Klaviyo Is 1% Done: What Their Co-Founder Says the Other 99% Looks Like | #630

Klaviyo is sitting at $1.2 billion in revenue and 196,000 brands. Ed Hallen says it's 1% done.

Ed Hallen co-founded Klaviyo in 2012 with Andrew Bialecki, off the back of a dinner in Boston where an Australian entrepreneur selling suits online told them he spent three hours a week manually emailing his customer list. They offered to automate it. Thirteen years, a 2023 IPO, and a shift from email tool to autonomous B2C CRM later, that same core idea, understand the customer, act on it, measure it, still runs the company. As Chief Strategy Officer, Ed is now the person thinking hardest about where Klaviyo goes next.

Nathan caught him live at K:SYD in Sydney, straight off a keynote to 600-plus people. Klaviyo is one of Add To Cart's two major sponsors, and this conversation still went straight at the hard stuff: pricing, attribution, the SaaSpocalypse, and what you're probably leaving on the table inside the platform right now.

Today, we're discussing:

• Why the move from email tool to autonomous B2C CRM is really just the original 2012 idea at a bigger scale [05:00]
• The honest story behind the pricing change from contacts emailed to active profiles, and what it means for your database [22:39]
• Why your disengaged list is a segment to talk to differently, not a cost to delete [30:30]
• How Klaviyo thinks about attributing its own value when it's one part of a bigger marketing stack [25:30]
• Where Klaviyo's B2C CRM vision is heading now that service and marketing run through one platform [33:00]
• The single most underused feature on the platform, and why it isn't the newest one [41:00]

Connect with Ed Hallen | Explore Klaviyo

Transcript

KSyd Intro And What We Cover

SPEAKER_00 0:01

There was a gap between the way we said the pricing worked and the way the pricing actually worked. We had a handful of Australian brands, and at the time we thought of it large as a pin. No brand who said, Oh, I'm leaving Clavio because I've built Clavio. It's like no brand has actually done that, right?

SPEAKER_01 0:20

All right, I am back from a very special day at K-Sid Sydney, which was Clavio's big day. Big presentations, big celebrities, big everything. And I was lucky enough to sit down for three in-person interviews, which I'm going to bring to you three episodes coming up where we get to deep dive into everything Clavio, CRM, email. Even if you're not a Clavio customer, there is so much that you can get out of the next three weeks when it comes to retaining your existing audience. Now, today I am sitting across from one of the two people who founded Clavio. Ed Helen co-founded Clavio in 2012 with Andrew Bielecki. He has served as the CPO through the IPO and is now the chief strategy officer, which means that he is the person thinking hardest about where Clavio goes from here. The company is now sitting at $1.2 billion in revenue. They have almost 200,000 brands on the platform. And Ed still says publicly they're only 1% done. Now, as I said, we recorded this live at KSID in May 2026. Ed had just come off stage fresh from a keynote where he had been delivering new Clavio features to over 600 retailers in the room. And he was still really happy to sit down with this. And I wasn't going to say no to that. Now, full disclosure, Clavio is one of our two major sponsors and has been a big part of Add Descartes over the last few years. Big thank you, as always, to Clavio and to Shopify for making this episode possible. But I wanted to be upfront about the sponsorship because I also wanted to be clear around what it means for this conversation. Absolutely nothing. We went everywhere that I thought you wanted me to go. Pricing, attribution, loyalty, where Clavio is actually heading in the next five years, and what you are probably leaving on the table inside the platform right now from the person who knows the platform the best. If you have a question about Clavio, I tried to have it in my head when I was talking to Ed. And just quickly, before we get into today's episode, if you are not already subscribed to the Add to Cart newsletter, head over to addocart.com.au. Every episode that we release comes with a cheat sheet and it goes straight to your inbox, which summarizes the main lessons, the main learning, the things you need to know. So even if you don't have time to listen to the whole episode, you get the good bits. Sign up over on addocart.com.au.

Founding Story And One To One Vision

SPEAKER_01 2:49

All right, here is my conversation with Ed Hallen, co-founder of Clavio. Ed, welcome to Ad to Cart. Thanks for having me. Super excited. What an honor to have you here. Ah, this is a career highlight for me. And to do it at KCID, fantastic. You're here 12 months ago when it was KCID 2025. What do you feel energy-wise in the room?

SPEAKER_00 3:11

Is it any different? Look, last year was our first K Cid. Super exciting to get to do it. I mean, from like our first 20 customers back in 2012, we had a handful of Australian brands. And at the time we thought of it, you know, largely as a pain because like they would need help in the middle of the night. They're like this. Bloody Aussies. But it's like so cool. So it's so cool then to see it. I think now this year, like it's even larger. People are pumped. It's just a great energy. So it's just exciting.

SPEAKER_01 3:35

It feels like there's just so much possibility out there. It's like people aren't looking for playbooks anymore.

SPEAKER_00 3:40

Yeah.

