker 2 You can find me Mondays at home, Tuesdays, Wednesdays and Thursdays in the office and Friday from home as well. No, I'm just kidding. I'm on LinkedIn. That's probably the easiest to reach me because of all the other social channels are private.
Speaker 1 As it should be. All right, thank you so much for coming on the pod.
Speaker 2 Thank you for having me. I really, really loved it. Thank you so much.
Speaker 1 I get you.