Last week, as part of AppSumo’s free remote work academy, Chris Schelzi sat down with John Peterson, CEO of The Nudge, to talk about SMS as a customer retention channel, John’s hyper-unique approach to marketing, and why all good B2C messaging boils down to knowing your customer—and maintaining trust.

Let’s dive in.

Customer-Centric Messaging During Coronavirus

First off: What is The Nudge?

Imagine a planner friend in your pocket—an SMS-based program that texts you 3 detailed plans and adventures every week. John founded The Nudge in 2018. It is currently available in San Francisco, Seattle, NYC, and Austin.

Why they chose SMS as a marketing channel 

At first, John’s team had planned to create a platform much like a social network, but John’s sister (the go-to planner for her friend group) suggested something much more simple: What if The Nudge did all the work to think of ideas, take care of planning, and text you just one actionable activity—exactly like “the planner friend” in your group does?

In the beginning, John’s team tested every channel: email, integrated calendars, Slackbot, FB messenger bot, push notifications—but text took off 10x in terms of engagement. 

Retention strategies

“Interrupting people’s routines is really really hard. I think retention is hard, and for most businesses, it’s the hardest thing to create and maintain. People go about retention in a couple of ways:

1. Pull mechanism: You’re trying to cause people to constantly think about what you’re doing. Instagram is the ultimate example of this: there’s a habit loop they’ve created that induces people to scroll.
2. Push mechanism: You’re trying to interrupt someone by sending them emails or push notifications. 

“We knew we never wanted to go the pull route because The Nudge is all about going offline, so the feed that everyone is addicted to wasn’t for us. So the push route, for us, was where we needed to go.” 

But the problem was, as emails and push notifications had become so common, nudges seemed to get lost in the noise.

Even two years ago, John didn’t even know if it was possible (or even allowed) to text people. It may be common now, but John himself had never been texted by a company before he launched The Nudge. But as a push mechanism today, text gets people’s attention far more easily than other channels.

The Nudge’s approach to audience segmentation

When they started, The Nudge team made the assumption that they needed to segment people. But as feedback started coming in, they realized that people didn’t like being pigeon-holed by a particular set of pre-defined interests. Nudgers were actually far more open to receiving a wide range of activities—and really wanted to get the same activities their friends were getting. 

John put it like this: “For us, personalization was a tradeoff against community. Text is a personified medium. People aren’t really used to companies texting them. People don’t really want companies texting them. So that’s something we really thought about when we made that transition. 

“For us, personalization was a tradeoff against community.”

“You can’t just take what you were going to send via email and send it via text. Because an email newsletter via text is NOT a thing. Text-based communication is really common, but something I’ve noticed that a lot of companies do wrong is simply shortening an email and sending it via text.”

John notes that text is not that kind of medium. Text is a medium for friends and coworkers. The way people communicate via text is totally different. So their team had to change the way they communicated to try really hard to feel like a friend, not a newsletter.

“One thing we learned early on, if you want to text people, trust is built through mutual understanding. We had to prove that we understand you by talking to you in ways that show we understand your life, and you understand us and how we operate. Text is just so different. Trust is so important or people unsubscribe so easily.”

Building trust through customer-centric content 

Again, it all starts with trust. “If you want to build trust by demonstrating that you understand your members, you have to prove that you get what’s going on in their world. So with The Nudge, if I’m chatting with a friend, they’re making references to things that are going on in my life. They understand the kinds of things that I’m into or not into. They understand the weather. With The Nudge, we had to ask: How can we demonstrate that with people?” 

Instead of a content calendar, The Nudge city directors have a customer calendar that they call a point of view (POV) calendar. City directors use this to see what is going on in the heads of their members today—but also throughout the next month. John said the idea is that they’re “creating a map of where people are at.” 

Tips for marketers trying to communicate during a crisis

For example, during coronavirus, you have to put yourself in your customer’s shoes, John added. “People are starting to go stir crazy. Some people might be settling into a nice little home routine. Or they may be having mental health issues related to what’s going on. There’s a lot of misinformation out there and it’s frustrating. They’re checking the news too often. They’re like, ‘It’s 90 degrees in Austin but I can’t go to the water right now—or maybe I can, I don’t know?’ 

“So that’s the starting point for us. For every day in the next couple of weeks, here’s what I think people need.” This allows The Nudge editors to not only send relevant ideas to their members but also talk about them in ways that build trust. 

John said, “We’re sending you this thing because you’re going stir crazy. So when we text them, we mention the first part too: the first sentence of every text is usually about you. It’s like ‘Hey, you’re going stir-crazy right now, so we created this thing as a solution for you.’ So that’s end-to-end how that works.”

How to improve those annoying corporate COVID-19 emails

“Start by trying to build trust—at this moment when trust is so important and so easy to backfire or to come across as out of touch. My marketing would start by talking about YOU, not talking about ME. For 90% of the ‘here’s what we’re doing about Covid-19’ emails I get, I don’t care.” 