SPEAKER_01 3:40

They're looking for ideas. And I think that's a big difference that AI, I'm sure we'll talk a lot about AI. Is opening up people like, actually, I don't have to be like the roadmap's great.

SPEAKER_00 3:48

Yeah.

SPEAKER_01 3:49

But I don't have to be stuck to a roadmap. I can build on the roadmap to what's right for my business. So everyone's swapping ideas on the floor. That's what I've noticed that it's different from last year.

SPEAKER_00 3:57

Yeah, it's really great. I mean, I think there's right. There's AI helps. I think we've always seen that there's connections between brands, between like the people building and doing these day-to-day are incredibly valuable because people like throw ideas off each other. And I think well what we're seeing this with K Sydney too, is like now that like more and more people know each other, right? They've like built the good connections before, which is really powerful. That's awesome.

SPEAKER_01 4:15

So take me back. 2012, you co-founded Clavio with A B, and literally the the Kube on results came out the other week on track for $1.5 billion. Like you said, starting at that Model Space 20 Aussie to see this today. Was your original vision for Clavio what we're seeing today?

SPEAKER_00 4:34

I think the product and the value kind of. So we, when we started, we said, hey, we knew we're going to start a company, and we said, the way we're going to do that is we're going to find a problem that exists in the world. We're going to solve it. And so we had a bunch of different ideas. We'd try each idea for about a month. And then if we hadn't yet figured that out, that kind of equation of like find problem, get someone to pay us, we'd move on to the next thing. But the third or fourth thing we built was this like data layer where we said, okay, in our past life, we're building this database layer for really large brands for the Starbucks and boots and targets of the world. Let's build that and we'll, you know, build it for businesses of all sizes and we're going to sell that to customer success teams. So we built that. And what we found is, you know, two people bootstrapping company, very tough to sell to a huge enterprise. That idea failed. But we said, hey, what if you took that same technology and now if we stuck email atop it or like some form of communication, but email was the one at the time we could do, hey, you could use that to drive way better marketing. And said, okay, like talk to a bunch of different folks, try to sell that. And finally the equation worked. We actually were sitting at a dinner in Boston. We met this Australian suit entrepreneur who had an online store selling suits. And we were kind of explaining, like, we have this customer database that can like, you know, come out with email and you know, started to talk about his use case. We said, okay, would you buy this? And he said, like a hundred percent. I currently I'm going one night a week. I spend three hours going through my customer list, figuring out when people bought last. And then I manually write them emails. And that is a huge pain in the butt. And we said, we could just automate that whole thing and make it go away. And he said, Great. Like I will pay you tomorrow if you control this.

SPEAKER_01 5:59

Because in 2012, is email automation.

SPEAKER_00 6:02

Just wasn't a thing, really. Not a thing? Yeah. No, there was like there were a couple people, you know, in you could do it with engineers, but for the most part, there wasn't you couldn't really use a platform. Yeah, it was all the shelf. Yeah, yeah. And so that was kind of the starting point. And so in some ways, like, you know, if you look back to the vision now, it's like the exact same thing is true, which is like build this database platform, let people take action atop it. Now it's not just email. Now it's not just the humans atop it. It can be like agents too. And then measure the impact of what you're doing. And so I don't think we would have predicted how that's all played out, but like we're still doing the fundamentally same thing. We certainly couldn't have imagined, like, we're pretty like standard folks. You can't see it on the camera like my shoe is falling apart. Like we would never have imagined like the scale and the size and those things. But I don't think we would have been maybe surprised because we thought the idea, we we were so convinced that like this idea of customer understanding was really, really important.

SPEAKER_01 6:51

Yeah, yeah, yeah. And was the idea back then a one-on-one communication with the customer? Because this was a conversation we were having before with your clavio champions. We're talking about segmentation, but the future, we're not too far off from truly being one-on-one. Is that the vision?

SPEAKER_00 7:06

Yeah, I mean, we just talking about this with somebody else right before this, which is like Andrew and I had this debate for about a year, which was like we knew one-on-one was a thing. And actually, the first thing we built was kind of this like one-on-one triggered flows. And it wasn't deeply personalized, but it was like you could build the flow and personalize it somewhat in a way that just didn't exist at the time. And the question we we debated a bunch was, well, how quickly will campaigns go away? And at the time, we ultimately included like we weren't actually that close. Like you still fundamentally had to have campaigns, like technology wasn't there, like one-to-one would be part of the story, but it wouldn't be the full story. Now I think that's, you know, we're headed towards a world where like we might we'll start to see more and more, more and more things that are one-to-one. And it's not just the content of a specific message. It might be just, you know, it's more and more the number of messages someone gets. It's more and more the types of messages they get. It's the channels they get. Like the whole thing is gonna become a lot more one-to-one. Super exciting.

SPEAKER_01 7:58

So exciting. Like, and even I saw, and I I'm not across the detail, but I saw that one of the newer features is individual send times. Yeah. I think people are like, that makes a lot of sense. Yeah. How does it work?

