Mitigating churn can mean the difference between a viable business and insolvency. For owners of small e-commerce subscription box businesses, customer retention presents two key challenges. The first is the enormous amount of time needed each day to respond to every customer query. But it’s the second challenge that is most crucial to solve: often, retailers don’t learn that a subscriber was unhappy with their service until after they cancel.
Platforms such as Shopify have enabled thousands of individuals to launch subscription-based e-commerce businesses. While Shopify takes care of the commerce side, owners must focus on customer loyalty. Delivering a service that subscribers love requires a delicate balance of maintaining a sense of novelty each month, seeking out new customers, and serving existing subscribers.
In early 2020, software agency AE Studio launched ElectricSMS, a subscription management platform, to help e-commerce companies build loyalty among customers. They chose SMS for customer communications because of the technology’s high engagement rates, easy integration, and the ability to function without passwords. Based on these features, the team behind ElectricSMS built an automated platform that uses text messaging to help retailers improve their communication with subscribers, reduce churn, and increase monthly recurring revenue.
Today, ElectricSMS operates independently from AE Studio and has seen a remarkable impact on its customers’ businesses. The story of ElectricSMS’s development is just as noteworthy. By building on Heroku’s managed platform and integrating with both Shopify and the Twilio SMS API, the ElectricSMS team was able to create their first MVP over one weekend, and then flesh out the product for commercial release within just a few weeks of work.
Heroku made it super fast to launch our MVP because the platform took care of all our underlying infrastructure operations, letting us focus on solving customer problems. Wesley Magness, Founder, ElectricSMS
AE Studio aims to create better technology for humans
Over the course of history, technology has broadly improved people’s lives. However, there are times when users’ motivations and needs are at odds with those of the people funding the technology. That tension can lead to software that seems to work against its users.
The team at AE Studio envision a world where technology puts humans first, rather than frustrating them in favor of short-term gain. Drawing on the concept of human agency, AE Studio works with clients to create sustainable technology that helps people achieve their goals with the least amount of friction. They believe that if a piece of technology works in service of its users, then it will naturally increase business for the technology provider. ElectricSMS is a perfect example of this philosophy in action.
Transparent communication increases customer loyalty
AE Studio saw an opportunity to build a human-centric solution when working with one of their clients, a vitamin supplement subscription service. The company’s owner frequently worked into the early hours of the morning to respond to customer service requests, many of which were variations on a standard set of questions. AE discovered that by building an automation tool, the owner could save hours of valuable time each day. The agency ran with the idea and ElectricSMS was born. In line with the guiding principle of human agency, the subscription management platform adds greater transparency and control for both business owners and customers.
ElectricSMS offers subscribers a simple way to communicate with the business and manage subscriptions. Business owners can more easily handle standard customer queries by automating front line customer service workflows. For example, in the days before a package is due for dispatch, ElectricSMS messages the subscriber to confirm what they’ll receive, when it should arrive, and how much they will pay. Business owners report that this has led to reduced churn as it offers subscribers a hassle-free opportunity to change their package or skip for a month, rather than canceling through frustration or boredom.
Fast product iteration in response to market needs
When the ElectricSMS team began development, they chose to build their new app on Heroku. AE Studio had already built many products on Heroku, so they knew that the platform provided an ideal deployment environment for rapid product iteration and future scale.
ElectricSMS runs as a monolithic Ruby on Rails application on Heroku, backed by Heroku Postgres and using Heroku Redis for caching. While the service still relies on support from AE Studio, it has just one person taking care of development and DevOps. Freed from having to consider server orchestration, software updates, and platform security, that one developer can focus entirely on tuning the ElectricSMS platform to customer needs.
Similarly, Heroku’s scaling model reduces the forward planning necessary to onboard new customers and deal with spikes in demand. Adding more dynos or increasing the Heroku Postgres database size is a simple matter of adjusting a slider in the admin interface.
Heroku is more than a cloud platform. It’s an integral part of our business, scaling when we need it, and taking care of DevOps so we can focus on customers. Wesley Magness, Founder, ElectricSMS
Integrating Shopify with a Heroku app
Heroku’s flexibility enables ElectricSMS to integrate several essential third-party platforms. One of the most important is Shopify, whose API provides two key services to the ElectricSMS app.
The first service draws data from the Shopify store, such as product catalog and customer contact details, to populate the text messages that ElectricSMS exchanges with subscribers. The ElectricSMS Rails app stores the Shopify data, as well as all customer conversations, in Heroku Postgres. This not only provides business owners with a growing picture of their customers, but it also creates a pool of data for broader analytics purposes. AE Studio’s data scientists mine data from anonymized customer queries to improve the product’s natural language processing. Over time, that improved understanding will enable ElectricSMS to handle more customer queries automatically.
The Shopify API also enables business owners to manage their ElectricSMS service through a dedicated portion of their Shopify administration interface. They can conveniently use the same Shopify dashboard to monitor ongoing customer interactions and tailor the content used in text messages.
From Heroku app to mobile phones via Twilio
Heroku’s flexibility also came into play when integrating SMS technology into the ElectricSMS platform. The team chose to use the Twilio Programmable SMS API to take care of text message transport. The ElectricSMS Rails app running on Heroku uses Twilio’s Ruby SDK to send text messages for transmission and to receive messages inbound from customers. Both sides of each conversation are stored in Heroku Postgres.
As SMS is available to almost everyone, and it is delivered through devices that people secure themselves, the technology offers a lightweight form of authentication. According to ElectricSMS’s own figures, people are thirteen times more likely to respond to a text message than to an email.
Integrating with third-party APIs, such as Twilio or Shopify, is critical to the success of our product. Heroku’s flexible platform makes such integrations seamless. Wesley Magness, Founder, ElectricSMS
Bringing the future of ElectricSMS to market on Heroku
ElectricSMS also integrates other third-party services, such Zendesk, to round out their offering. As the business grows, the next major area of development will be to build functionality from the ground up, such as its own real-time messaging platform. As in the early days of the product, Heroku will enable the team to quickly iterate, build new integrations where needed, and deliver new human-centric features to market that help subscribers and business owners achieve their goals.
Inside ElectricSMS on Heroku
Listen to the Code[ish] podcast featuring Wesley Magness and Melanie Plaza: “Incubating a Startup.”
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