Josh Durham has achieved some amazing success online. He’s also a survivor of an eCommerce crash and burn story that’s truly spectacular. He built an amazing brand from $0 to $10 million in just 3 short years and then lost it all in a matter of months.
After the dusting off the debris Josh joined my buddy Peter Goodwin as the head of growth for Groove Life and helped add $10million in top line sales (with good margin) in about a year and a half.
In this episode we dive into valuable lessons from rapid growth and rapid failure. Here’s a look at what we cover.
- Law of Quarters - and how it should help you think about margins, product pricing, and operations.
- How failing to introduce successful 2nd, 3rd, and 4th products can spell death to a brand.
- How to structure a successful Ambassador program that will become a new content engine for you.
- Tips for building a real community around your brand.
- Knowing your numbers and your MER (Media Efficiency Ratio).
- How to generate an unending supply of amazing User Generated Content.
- Plus more!
Mentioned in This Episode:
Josh Durham
Aligned Growth Management Newsletter
“The 4-Hour Workweek” by Tim Ferriss
“Rich Dad Poor Dad” by Robert Kiyosaki
QALO
Enso
Enquire Post Purchase Survey Shopify App
Transcript:
Brett:
Well, I'm absolutely thrilled to be talking to Josh Durham today. And this is going to be a how I did it, how I'm doing it story. Merchant success story. Also agency success story. And this was really, really fascinating because Josh has just a very unique experience in a pretty short period of time. But he was the founder and CEO of Weighted Comforts, a weighted blanket company that he's really started from zero and built to $6 million a year in revenue and then it imploded. So we're going to hear that story. Lots of lessons from the good and the bad of that. He was then also the head of growth at Groove Life. Working with our mutual buddy, Peter Goodwin at Groove Life. Shout out to Peter. And so Josh helped Groove Life add 10 million to the top line in growth as he was the head of growth, which was an awesome experience. So we're going to unpack that a little bit. And then now he's running an agency called Aligned Growth Management. And we're going to unpack that just a little bit as well. So lots of good stuff to talk about. Can't wait. With that intro, Josh, welcome to the show and thanks for taking the time, man.
Josh:
Absolutely Brett. Thanks for having me.
Brett:
Yeah. So where are you hailing from? Where do you call home?
Josh:
I am from Nashville, Tennessee.
Brett:
One of my favorite cities, man. And it's a city that's just absolutely exploding. A lot of tech and eCommerce energy It seems in Nashville. So that's a pretty hot place to be right now.
Josh:
Absolutely. Always a fun new restaurant to be visiting. I also feel like I'm living in a war zone because there's just construction constantly around me. Like the house across the street from my house actually just got torn down and they're going to build three houses its place, but it's definitely a fun place to be for sure.
Brett:
It's crazy. Maybe not at the level of Austin. I just got back from a trip to Austin recently and all kinds of construction and mayhem going on there, but Nashville's really growing at a fast clip too, which is super interesting.
Brett:
Yeah man. So let's dive right in. So Weighted Comforts. Weighted blanket company. You grew it from nothing to six million, to implosion. Tell us a little bit about the ... What was the genesis of that? Why weighted blankets? Which by the way, there's probably not a worse thing to ship other than maybe gallons and gallons of water or something. But how did you get into the weighted blanket business?
Josh:
Yeah. Great question. I was going to say on the shipping side, one of my biggest accomplishments was we got it down to $12 per unit, even though the average blanket was 20 pounds. So that was quite the accomplishment.
Brett:
I guess they're not super bulky, but they are extremely heavy.
Josh:
So heavy. I know. That was probably one of the worst parts too is when you're getting started and you're shipping product yourself, you're going to throw out a disc in your back with all these blankets.
Brett:
Yeah. My wife uses the weighted blanket. I personally don't like them. But as I just try to move it, I always forget how heavy it is. I try to move it, I'm like, "Holy cow. What is this thing?" It's just always shocking how heavy it is.