SPEAKER_00 8:11

Yeah. I mean, I think it's like step one. Like it's not send time's great. We've got to get more and more like there's so many things that we can do to extend that. Yeah. But, you know, I think ultimately we realize that like people, you know, we can we we have we have all the data. We have all the data across customers. We can understand when really is somebody most likely to interact with it and then bake that into the syntime. And we, you know, I think the good thing about Clavi or we've always appreciated is this like KAB stat where we can measure to see are people actually driving more value by doing this? And is this thing actually working? And with syntimes, it's like you could obviously just, you know, what matters is not just personalized syntimes, it's that you're like personalizing them in the right way. And so we can use that KB to keep optimizing the algorithms to say, okay, we're better and better at optimizing that syntime to get it to make sure it's right. Yeah.

SPEAKER_01 8:52

I uh was downstairs when you announced K Social as the next frontier to conquer. And obviously we had uh B2Seq CRM last year, and we've got customer service in there as well. So it's much more than just an email platform.

SPEAKER_00 9:06

Yeah.

SPEAKER_01 9:07

Do you see that vision of customer data at the core? Because you're now almost at 200,000 customers. So you get four billion touch points or data points. Is that the core competitive moat for you? And it doesn't matter how that surfaces in what channel or what service, but as long as you keep that customer information and behavior accessible to your customers, is is that the moat?

SPEAKER_00 9:32

Somewhat. I I think so there's we think about the the moat or what makes you know Clavio valuable, you know. So first is certainly the infrastructure that collects those customer attributes, those four-related attributes. The piece of data that actually is like incredibly valuable in conjunction with that is actually customer outcomes. So it's knowing that, look, this type of flow worked for this person and didn't work for this person, or these types of people didn't respond to campaigns in this way. Or I did X, Y, and Z and customers converted. So like all that like outcome data is data that we generate atop that, but is incredibly valuable as well as having all that data about exactly who people are, you know, their website activity, their purchases, their return activity, all that stuff. I think more and more the piece, you know, that we've realized is just something that's got to be a continual focus is we've always talked about Clavio being channel agnostic. And what we mean by that is have an amazing data layer, but then you've got to be best in class with every channel, but you need to support all the channels. So that could be email, it could be SMS, it could be WhatsApp, it could be RCS over time, it could be things like, you know, plugging into other platforms using Direct Mail, it could be the website, right? But we've got to make that work seamlessly and we have to make it completely scalable as brand scale to also work and provide amazing, amazing deliverability. So when we think about what that kind of like mode is, it's like taking those two, adding more intelligence to top, providing kind of a platform for both humans and AI and agents to operate atop that. That is incredibly powerful, but it's got to be all those pieces in conjunction. Doesn't mean that like, you know, we'll more and more like people might be using Clavio to or like the Clavio UI to access it. They might be using like a you know Claude to plug the MCP in and do things that way. But the infrastructure is what drives a ton of that value.

Customer Data Platform And AI Openness

SPEAKER_01 11:08

Yeah. I'm interested in how you think about this as chief strategy officer. I had a lot of questions around what does a chief strategy officer do, but maybe that's a lot of the answer here. When you think about AI and how you help your customers in whatever way they want to use AI, obviously there's two schools of thought. You've got Clavio as the platform where you can streamline operations within platform and add tools and add features within platforms to to make that easier to use, give better insights. And then there's the actually here's the MCP or here's the connector to however you want to use it and integrate with all your other tools. You obviously have a good resource bucket, but you don't have infinite resources. How do you decide where to put your efforts when it comes to AI in platform or opening it up for people to connect however they want?

SPEAKER_00 11:57

I think fundamentally, well, first what we've seen is that brands who adopt, who are users of the MCP, they end up driving more KB. So what we see is it actually it doesn't decrease the amount of time they spend in Clavio, but it tends to be supplemental and that their overall KV generation gets higher. So we have a deep belief in when we build features, build them open in a way that we expose them via the MCP, that we expose, we make them available to other platforms too. And that's just like if you're a PM at a Clavio, that's just like something you have to, you have to build. So there's some amount of catch up, but you'll start to see a lot of progress in the next coming months. We'll just get faster and faster with making this possible. And I think we kind of don't think if built correctly, there shouldn't be a big trade-off there. But ultimately we are providing that toolkit, but we've got to make that work for in the UI. We've got to make it work outside the UI. And that's just how tools are gonna get used more and more.

SPEAKER_01 12:50

Yeah. When you're thinking about building those connectors, obviously MCP is a huge step. Obviously, Claude is flavor of the month at the moment. There's no saying that it will be in six months' time. How do you work out who to partner with and where to put your efforts?

SPEAKER_00 13:03

Yeah. We've always thought about this as just be open. So be open, make the platform open, and then let the best product win. And so that's early on this manifested when you know we right out the gate built e-commerce connectors for deep integration with Shopify, with Big Commerce, with Salesforce. And, you know, at the time, like Shopify got a massive amount of more usage. Even if we had customers starting another platform, they ultimately, many of them switched to Shopify. So it's less of a try to pick a winner than make the platform open, integrate with everybody, you know, work with everyone, and then ultimately the market will kind of and like great products will rise to the top and work all together.

