90% of Marketers Don’t Understand Klaviyo

Most marketers think of Klaviyo as an email marketing tool. Maybe SMS. There’s a lot of competitors. Even their investor, Shopify, has their own email marketing tool.

But this ignores what they really are.

The Secret Sauce

Klaviyo is a data company. Yes, they use their data for marketing, but they are a data company. Their biggest asset is their customer data platform (CDP).

150,000 merchants use Klaviyo. 150,000 merchants share their customer and performance data with Klaviyo. Better audience segmentation. Better analytics. Better marketing conversions.

Which other company uses a lot of data to improve marketing conversions? 

Meta.

Meta Comparison

Meta ads are successful because they’re effective. When set up properly every dollar of ad spend generates multiples in sales. 

Meta has customer data from user accounts. Marketers install Meta pixels to share performance data.

Klaviyo receives merchants’ customer data to send messages and performance data to measure attributed revenue.

Do you see where this is going?

AI Optimization

AI existed before the latest wave of generative AI. One use case is optimization.

Based on customer and performance data, Meta’s AI optimizes delivery for the most conversions. 

The AI determines which ads to show which people at which time. Making ads more relevant. Meta also incorporates generative AI now for further personalization.

Klaviyo can, similarly, move towards optimized delivery.

Klaviyo AI

AI is a big priority for Klaviyo. Generative AI is already used to suggest email subject lines or craft flows. 

The next step is to build AI into their message delivery system. Klaviyo email delivery is where Meta ads delivery was years ago.

Meta ads delivery:

• Previously, marketers set detailed audience targeting based on parameters like interests and different campaigns for different stages of the marketing funnel

• Today, the AI has improved enough for marketers to set broad audience targeting and directly optimize for sales

Klaviyo email delivery:

• Today, marketers choose the audience, schedule the time, and write the content when sending an email. 

• In the future, marketers can write the email and then let AI choose who receives it and when. Every campaign could become a flow.

The Data

Meta ads are effective because they have massive amounts of user data. More data = Better AI. The big question is does Klaviyo have enough data?

A key part of Klaviyo’s ecosystem is 3rd party integrations. Integrations, like Toast, provide additional data that complements the merchant's data. Klaviyo has recently announced a new integration framework to encourage more to be built.

The other question is will Klaviyo centralize their data across merchants?

For example, a customer subscribes to a merchant A’s email list and merchant B’s email list with the same email address. If both merchants use Klaviyo, will Klaviyo connect this customer between merchants?

Doing so makes the customer data more rich for targeting since it provides a more holistic view of the customer and their interests.

As mentioned, AI is a big part of Klaviyo’s Q2 earnings call. Read more about what else Klaviyo said here.