Josh:
Yeah. You're like, "Someone's on top of me," when you're sleeping in the middle of the night. But yeah. So how I got into it was actually my mom. She was a marriage and family therapist and she was actually using these blankets for her most anxious clients. And so as soon as they would use this heavy blanket during a therapy session they would calm down immediately. And so she was like, "Oh, there must be something to this." And she was telling me about it. And of course I feel like if you're an entrepreneur, you've probably either read one of two books. You either read The Four Hour Work Week or you read Rich Dad, Poor Dad. And for me it was The Four Hour Work Week.
Josh:
And so I'd been looking for a product with high margins, high revenue per product, that kind of thing, and just thought that it was an amazing product. And so we started selling it on Facebook Marketplace. Touting the benefits of reducing anxiety, improving sleep. And one of the first posts that we put on this Facebook group we sold over $1,000 off of just one organic post. And so I just knew something was there. And so for that first year we just made everything custom and actually met customers at Jo-Ann's Fabric. Had them pick out their own fabric, their own custom weight, all those kind of things.
Brett:
Wait a minute. So you were generating leads. You would then schedule an appointment, go meet me at Jo-Ann's Fabric, and then you were making them custom for each person.
Josh:
Yep. Exactly. That's exactly how it started.
Brett:
Wow.
Josh:
Yeah.
Brett:
And then you realized that's probably pretty miserable or scalable at least.
Josh:
Yeah. Totally. So then I started to dink around with Shopify. Built out a Shopify store and just started trying to figure it out. And so something that we realized early on in that market was most of the brands were catering to children with autism or some kind of disorder. A sensory processing disorder, for example. And so we really saw that there was room in the market for adults with just general sleep ... Like a general sleep disorder or just general anxiety. And so we catered the brand. And so we started making the weight of each blanket a standard weight and a standard size instead of having it all custom. And that really enabled us to go into eCommerce and to scale quickly. And so for a while we were doing about $10,000 a month online once we started rolling. But it wasn't until I really figured out how to run Facebook ads, which I hired a coach in 2016, where we went immediately from 10K a month to about $50,000 a month.
Brett:
Facebook ads, that was the channel, that was the vehicle that really allowed you guys to hit scale.
Josh:
Yeah.
Brett:
Well, that combined with you've got standardized sizes and stuff where you're not making stuff at Joy-Ann's fabric. Yeah.
Josh:
Totally. Yeah. So that was actually ... Yeah. Facebook. That was really when Facebook video ads were just absolutely crushing. Like more of a long form type video. And so we were just getting super cheap cost per views, cost per clicks. But really a big part of that business too was employing the refugee community in Nashville. And so we actually discovered that through a program called Sew For Hope, which basically would teach refugee women how to sew to have a source of income for their family. But when they would graduate that program, they didn't have anywhere to go to. And so we started hiring all of their graduates out of that program and basically were able to-
Brett:
Large refugee population in Nashville?
Josh:
Yeah. Actually an extremely large population here. And so part of the benefit that we had with them was giving them a consistent source of income but also eventually when we got into our own physical space, we started doing paid English classes on site so that it would help them integrate culturally.
Brett:
That's amazing. I think that is a ... One, it's a noble to do. It's also a good business practice. I'm sure some of the ladies you hired were amazing workers and it worked out well. I know that led to some issues too. We'll talk about management of cogs and some of those things here as we go. But let's first talk about what were some of the things you guys just absolutely got right, right out of the gate? And then we'll talk about some of the failures in a minute.
Josh:
Yeah. For sure. The things that we got right I think were, like I said, honestly, standardizing the weight of each blanket. So standardizing the product. But also the demographic that we were going after. The brand was really for moms. Moms were the buyers. Whether they were buying for themselves or for other members of their family, that was our target market. And so we were really in the vein of Magnolia Farms, Joanna Gaines type looking brand with really natural light and photos and stuff like that that really had more of an aesthetic than if you were buying a blanket from another brand that might have minions on the fabric.
Josh:
It wasn't gimmicky like that. It was more for adults. More florals and pastels on the fabrics. And so I think that's the thing that we got right as well as just the channel. And so just going deeper and deeper into Facebook where eventually we were spending close to a quarter million a month on advertising fairly profitably. And so I think those were some of the big ones. But I think that ... Well, I don't want to get ahead of myself, but I think some of the things that we didn't get right was really evolving the product into what the brand should have become. It's like a product 2.0.