SPEAKER_01 13:38

How do you respond to the boroughs who are like, I built Clavio in my bedroom last night with clouds?

SPEAKER_00 13:44

Like that must drive you nuts. I mean, it's like totally fine because we've never actually heard that from a customer, right? Like there's no brand who said, Oh, I'm leaving Clavio because I've built Clavio. It's like no brand has actually done that, right? So what I appreciate about it is like this new world of like people can go and like build stuff at the evening is amazing. Like we've all experienced this. You can build great stuff. It's super fun to like get to use these tools. And like, yes, like people will start to every software company is gonna see that people are building things to get more competitive with them and people are building in new and fast ways. So it pushes you to have to build things in new and fast ways. So that part's a lot of fun. But yeah, the the like overnight, like, oh, I just like five-coded this thing. It's like it's just not um again, we do we do not see people moving from Clay at all to their own built solutions. You're a much better NMMA if I do it since 2012. I mean, like we've had a very thick skin. You know, you gotta have a thick skin. For a long time, it was like, you know, we like we were early, right? It was just two of us for a very long time. And so, you know, rightfully we try to sell stuff to customers and they say like, well, do you have feature A? You'd be like, nope to feature B, nope. Like, yeah, it was it took a long time. We had just, you know, we had to build a very thick skin to kind of like bootstrap it for a long time.

SPEAKER_01 14:53

What if you had to change in your development team? Because when you do have customers, we literally had a customer panel in here before with Harney from step one and Lockie from July. Great. And like those guys are just living on the edge, like and their their philosophy was we'll use what's in the tool, Shopify and Clavio. But if it's not there, we'll build on top of it until it's in the tool. And then we'll take the tool because we want the integrated approach, but we're happy to build on top of it. How do you work with your development team to make sure that they have time to experiment and play on those edges where your customers might be?

SPEAKER_00 15:25

Have you had to change the way of working? Yeah, I mean, most of it goes back to make the platform open. That way, either your team or like all the parts of the CLAVIO team, could be an engineer, it could be a product person, could be anybody, could build stuff atop it. Or like we just see amazing examples from agencies and customers. So keeping the platform open, providing the endpoints, making it possible. And the flip side, yeah, I think through the life of Clavio, we've tried to balance like how do we give our own team. There's there's like focused goals of and big features you want to build in any one time. And then there's a ton of little things that are just like great quality of life improvements for for everyone, but also just like more experimental things. And so it's like a it's a constant balance. I we've never nailed it, but I think that we're deep believers in single-threaded ownership. So kind of like if that's an area of the product or something or bigger product initiative, somebody has to kind of get to make the choices. And that person has to then therefore have the chance to like prioritize and choose these like smaller things that get done as well. Gotcha. How often are you releasing new features? The stats day was, you know, over 475 in the past year. So I mean, like, you do the math, it's like basically constantly. And I'm sure there's there's a bunch of stuff that falls below the line that's like not a feature, but it's like a little improvement. It should only get faster. I think it's on us to, you know, you've got to make them great. They have to clear the quality bar. The number of features matters a lot less than like releasing great things that people use. And so it's on us to make sure we're focused, make sure we're releasing things that are very high quality, make sure we're educating people on what those things are, teaching them how to use them. And then ultimately those things are the things that actually drive customer value.

SPEAKER_01 16:53

Is that the hardest part of making the big bets, the big releases? Like CRM is a big one, right? Customer service is a big one because there's some very embedded technology within organizations when you say, hey, we've got something for you now, come and try it. And they're like, Oh, this is a big move. How do you get that trust from like obviously they trust you for email and SMS customer database? How do you get them to trust the next phase?

SPEAKER_00 17:17

Yeah, I mean, we just got to earn it. You know, like good products, you've got to get them in people's hands. Good products have to typically they you want them to be delightful to use. Like we've all experienced this. So like people enjoy the process using them. It solves some real pain point. And then ideally, you know when they're working, right? So with K with uh marketing, we had KV to say, like, hey, you know this is working because like these people bought these products. You know, we we can show you exactly what happened when you sent when you turn on this blow. With service and get to the same thing where it's like, hey, these are the responses the customer agent had, and you can see which, you know, which ones resolved, you can dive in and actually look at them and see which ones are very high quality. It's ultimately got to be the same thing, but it's on us. Like we have to to prove that. You know, and I think more and more it's like it's not just marketing the room. It's like for service, like there's there's other people in brands who are you know involved in the same way.

SPEAKER_01 18:02

Yeah, it's involving a much wider team, isn't it? Totally. Yeah.

KSocial CRM And Customer Service

SPEAKER_01 18:05

Can you talk us through? I know we skipped over it just briefly before. Case social. Oh, yes. I I saw it flat up on screen, and we got, I think we got the 30-second elevator version of it.