John noted that people know when your company has nothing to do with coronavirus, so it comes across as just taking advantage of the moment. “It’s not working because you’re talking about you. If I were trying to sell a clothing line, I would start with the customer first: I would think a lot about who they are, and what’s going on in their head. I would ask them directly if I didn’t know. 

“Maybe the answer for my clothing line is that my customers aren’t thinking about buying clothes right now. They’re thinking about how long they’re going to be stuck at home. They don’t know what to do this weekend. Maybe their friend is sick and they’re scared. And so I would start with that.” 

“I start by talking about YOU and don’t push it too hard. And I leave the door open to the reality that you might just not care about what I’m trying to sell right now. But paradoxically that might convert more than being pushy.”

But what about the product?

It’s difficult to start there and then find a way to pitch the product or service you’re offering. John added, “Maybe the way I think about my product needs to change. So maybe you’re like ‘Look, you’re probably not thinking about clothes right now. You’re probably stressed about all this other stuff. We get that. But we do have this new clothing line, so if you do care, fill out this form and we’ll remind you about it in two weeks.’ Or ‘If you do need a distraction right now—to go back to the days when all of us cared about clothes—this option is for you.’ 

“I start by talking about YOU and don’t push it too hard. And I leave the door open to the reality that you might just not care about what I’m trying to sell right now. But paradoxically that might convert more than being pushy.”

How to write for SMS-based communication

As a principles- and process-oriented company, The Nudge has a kind of bible where they define how they write copy and create their POV calendars. One principle their team has added is asking, “Does this sound like a marketing email?” Would a friend say this thing or does it sound like a marketing email? If it sounds like marketing-speak, it’s out.

John added, “People have a lot of creativity, and a marketing email is a canvas to display that. There aren’t a lot of rules in email–you’re just trying to be unique and get someone’s attention. But that can actually backfire via text.”

For The Nudge’s text about how they were pivoting to respond to coronavirus, they spent hours fine-tuning their message and getting feedback from people. John added, “There’s a famous presidential quote about this, something like: ‘If I had an hour to talk, I could be ready in 10 minutes. But I only have 5 minutes to give this speech, so I need 5 hours to prepare.’ It takes so much more time to be concise. It’s harder for sure and takes more time. It’s also a good nudge for us to keep our thinking really simple and keep our storytelling really simple.”

Viewing each text as a story about their customer

“We do view each text as a small story about YOU. So the first part is setting the stage (“here’s what’s going on in your life”). The second part is the challenge you’re encountering, and the third part is our solution to that (“overcoming it”).” You can maybe say this is like distilling the Hero’s Journey down into the smallest possible components.” 

1. Meeting the customer where they’re at 
2. Addressing the problem they’re running into 
3. Offering them a detailed solution 

One rule John’s team has in their bible is no googling. “This is a useful rule for us. If we’re texting you about a hike, we don’t want you to have to google which trail to go on, or whether parking is open, or how much an Uber will cost. It’s about removing barriers for people. People don’t just see a text about a hike, go out, and get in their car. There’s a threshold of confidence that people need to follow through on an action. So we want to hit that 100% so there are no barriers for people.”

“Start by thinking only about your customer. Just put aside whatever you’re trying to convert for a second. And think about your customer in detail.” 

Referral program

“We have a relatively common structure to our referral program: if you get people to sign up with your code, you essentially get a point. So once you reach certain points in that structure you get different rewards. Early on there are digital rewards like an exclusive plan for a hike in Austin, a traditional sticker sheet, or if you get 20 referrals, we create a custom plan FOR you. It’s been really effective. 

“Currently half of our total growth is coming from direct attribution to this formal referral program.” But it wasn’t like that when they first launched it, John said. “We do a lot of feedback gathering and we’ve found that most people don’t really care about the rewards, they shared it because they like The Nudge. So our referral program is more like just giving people the envelope to pass it on to their friends with.” 

Is text catching on as a marketing channel?

John: “It’s catching on. There are a lot of new text-based services are popping up all the time. People are using it in a lot of different ways.” 

But for John, the question is more about how Apple and Google respond to text as a growing marketing channel. He said, “Do they want to navigate text to become like email where all of a sudden they’re empowering people to create folders in their texts—a promotions tab and another tab? I don’t think they’ll do that. I think instead they’ll clamp down on it and make it really easy for people to unsubscribe from text messages. Which is actually what I want. I think it should stay that way where the bar is really really high so that it doesn’t become oversaturated.” 

Should I use SMS as a marketing channel?

We’ll close with John’s thoughts:

“SMS? Everyone should try it: the engagement rate has the potential to be 10x what you’re doing via email—or even higher than that if you’re comparing the click rate. However, it’s not easy. It takes a lot of work to get it right. You have to have a lot in place to prove that people should trust you already. You do have to think about the context and telling the story a little differently, to focus on where people are at. 

“If I was launching another business and I needed a marketing channel to get people to pay attention, I would try text. The challenge of getting it right isn’t easy but it’s worth trying for sure.”

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