Brett:
Got it. Got it. But you did understand your target market pretty well. You nailed that product. And then you're really good at marketing, right? You dove deep into Facebook, you got great results there. So yeah. So let's talk about then what did you not do well? So product 2.0, talk about that. So you built this amazing hero product and you weren't able to extend the line or do kind of that next gen product.
Josh:
Yeah. One of the difficult parts about the weighted blanket was for one, most people only needed one blanket.
Brett:
Yeah.
Josh:
Right. So they're kind of one and done. So the repeat purchase rate was so low. I think it was almost at only nine or 10% repeat customer rate.
Brett:
So you're not thinking about LTV at that point. Return on ad spend for getting that first sale.
Josh:
Yeah. There's no LTV. It's just they spend $200 then they're gone.
Brett:
Just AOV. AOV is all that matters. That is-
Josh:
Yeah. Exactly right. And so the product that really helped drive sales primarily was our ... We had a weighted blanket that was made with Coolmax fabric. And so the benefit of that was that it was a heavy blanket but it wasn't hot because the fabric would wick away sweat and the fabric would breathe. But after that there was no secondary product. There was no pillows. We didn't really get into any kind of essential oil diffusers or sheets, that kind of thing. It was kind of a difficult business to be in. Are we a health and wellness company or are we more of a home goods company? Because really the main benefit that we were driving with the blanket was reducing your anxiety, improving your level of sleep. And so I think that's where we got caught is where we were really scaling one single product but we didn't add on to those lines to where it would make it easier to have a stronger structure of revenue coming in from other products.
Brett:
So you kind of struggled with, are we more of a bedding company? Do we need to have pillows and other betting related things or are we really an anxiety reduction, a stress reduction company? So why do you think you got hung up there? Was it just running in too many different directions or why were you not able to nail that identity?
Josh:
Yeah. Honestly, I think one of the things that I got caught up in for sure was just wanting to continue to scale without having to evolve the product. I was just a money hungry marketer that wanted to ... I'm all about keeping things super simple and just trying to go deeper in a few things and just continue to scale that core product because it was working. And we were-
Brett:
And you cracked the code on Facebook. Facebook ads were really working and that was the golden era of Facebook. And I think that is one thing that I'm curious if you agree. That is one thing that I think some startups don't really understand is that even if you nail that first product, customer acquisition costs are always going to go up. It's the nature of platforms. It's the nature of business. It's just your CAC costs, customer acquisition costs, are going to go up. So what are you doing to increase LTV, increase your average order value? How are you addressing those things? And it sounds like you maybe waited a little too long. You were loving the action on Facebook and just trying to press that lever rather than thinking about expanding.
Josh:
Yeah, exactly. I was putting my foot on the gas. And that was the golden year of Facebook ads for sure. I think we hit the perfect timing for that product as well.
Brett:
Yeah. Which is awesome. We'll talk about Groove Life in a minute, but they're a really shiny example of product extension. Peter's always wanted to be more of an adventure company. So silicone wedding rings. I forgot to wear mine today. But silicone wedding rings. But then as they pivoted and they've successfully ... Or not pivoted, but they've added to their product line belts. And I've got on my Groove Life belt right now.
Josh:
The Groove Belt.
Brett:
The best belt I've ever worn. It's kind of magnetic the way it clasps on the buckle and it flexes a little bit with you.
Josh:
Very addicting.
Brett:
Yeah. And that's their number two product and it's a huge part of their business, but it fits. It's accessories. It's for people that are active and engage in adventure and then they've added some other things as well. Wallets and some other stuff. It's been cool. So they nailed it. So I think that is something ... Any thoughts or advice you would give to a merchant? Like here's how you would approach product line extension now knowing what you know from successes and failures?
Josh:
Yeah, for sure. I think a lot of it is around just revenue growth. So I think that having that core product, getting that up to a half a million a year to a million dollars a year, I think that's a great threshold of that's where I would start thinking about your product 2.0. Of how you can add to that. Because you really need that core funnel or that core product to go sell on its own. And then adding on those secondary products of like, okay, what are these customers also going to purchase?