SPEAKER_00 18:16

What is it? Yes. Okay. So, I mean, first, if we just start at the the highest level, the typical brand has an audience that is currently uncaptured. This like audience on social, it might be on Instagram, it might be somewhere else, that lives in that walled garden, but and typically can only be communicated to in like in that way. So it's like you can only talk to them via a TikTok post or via your Instagram post, but it's it's it's a real part of your audience. It's a real person who's engaged with the brand. Some of them overlap with your email and SMS subscribers, but a bunch of them don't, right? KSocial is really the first way to say, hey, that audience, how do we bring that audience into Clavio and let you grow and expand that audience and turn them into loyal customers? And so it started with the ability to message customers on Instagram, DM them, and get them to join your list. And over time has expanded into, you know, other ways to communicate with them automatically, more ways to pull in UGC, more ways to use that content throughout all of Clavio, more ways to figure out kind of exactly who people are and work with them. And so we'll continue to invest a ton, but really it's this idea of like, hey, the customer relationships start earlier and in different ways than they we've historically captured in Clavio. And there are members of your audience who you currently never had this ability to reach out and market to. We're pulling all of that into Clavio, and KSocial is kind of the way to manage that.

SPEAKER_01 19:34

Jeek has always believed that style is how you show who you are without even saying a word. Which is why it's a problem when your email and SMS are saying different things on different platforms with different results. I mean, we've all got that friend who's a bit chaotic. We don't want it to be our cheek. Email lived in Clavio, SMS lived somewhere else. And when it came to attribution, nothing lined up. One platform said one thing, Google Analytics said another, and making confident decisions just became guesswork. So they brought email and estimates together in Clavio's feature CRF. Once everything lived in one place, the feature became much clearer. Attribution finally made sense, investment decisions became obvious, and Stimet quickly proved its value actually during feed sales market. The results are 113 times ROI on the Clavio platform, 20x ROI from SMS alone, and an 81% year-new increase in SMS subscribers. Turns out when your messaging and your data are dressed for the same occasion, performance looks a whole lot better. If you want clearer attribution and more confident growth, head to Clavio.com forward slash AU and see how brands like Sheik are doing it well. Surely Mr. Zuckerberg's gonna shut that down and uh not only uh bring his audience over to an own audience.

SPEAKER_00 21:04

I mean, look, it's like the those are real relationships. You know, it's like we're not like this platform's like a lot of good, a lot of bad, a lot of you know great things for brands, though. So there's incredible things you can do there. But yes, it's like ultimately we think Wild Gardens, a world where they completely own your audience, is not not where anybody wants to be.

SPEAKER_01 21:21

No, I can hear Zuckerberg. He's very happy. He's just he's got an autopilot, that that ad revenue coming in now. Oh, totally. It's good.

Attribution And Measuring Real Impact

SPEAKER_01 21:30

So tell me about while we're on ads, I'd love to dive into attribution because we've got some great case studies being shown here at KCID and there's always great case studies on the website. And it talks a lot around the Clavio attributed value. And I think there's a general skepticism around any platform attributing any value to their platform. How have you approached attribution at Clavio, knowing that, you know, as you said before, we're part of an ecosystem of communication with customers? No one solved attribution as far as I know. How of useful of that attribution from your part of the world?

SPEAKER_00 22:05

Yeah, I mean, I think it's something we'll continue to focus on. For us, like the the more trust we can build in Clavio attributed value, like real meaningful trust of like this is actually how much money you're making from CLADIO, even if that means like the number currently may go down, the better off we are, right? Because for us, that is the optimization metric where we can say, like, okay, you did X, Y, and Z and you made this much, you did X, Y, and Z and you made, you know, some amount that was less or more than that. And then we can know what's truly better. So getting the right answer matters to us. If we think of CLADIO like writ large as kind of like data layer plus your ability to do stuff, but like ultimately you care about that because it's a growth engine. Having like the right scoreboard matters a lot. I think so far there's a bunch of ways we haven't supplemented our attribution or things we haven't done, but we're gonna have to keep focusing on it. So it'll just be an ongoing task to say, how do we make that more and more accurate? Because that'll make us us, Cleigo's brain, smarter and smarter.

SPEAKER_01 22:58

So it's more important to use that as your own internal yardstick of are we getting better or worse than using it as gospel.

SPEAKER_00 23:05

And then using that. I mean, I think for some, it depends on what you're doing. Like it's for some brands, it can be gospel. And you can, you know, always click and like dive in exactly who did X, Y, and Z, but ultimately that should be the more that can be gospel for everyone, the better off it is. And the more we can do that, it lets us get smarter, which is more and more important as we think about things like the launch of Composer and more like AI-driven tools. That intelligence matters a lot because it'll just let AI do more at the top of the platform.

SPEAKER_01 23:32

Now, one of the the common things that I hear constantly, we talk to a lot of Shopify brands.

