The Pennock Knockdown EP 24 | The Future of Shopping: One Text at a Time with Jonathan Fudem of OneText
Watch or Listen to Episode 24 of The Pennock Knockdown.
On Apple, Spotify and YouTube.
Welcome to another insightful interview from The Pennock Knockdown, where we unpack key strategies and tactics for digital marketing leaders. In this episode, we had the pleasure of speaking with Jonathan Fudem, founder and CEO of OneText. Jonathan and his co-founder, Daniel Bryan, are shaking up the world of shopping and payments, building what Nikki Lindgren aptly calls "the new PayPal mafia."
Their mission? To make every purchase as effortless as paying with your hotel room number. With a vision backed by heavyweights like Y Combinator and the founders of Warby Parker, Allbirds, and Harry's, OneText is driving incremental sales for top brands like Raycon, Cannon Lane, and Fireball.
Beyond SMS Marketing: A Payment Company's Vision
Jonathan clarifies a common misconception right away: "We think of ourselves as a payment company that has an SMS marketing function." Their goal isn't just to enhance SMS campaigns, but to fundamentally transform the online shopping experience.
He uses the compelling metaphor of a hotel room number: "I truly believe that is the most magical experience in buying that exists." This isn't just about convenience; it's about a seamless, shared payment infrastructure where different brands collaborate to create a delightful experience, leading to increased spending.
For OneText, the phone number is the ultimate identifier. It's universally memorized and capable of communication, making it the ideal foundation for effortless payments. The marketing and messaging flow naturally from this "card on file" concept, layered with conventional and proprietary SMS tactics to deliver incremental sales and conversions.
The Aha Moment: Inverting the Payment Paradigm
Jonathan’s "aha moment" came while working on mobile payment experiences at PayPal. He observed the complexities of app-based payments and the rise of one-click checkout solutions (like Bolt and Fast) that, while innovative in UX, struggled with go-to-market strategies.
The breakthrough? To "approach payments backwards." Instead of demanding prime real estate on a brand's checkout page, OneText focuses on the 80% of users who don't complete their orders. "We're going to find your worst customers and turn them into your best customers," Jonathan explains. By engaging these abandoned carts via text, OneText builds a payment network that can eventually recognize users even before they reach the checkout page, offering a superior experience.
Proving Incremental Performance: The OneText Difference
So, what convinces store owners to embrace OneText? The answer is simple: proven incremental performance.
OneText utilizes native A/B testing – a rarity in the texting space – allowing brands to rigorously test various messages, delays, and even the presence or absence of a message itself. This cohort-based model generates robust head-to-head data that demonstrates genuine lift in revenue.
Beyond data, OneText offers flexible integration. They can act as a secondary SMS provider, handling specific flows like post-purchase communications or even a unique direct mail program. This allows brands to "see the OneText difference" and build confidence before fully scaling up. As Jonathan puts it, their "amazing customers, amazing referrals" are their best sales team.
From Direct Mail to Data: Innovative Applications
Speaking of direct mail, OneText is exploring fascinating new avenues. To facilitate "text-to-buy," they built a robust platform for creating on-demand carts that last for 90 days (unlike Shopify's 14-day cookie-based carts). This technology enables them to create personalized mailers:
"If you scan that QR code, two things happen. One, you're immediately consenting to SMS... and then two, we can send you your cart back."
This innovation showcases their commitment to leveraging technology for highly personalized, high-converting experiences, even in traditional channels.
Jonathan also sheds light on the cookie-less future. OneText operates with the assumption that cookies don't exist, building its own internal model of shopper intent by pulling data from various brand sources (payment processors, Shopify, email providers, etc.). This first-party data approach ensures seamless experiences and offers a significant advantage, especially for carts abandoned within meta app views where traditional cookie-based recovery often fails. A staggering 80% of OneText's volume comes from abandoned carts, not completed checkouts, highlighting the immense opportunity in this often-overlooked segment.
Marketing Insights from the Front Lines: What Works (and What Doesn't)
Jonathan shared some compelling findings from OneText's A/B testing:
The Emoji Myth: "Emoji, from what we can tell, add no value in text message marketing space... They are, if anything, actually negative in texting." Due to how SMS encoding works, emojis are extremely expensive and typically don't improve conversion. His advice? "Assume emoji are bad unless you can show a test that shows otherwise."
The Power of the Nudge: Asking open-ended questions and then telling the shopper how to reply yields powerful results. An extra message nudging users ("Can I make a recommendation for you? Here are some of our top choices, A, B, and C.") not only increases link clicks but also prompts actual replies, leading to higher conversions.
Shipping Costs are King: Shoppers have an "extraordinary and sometimes irrational" focus on shipping costs. If possible, build shipping into your prices or offer clear, easy ways to achieve free shipping (e.g., through promotional product add-ons). Eliminating perceived add-on costs significantly boosts conversion, especially for first-time shoppers.
The Future is Shopper Specificity
Looking ahead to 2025 and beyond, Jonathan is most excited about shopper specificity. The trend is moving away from sending the same message to everyone towards highly personalized communication.
"We want to send the best possible message to Nikki and then the best possible message to Sam and Jacob... every single message sent are shopper specific, personalized and controlled, but not written by someone on the brand side."
Imagine a moisturizer customer receiving a message highlighting moisturizers even in a site-wide sale, while a clay mask customer sees a clay mask-forward message. This level of personalization, driven by AI and internal models, promises to deliver even greater value and relevance to consumers.
Jonathan's Advice: Take More Moonshots
As we wrapped up, Jonathan offered poignant advice for entrepreneurs:
Start Earlier: Don't wait.
Underrate the Risk of Not Taking a Risk: "People don't realize that if you just kind of stay where you are, that is actually a risky thing." Take strategic bets and set high targets.
Be Less Restrained: Don't keep the team smaller than needed or be overly cautious. "We need to be letting the floodgates go a little bit, doing more experiments, just being bigger at everything we can."
Jonathan's moonshot led to OneText, a company growing incremental lift on top-line revenue for brands. His insights underscore the power of innovation, personalized communication, and daring to disrupt the status quo in digital marketing.
To learn more about OneText and how they're building the future of shopping, visit onetext.com. Connect with Jonathan Fudem on Twitter (@JayFeudem) and LinkedIn.