Josh:
Even the things that I learned at Groove Life was ... For example, the Apple watch bands. A lot of the customers that were buying the Apple watch bands weren't the same customers that were buying the silicone wedding rings. They were actually two very different customers.
Brett:
Interesting.
Josh:
The Apple watch band market from what we could tell was a lot more urban and maybe more concerned with health and fitness than the typical person that was wearing a silicone wedding ring. Because really Groove Life started out of this more blue collar outdoorsman market versus an urban health and wellness market. But once we added in the Groove Belt ... Everyone bought the Groove Belt from our customer list when we launched the Groove Belt. Whereas when we launched Apple watch bands, it really came onto like ... I don't know how you say that. Cold use? Not cold use but-
Brett:
New users, new shoppers, new ... Yeah. Yeah.
Josh:
Yeah. It didn't take off inside our email list, but it would do decently well on cold traffic. And so I think that's just something that you have to keep in mind too is how different products will connect with the type of customer that you're already trying to attract. And so, who's going to buy it after that core product and what kind of person is going to also buy from you versus Amazon? And so I think it's a lot more easier said than done, but it's definitely something that you have to figure out as a brand owner.
Brett:
Yeah. I love it. So let's talk about some of the key takeaways from the weighted blanket experience. So you talked with me as we were prepping a couple weeks ago. You were talking about how there's such a need to get granular with your costs and to know your numbers inside and out. What advice would you give to people and what kind of key takeaways do you have from that experience related to understanding the numbers in your business?
Josh:
Yeah, for sure. One of my favorite sayings is top line revenue is vanity, bottom line profit is sanity. And that's-
Brett:
It's fun to brag about those top line numbers when you're at events and masterminds and marketing conferences and stuff like that but does top line really matter?
Josh:
Yeah, exactly. I'm an EBIDTA man. I just think that it really matters about your bottom line profits in terms of how healthy your lifestyle is going to be for sure and if you're going to be able to sleep at night. But yeah, there's this framework that I like to use for most eCommerce brands whenever I'm analyzing a potential client to kind of look at ... Looking at their numbers. And it's what we just call the law of quarters. And so this was actually developed by Taylor Holiday largely and I gave him a lot of credit. I've learned a lot from him. But basically it's just you have four main costs in an eCommerce business. So let's say that your cost of goods sold is at 25%. So that would be one quarter of your cost in an eCommerce brand.
Josh:
And then another 25% of your cost in a total eCommerce brand would be your marketing cost. So that would be ... Say you're running at a four X ROAS. That would be 25% spend to revenue ratio so that would be another 25%. And then the third 25% would basically be your operational expenses. So that's your overhead, rent, maybe you also include shipping in that cost. And basically through that framework you're basically going to be ending up with 25% net profit at the end of the day. And so if any of those numbers are different for your business you can actually allocate a different percentage to each different bucket so that you can still end up with 25% net margin. So maybe you're actually able to cut back on your op ex expense and maybe you're able to allocate more budget to profit or maybe you have to allocate more budget to your marketing expense. Whereas that's probably the case for most brands. But that helps me and in some way be able to go into any eCommerce business and get a basic understanding of how the numbers play out for each brand.
Brett:
Yeah. I really like that. So quick recap, the law of quarters states 25% to cogs or cost of goods, 25% operation, 25% marketing, 25% net profit. Obviously it's going to flex or change a little bit depending on your business. But I think it is a great way to look at it and say, "Oh wow, my cogs are actually 55%. Whoa." That's a rough space to be in eCommerce because now you got no money for market. Either you're going to have to be bare bones on operations or you're going to have very little money for marketing and it's just not going to work. So if it moves a little bit, a few points in one of those categories, then you've got to be able to justify that adjustment to other categories as well.