Pricing Change Profiles And Value

SPEAKER_01 23:38

You know where I'm going, don't you? Um, talk to a lot of Shopify brands, love Shopify, love Clavio. You know, in love with the platform, works fine, does exactly what they want, excited with the roadmap. Changes to pricing. That sent a bit of a shockwave through the industry. Late last year. Can you talk us through one, what the change is and what people need to be aware of? And obviously I'd love to hear the reasons for it and how you would encourage retailers to think about managing their databases to be able to optimize to get the best returns out of the platform.

SPEAKER_00 24:13

Yeah, yeah. Just over a year ago, so when we rolled out some of the changes, which was largely, you know, the biggest change was around profiles. So we'd we'd always said if you went and read the website and read how the pricing worked, it said like a value pay would be based on profiles. The platform didn't actually do any checking there. And so kind of like, oh, there was a gap between the way we said the pricing worked and the way the pricing actually worked, which caused a lot of, you know, understandable friction of people, you know, just like we got a whole lot of support questions being like, hey, how does this work? And like up even Clavius was like, it was hard to explain. And so we finally said, okay, we're gonna bring these in line and we're gonna charge the way we've said we've charged all along. But that ultimately meant that there was a set of, you know, for many brands, like, yes, there was a a price increase. The way we think about this is like fundamentally, we have to make provide features and functionality that means that it's worth, you know, if a profile costs X, someone's making many, many, many times X of value to make that worthwhile. And that's the the thing, the price we have to deliver on. And our goal is to that should be as much of the audience as possible, where we truly that is true. And then I think we should also provide the tooling to say, okay, but here are parts of that audience where like you should not be messing with these customers. You should not be paying us for these customers. This is a customer who, like, that this customer no longer wants a relationship with you. That is in the past. So those are the that's the side we have to deliver. And I think that's how I think the same mindset is how I'd say I'd push brands to also think about it. It's just where is this valuable? Where are those relationships strong enough where you truly it's worth paying us for them, where are they not? And then push us to say, hey, how can we really deliver our side of that promise to help you understand exactly where that equation pays off.

SPEAKER_01 25:53

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SPEAKER_00 26:49

That's right. Roughly. Roughly, though, it's still possible to have customers that you're not actively using in that database. So previously, you could not, you know, if you message customers once a year, you could kind of like there's a lot of different pieces of that timing and like when you're marketing to that like the the pricing would could be highly variable. The big change being, yes, like the number of profiles in the platform, you can still mark profiles as ones that you're not actually using in the platform and not uh and not have. Gotcha. So you're not removing them totally. That's right.

SPEAKER_01 27:18

Yeah, yeah, yeah. They're not like going away. It's really interesting you say that because I get the thinking because even just before I asked Lockie for his biggest tip and his tip was And Dom from Tiger Miss, she was saying there's so much more value in your disengaged customers. Just because you're not sending to them doesn't mean they're interested. Dom said her biggest, her most engaged send is to her disengaged customers that she sends after it looks like they've totally opted out, saying, Hey, here's what you've missed. But she said it's a bestseller for her. So there's something there around even if you're not sending to them regularly, they're still valuable. You just gotta find the right ways to activate that value.

SPEAKER_00 27:54

Yeah. I think more and more they will see the promise we have to deliver on is basically making making it easy to create and craft that journey. Because that journey is different. Like the the the marketing flow to that customer might be way more one-to-one to that customer who like hasn't been around. But we have to make that very easy. Versus like you, your your customer base who wants like all your brand drops and the you know, standard add to carts, the standard, all those things, like that might be a different set of messages. But to the point, the disengaged flow is quite different. But we need to make that really easy. And AI should, you know, I think as we think about things we can automate and do, it's like that's something that AI should be very good at with the Clavio platform to help build out those sorts of flows.

Composer Creativity And Loyalty Thinking

SPEAKER_01 28:32

And you've obviously released Composer, which is your way of helping create those flows and start creating those emails as well. Really rich in data, you are. Like you we talked about how rich you are in data. How far do you want to go down the creative side?

SPEAKER_00 28:45

Yeah. Our overarching belief on AI is it's unlocking tremendous human potential. So there's like a just a huge number of tasks. I think we're what we're seeing really happen is it's it's supercharging humans. It's letting humans do more and more. And there's a line in there of the tasks that like humans are willing to hand over to AI, and AI is obviously getting better. And there'll be things, you know, where like AI completely takes them over. There'll be things where like humans still play like a very massive role in them. And so like all of that is, you know, still being developed. But I think what we've seen with things like the composer beta, where we have that in some people's hands, is like regardless, like there's many more things where it's humans and AI in conjunction. And so we're seeing people do pretty incredible things on the creative side. And yeah, humans might get in and tinker with some and do things atop. Sometimes those people just like click send and you're like good to go. Sometimes it's like humans still spend a ton of time, but it gives you a starting point. But I think we'll expect continuously a lot of that. And like some of that will be I built this content and then I'm using AI to rebuild all that content for WhatsApp because I asked you there, like retaking the content that was great for the email, and I'm sticking it on the website on a customized landing page for like Spook's customers. So there's a lot of different things that will happen, but it's gonna be a partnership.