Brett:
And one thing I'll point out here too is that when you're looking at 25% dedicated or allocated to marketing, it's not necessarily that it's a four X ROAS in platform. You're looking at more of a four X as far as MER. Media efficiency ratio. So total sales and total marketing dollars, you're looking at a four X there. Rather than sometimes your new customer acquisition cost is going to be higher than that. But looking at that total media efficiency ratio, four X in this case. So yeah. So were you not able to get to the law of quarters with your weighted blanket business?
Josh:
Yeah, exactly. So the thing that happened with that business was ... So in December, 2018, basically, we hadn't hit our sales goals like we had hoped. We actually hit ... In November we hit 800K that month. In December we also hit another 800K. But we had forecasted closer to 1.2 for each month. And that year we had actually tried going from two million to 10 million in one year.
Brett:
Five X to grow in a year. It's a lot.
Josh:
That's just a huge jump. Especially operationally. When you're bootstrapped, that makes it extremely, extremely difficult on cash flows. And your team in general. Especially as you're making that jump, you're probably going from a cash basis, accounting to accrual in that. So it just creates a lot of different confusion when you're making that jump. But anyways, we really over invested into inventory and then very quickly in 2019, we really started to see ROAS drop as more competitors came into the space. We went from tracking four competitors to over 30. And Target came out with their own weighted blanket and their cost was closer to $70 when ours was closer to 200. And so very quickly the numbers no longer made sense. Our op ex was probably 30% of revenue. All of a sudden our ROAS on Facebook was at ... It was at probably at like a three X blended. And so just the margin was starting to shrink very quickly. And so it just made things extremely, extremely difficult.
Brett:
Yeah. Totally makes sense. And so lots more we can unpack there, but in an interest of time, I want to transition to Groove Life. And we may circle back to weighted blankets as we go here a little bit. But let's talk about Groove Life. So you were the head of growth. You guys grew by $10 million in top line while you were there. I know the bottom line was healthy too. Talk about some of the key things you did to help Groove grow as the head of growth.
Josh:
Yeah, for sure. Obviously it wasn't all on me. Peter's a great marketer-
Brett:
Super smart.
Josh:
Himself to Groove Life. And Bryant was there.
Brett:
Yeah. Bryant Garvin, shout out.
Josh:
As well as the CMO. But yeah, one of the big things that really helped Groove grow ... I think outside of just marketing, I think we can talk about YouTube. I think that we can talk about a lot of the fun stuff that we were doing on TikTok and Facebook ads. But I think that one of the things that really helped Groove grow is what we were already talking about was just adding in these new product lines. Because really that was kind of like the new revenue growth. Because I think that we had really saturated the silicone ring market of people who were probably going to buy a silicone ring regardless. And I think that we were capturing a lot of the attention of that market already. And we had quickly taken over a large market share from KLO and Enzo as well was one of our other competitors. But really adding in the belt and really increasing the revenue share into the Apple watch bands, that was actually kind of a huge component that enabled us to grow.
Josh:
So that's how I like to think of things is really your marketing strategy starts from your product development. I think that's one thing that Peter's really great at is thinking from a marketing perspective when he's designing each and every single product. What are the benefits? What are the calls to action that we can make inside an ad that's going to make this click worthy, inside the timeline? Right?
Brett:
Yeah. It's kind of the way Amazon does it, just to give a quick insight there. They start with the customer and work backwards. When they're doing a new initiative or a new product designer rollout, they think about what would we put in the press release? That's what they think about from the very beginning, because that forces them to think one, what is worth talking about here and what will people want and who would want this? And so it sounds like that's something Peter's really good at is thinking about, "Okay, if we're going to build this belt, what are the points of differentiation going to be? What are we going to be able to say in our ads and why will people fall in love with this?" And that's key because sometimes I think people are just like, "Hey, this market's hot. Let's just make a belt. We can sell it." But really thinking about marketing from the beginning is really smart.
Josh:
Yeah, absolutely. I think one of the other things that was really cool that we were able to do was ... I don't know. Have you ever seen ... Have you gotten the ads from Athletic Greens where they're running all the different ads from different influencer pages? Also, it feels like Athletic Greens has just been absolutely destroying everyone on ads recently in the last couple months.
Brett:
I heard of Athletic Greens through the Tim Ferris podcast. I don't see their ads much. I'm not sure why they're not targeting me specifically. But yeah, I'm very familiar with them, but just not their ads.
Josh:
Oh, that's funny. I've been talking with a lot of people on Twitter about everyone seems like they're getting the Athletic Greens ads.
Brett:
I'll visit their site and then I'll see what their remarketing game is like.
Josh:
There you go. Yeah. Check it out. But anyways, my main point was just around their influencer strategy of white labeling influencers. Just the added trust that you get from influencer marketing. And so we leveraged a lot of that for the Groove Life account to where inside Facebook, I was actually running 20 different ad accounts on behalf of Groove from different influencer accounts. And also even some of our licensing partnerships, like Mossy Oak Camo, Realtree Camo, all those guys. We were actually running ads from those accounts and being able to leverage their remarketing audiences.
Brett:
Yeah. So super smart. So you were basically ... You had access to their Facebook manager account. Mossy Oak and/or some of the influencers. You were running ads with their content, pointing people back to Groove Life, but you were doing all the spend. How did you position that? Because it's a real win-win for you and for the influencer, for you and the partner brand. How did you position that as a win-win?
Josh:
Yeah, for sure. It's definitely a case by case basis. Sometimes in the licensing contract it might come with that as part of the deal to where we get access to their ad account and can run ads through their pages. In the case of a smaller influencer, sometimes they got a 5% rev share through any revenue attributed through the Facebook account. Other ones were just a one time fee for the year. So we would sign an MMA athlete or we would sign a bull riding athlete. And so that would just be a part of the added fee for the year. But yeah, we'd set all those up basically for them and really leverage all the creative and start to do some fun remarketing campaigns where at seven days this person would see this on a site visit or then they would see this next page. And it just seems like you're omnipresent once you go through the remarketing funnel, of everyone's talking about you.
Brett:
Yeah. It kind of feels like you're everywhere and that everybody ... Especially if someone happens to be following multiple influencers which does happen in a given space. Then you turn around and you're like, "Whoa, everybody that I trust and know is talking about Groove Life. This is huge. They're everywhere." Omnipresent.
Josh:
Right. Yeah. Some people, I think, think white labeling is a silver bullet. Which I don't know that it really is you're just going to do white labeling and it's automatically going to get you a huge ROAS. But what I do think that it can enable you to do is to get into new markets. And so if you sign someone in bull riding or if you sign someone that's more of a fitness athlete, it lets you leverage that person's audience and that person's likeness into a new market that you maybe never had access to before where just running ads from your brand page would kind of be offsetting or it might not make a lot of sense. But this gives you a stepping stone into a new market and gives you new volume that you hadn't had before.
Brett:
I love it. I love it. I want to talk ambassador programs in a minute and then talk about what your agency is doing. But before we do that, I know one of the things we talked about ... And I talked to Peter about this too. He and I hung out at an event in October so we were talking about this. But going beyond attributed ROAS. So going beyond the ROAS, return on ads spend, that you can see in platform. Can you talk about that a little bit? How are you guys thinking about that? Because I know you're still running Facebook ads for some clients and you're still very plugged into that as you're doing ambassador stuff, but how are you going beyond attributed ROAS?
Josh:
Yeah, that's a great question. So what we like to do is we looked at just your blended ROAS overall on the whole store. But you obviously have to pay attention to some level of in platform reporting. And so, one of the things that we've been doing has been A, well, we like to use a tool called Triple Whale, which I've shared with you previously.
Brett:
Yeah. I've met with those guys. Yeah. They're great.
Josh:
Yeah. Those guys are awesome. Max and AJ have done a great job building out the platform. But basically being able to see ... Basically with Triple Whale you're able to see your in platform reporting from Facebook, in platform reporting from Google, it brings in your Shopify revenue, Collegio revenue, all those fun things and gives you your site wide media efficiency ratio and your site wide ROAS. And so we love to look at that first and foremost. But another thing that we're doing-
Brett:
That's the real number right? You got to know how each platform and each campaign is performing. But there's going to be some cloudiness there and multi-touch attribution still isn't perfect. And you've got iOS 14.5 and later issues. But knowing that blended or MER number of total ROAS, that's the key number.