SPEAKER_01 29:50

Question with that, and I just want to try this one out if you're not comfortable with it. Loyalty, you're gonna do a loyalty app, you're gonna get into loyalty. It's right. Come on, you've got to do something.

SPEAKER_00 29:58

You know, I we've always believed like the best product should win. So it's why like you can run a different SMS provider on Cleveland, you can provide run different purviews, like we always make it possible to plug things in. You know, loyalty is one that we've talked about a ton over the years. There's a bunch of providers out there. The process of loyalty programs is, you know, there's a human element of how you design the program. You know, if we think about like small L loyalty, like how do you drive customer loyalty? That is like literally a big use of Clavio today. It's like you're trying to build more loyal customer relationships. Now, if we talk big L loyalty, like much more of that, like loyalty program, like loyalty software, more of that is about points programs and points management and like just a specific slice of loyalty. So will we work on small L loyalty? Yes. Will our platform be used for that a ton? Yes. Are we likely to launch a uh loyalty product? I think at the moment, we think there's a bunch of providers that do good jobs. We can plug into them, they're building a top clavio. It's not something that we spend a lot of time on at the moment.

SPEAKER_01 30:55

Crushing my dreams here, Ed. What this vision for loyalty? Let's be able to do that. No, I'm excited to do this.

SPEAKER_00 31:01

I mean, I think look, like we got a lot going on. Like, I think but like uh cool. Service is incredibly excited about service. We're incredibly excited by composer, you know, and we're incredibly excited about all the new brands all over the world that are on Cleveland and so you know, those really remain big focus. When you're doing one-on-one loyalty, like just think about this.

SPEAKER_01 31:19

No tears. We get rid of tears. Tears are gone, and we're talking about little milestones based on that customer profile. Like, what do we try and get them to do? Are they kind of value shoppers? Are they discount shoppers? What's the next little area that we want to push them into? What's the behavior we want to reward? And everyone's loyalty might look different. So it's true, not surprise and delight, but really rewarding you as a type of shopper that you've got to do.

SPEAKER_00 31:42

But I mean, I think this is when we think about what we call, yeah, like smaller loyalty. Like that's what we think about with Composer, right? It's like when you think about building a personalized journey, it's not like what's next for the average person. It's like, yeah, what's next for you? Like, what's the next thing we think you should do? And like exactly the content or the discount or how that manifests. Like those are all things that I think fit very well within the scope of how we think about where we think Clavio should be delivering.

SPEAKER_01 32:05

Being deep in the product, what do you think is a feature that most of your customers aren't using enough? Like, what's the hidden gem in Clavia that you're like, guys, have you just can't even use this? It's gold.

SPEAKER_00 32:19

Yeah, of course, it's hard not to, you know, obviously, there's like a bunch of stuff like I could not be more excited than I am about the composer and like besides of like creation, but also like analyze all the flows that are working, not working. I think we keep seeing that for the average brand, there is still a big unlock in more flows, more personalized flows, like just you know, there's there's more opportunity to reach out to customers in like closer to one-to-one ways. And so it's like not a super exciting one, but like flows continue to be where there's like on there's missed potential K B for a brand. So those are super excited about this new social stuff. I think we see people underoptimizing. I think we're your brands will see going forward. You know, we've seen that when we've launched service, like, you know, initially in some ways thought of this as like there's marketing, there's service, those things are the same relationship, but they're somewhat distinct. I think we've seen more and more actually, as you think of those as like one through line through everything, you actually can drive a lot of new revenue too in those conversations, you know, as soon as you're talking to customers and what would have thought been thought of as the service relationship. And so I think that's another one where I think we're just expecting more consolidation over time and more people thinking about like, oh yeah, I have an agent that's talking to consumers and that's very good at like saying or knows that you've bought X, Y, and Z, but you haven't bought Y, and you'd like you're likely to like like that product a lot. So I think I think we'll see an intersection there too of like people trying to use both those. So I think a long way of saying more flows, I think we'll we need to make that easier. Composer will do that, more integration between just like the full customer journey, and we also need to make that easier.

SPEAKER_01 33:48

And in terms of the flows, is your train of thought the less flows and the simpler flows done well is better than a really complicated trying to get closer to that one-on-one version for a customer, but can get very complicated and complex. Which direction would you go?

SPEAKER_00 34:03

Uh probably more towards the latter, but I think there's a real caveat that the world we live in now, complexity is hard to manage. Yeah. And you have to invest the time to create the flows, you have to make sure they're working, you have to make the content for them. It's our job to make those as easy as possible. I think, you know, one-to-one is complex. Like all of a sudden there's a lot more going on there. And you need the brand control and you need to make sure that your people are getting what you want. But that is, I think we've all experienced it. Like that is actually how consumers ultimately want this to work is they want it to be treated like humans. They want that to feel very personal. That does mean complexity for the brand, but I think we're more able to get there with AI, but also just like when I think to talk about more flows, that complexity is typically valuable both for the consumer, it's value ultimately as well as like generating KV as well. Yeah.