Josh:
Yeah, absolutely. That is the key number. And I think that a lot of people get caught up in the end platform reporting so they're not able to scale. And so one of the things I did last this last year in October was I took on a brand that was on a more of a profit share deal. And basically I installed a post-purchase survey where it was asking where'd you hear from us? It was actually from Inquire. Inquire Post-Purchase survey. It's an app on Shopify.
Brett:
Nice.
Josh:
It's really awesome. Check it out. But basically I installed that app and started getting almost 50% or 70% of people that were answering it were answering Facebook and Instagram. But really inside Facebook and Instagram, inside as manager I was getting a 1.0 ROAS. Maybe 1.2.
Brett:
... in platform, right?
Josh:
Yeah. I was getting really cheap cost per outbound clicks. And that was the cool thing is I was getting these really cheap clicks and so I doubled the budget immediately and all of a sudden my revenue doubled as well at a four or five X blended ROAS. And of course it was still-
Brett:
So your total ROAS was great. It's just the in platform it didn't look so rosy.
Josh:
Exactly. And so, we ended up quadrupling that store's revenue within three months, just because of that one change. And in platform, it looked like it sucked, but overall it was doing a four to five X ROAS after email marketing and all that fun stuff. And so I think that's definitely something to look at. Just kind of getting ... You have to have different touchpoints and understanding the whole marketing funnel, not just inside Facebook or inside Google.
Brett:
Yeah. And that's such good advice. And yeah, We hear really great things about Triple Whale. And I know Max so shout out to Max. They built a great tool. We also love Northbeam. Tool that we recommend to clients where it fits. But yeah, looking at how all of the platforms work together and then measuring your total ROAS is super important because ... We've seen this YouTube too. And we're more of a YouTube agency and we actually ... Our paths almost crossed. We helped Peter launch on YouTube and then ... Which the goal there is always we would launch it and then you guys would take it over and you did and did great.
Brett:
But we're seeing the same thing on YouTube as well where in platform you maybe seeing a 0.75 or a one ROAS, but you also notice that, yeah, but when we turn YouTube on Amazon sales go up and branded search and shopping go way up. They grow 300% in some cases. And so yeah, that's where you've got to look at the translation of what in platform numbers translate to the proper MER. That's the key. Not getting hung up on, I got to hit a four in platform, but I've got to hit a four total. What number in platform translates to that total number that I need to hit? So that's the real key. Yeah. Yeah.
Josh:
Absolutely.
Brett:
So talk about ambassador programs for just a little bit. What are you doing there now in your agency and maybe talk what you did at Groove as well. But what do those ambassador programs look like? Is that what you were just talking about where you take over people's ad accounts?
Josh:
Yeah, absolutely. So, yeah, I'm really stoked about ambassador programs mainly because last year, I think a lot of brand owners, when iOS 14, iOS 15 started to hit, really, they saw that drop in their in platform ROAS. Everyone was like, "Okay, what are the other ways I can make money on my eCom store without spending money on ads?" The answer for a lot of people was, "I want to start a community." But I haven't really seen anyone build out a community well for eCommerce brands. There's very few. You can kind of look at maybe PureVita or you can maybe look at MVMT watches or maybe Gymshark. More of these huge legacy ... Now legacy eCom unicorns.
Josh:
But I really want to set out to really build communities for eCom brands to do one of three things. The first is really driving organic traffic in sales through influencers. Just through influencers. And so that way you're getting the benefit of the organic audience, getting that organic traffic, which a lot of brands struggle with. But then number two is maybe the most important, which is getting the creative from those influencers and being able to leverage that across channels. And so by building an ambassador program, you're actually building out a well of creative to where it's getting refreshed every single month and you can refresh your ad account instead of running your same old static image ads that you're running from your product pages. You're getting something fresh and you're getting some more EGC style creative. And so my thesis is basically, what's going to perform better? The ad that two white guys thought of in a studio together trying to shoot on a backdrop or giving creators your product to help build a new piece of creative?