Australian Brands Future And 1% Done

SPEAKER_01 34:50

Well, that's an unfair question. Yeah. Considering that you're on our home turf. Who are the Australian brands using Clavio really well? Who do you put up there?

SPEAKER_00 34:57

Oh, I mean, I think uh there's a lot of great, great brands that we see, you know, throughout Australia. And so, you know, like last night we spent a bunch of time at NCU's like a fun uh local brand where we got to spend time of things we're doing. Budgie Smuggler has been a long time customer doing some very cool stuff. I was just chatting to Doug at at Incredible. Oh, yeah. He had a great night. Yeah. It's very cool. So I mean, I think the cool thing, we see that you know, Australian brands are willing, they like get this idea of building strong customer relationships. They're very willing to like try new things and do that. So there's a lot of customers just excited about, you know, just like kind of like willing to like embrace the challenge and we're a great test market. We'll always put our hand up to all the crazy ideas. We'd love it. We can definitely write. I mean, that's how we are. So we're relate.

SPEAKER_01 35:37

Last question for you, Ed. You famously said a fair few times we're 1% done. Yeah. And I love that saying 1% done. If you think forward the next five years with your strategy hat on where is Clasio in five years' time.

SPEAKER_00 35:52

Yeah. I mean, I think the boring thing is like we'll in some ways we'll just be doing the exact same thing, which is like in 2012, we built this data platform. We said, if you let that platform do things and drive outcomes, that's really valuable. And we picked, we picked first marketing, then we picked e-commerce. And that was the initial use case of this platform. So in five years' time, there's a bunch of things that are gonna be different. It's probably, you know, less and less just e-commerce. It's less and less just certain sizes of people, it's more and more big brands. It's more and more global in a bunch of ways. The users of the software are more and more gonna be not just humans, but a ton of AI. So there's all these different things that will change. But the basic idea of like, look, it's very important to have customer understanding, take action on that customer understanding, and then to understand if customers actually, if they're having a good experience, like if they have to actually see if it's working, that is kind of very unlikely to change. And so I think we'll be talking about the same thing. So, like, people want to be treated like humans. How can we treat them like humans? The tool set will be different, but the platform idea and that customer understanding will not be different.

SPEAKER_01 36:53

Well, hopefully we're still humans on podcasts in that.

SPEAKER_00 36:56

I'm confident. I'm uh not sure we'll still be in the same room, but I'd it'd be great. But I look forward to K Sid 20 2031. Holy moly. Ed, thank you so much for joining us on Ed Decart. Thanks a ton for having me. Super fun.

Takeaways Review Newsletter Community

SPEAKER_01 37:10

What an absolute pleasure to sit down with Ed. Never in my wildest dreams of when I started at Descartes did I imagine that I'd be sitting down with the founders of the platforms that we use every day and that are leading the way in e-commerce. I love getting this kind of access for you. All right, there were three key lessons that I wanted to pull out for you out of that conversation. Number one, your disengaged list is not a problem to delete, it's a segment to talk to differently. Ed's point about one-to-one flows is that the journey for a disengaged customer is not dead, it's just different. We have a guest coming up in a couple of weeks who runs one of Australia's best-known fashion brands. And her best performing end goes to the customers who look like they've gone completely cold. It blew my mind. So before you slash your database to save on those Clavio costs, figure out how to reactivate those people, not how to remove them. That's not a task pitch for Clavio. That's actually one of your best performing flows. Secondly, if you are not pulling your platforms together through AI integrations, you are not getting full value out of the tools that you're already paying for. The world has changed. We're no longer paying just for the tool, we're paying for the integration. Ed talked about MTP, but the broader point stands regardless of how you connect things. The data that you have spread across your whole stack is worth a lot more when it talks to each other. Clavio is one of those tech companies that is making that easier. Shopify did the same. The brands already doing it are driving more attributed value, not less. They're getting great insights, they're getting great interactions between their platforms. If you have been putting off the integration work, and let's be honest, most of the time it's a 30-second connection, it's a nice to go do it now. Go get that value. Thirdly, go build more flows. I know it's not a thrilling tip, and we've all heard this before, but Ed said it very plainly. The biggest untapped opportunity for most brands on Clavio right now is flows. More of them, more personalized, closer to one-on-one. Composer is one of those features that makes it easier, but you do not have to wait for it to start. There's so much money in those flows. So a big thank you to our partners at Clavio and to Shopify for making Add to Card possible. These conversations happen because of them, and we really, really appreciate their support for bringing to you. If you enjoyed today's episode, please leave a review wherever you listen. I mean the good, the bad. Actually, try not to do the bad. We want people tuning in. It really does help us more than you know. And if you want to be part of a community where you can discuss episodes like this, come and join us in the Ad to Cart community over on ad to cart.com.au. Alright, I'll see you next time where I bring you the second of our three live episodes that we've recorded at KT. See you then.