Brett:
Yeah. It's so good. Yeah. Do the best ideas or the best ads come from sitting around the boardroom so to speak and white boarding ideas and stuff? Maybe, but probably not. Probably your next breakthrough ad is going to come from an actual user, an actual customer, an actual influencer. And so we love this. And I know on the Facebook and Instagram side, you've got to be generating new content. It's very content hungry and that monthly refresh or even more often in some cases. We see the same thing on YouTube where we want to be testing regularly. We also find that creatives last a little longer on YouTube. So maybe it's more like a quarterly refresh, but you still want new, fresh creatives and you don't want to have to be the one racking your brain and coming up with new hooks and new product demos and new appeals to get someone to take action. Let your users, let influencers do that. So that's what you're doing here. So any tips or suggestions? How does one go about building an ambassador program? Other than calling Josh, which I would recommend doing that too. But how can you build an ambassador program? What does that look like?
Josh:
Yeah, for sure. So what I always like to say is your best ambassadors are the people who have already bought from you. And so I always love to start ... I always like to launch an ambassador program to your existing customers. And so that's what we do with each brand. We actually go to their current customer list and we launch. We'll use a piece of software. There's a bunch of different softwares that you can use for this. Our preferred one is Dovetail. It's a great piece of tech. It's also very affordable. It's not going to charge you $2,000 a month like most influencer softwares are. And you can actually have them apply to your program. And maybe you give them a 10% commission on confirmed sales from the organic following, but really the benefit is A, they already have your product so most likely you're not going to have to ship out more product to them if they already have it. Obviously very dependent on the category.
Josh:
But then you're actually enabling them to share about why they love your product so much. And so that is actually going to flood your applications to where you might get 80 new applications from your existing customers. And then from there, it's really on doing outreach to new ambassadors that make sense for your brand. And so what we like to do is really building out campaign briefs. Really asking for more of a testimonial style piece of creative. That seems to be the easiest way to shoot. Face the camera, displaying the product, talking about the three things they love about it and having a call to action.
Brett:
You're giving them that direction of, "Hey, you face the camera, have the product and just tell us the two or three things you love about it." Is that the instruction you're giving ambassadors?
Josh:
Yeah, exactly. But also past that. The two biggest problems we normally see with ambassador programs is A, there's usually a lack of support. Just because usually it's a social media marketer in-house or a performance marketer in-house. They're trying to run this while doing a million other things. So that's one big thing. Then the second one is just poor tracking of ROI. So a lot of people, they either don't have any links that are tracking the sales or they're not leveraging it into pay to really see how you're monetizing the ads. But the third one is just treating every influencer the same. And that might be the first tier of having a testimonial style video. But what if you have an influencer that has 500,000 followers that's been around the block and can actually build out some really gnarly creative. Then you really want to have them in a different here of like your ambassador program so that they're getting a high touch treatment.
Josh:
So maybe you're hopping on a Zoom call with them once a month, talking to them about your promo calendar, showing them, "Hey, here's how I think we help you earn more money." And have a greater level of partnership. And really just developing that relationship so that maybe you eventually put them on a retainer. Because influencers, they really want a long term partnership and consistent income. Those are the two things they want the most. And so if you can paint that picture for them, then you're going to have a really successful program as long as you deliver on your end. And so, yeah, just out of that we're able to get tons of new creative every month from your ambassador program and just keeping them up to date on what your promo calendar looks like and inviting them to new campaigns. We like to build out new campaigns usually every six to eight weeks, so that it's staying top of mind and so that they can continue to earn commission.
Brett:
New campaigns to outreach to find new ambassadors or new campaigns running ambassador content, promoting the product and stuff?
Josh:
New campaigns to your existing ambassadors. So once you maybe sign a hundred ambassadors, just keeping your new campaigns internally for those ambassadors. To be posting about whether it's a new product, a new promotion, maybe you want to launch them all at the same time. All those kind of things can help grow your ambassador program.
Brett:
It's amazing. I love it. And yeah, I'm sure the 80/20 rule, or maybe it's the 90/10 or 95/5, where 80% of your results are coming from 20% of your ambassadors or maybe it's again 90% coming from 10%. But you've got to focus in on those influencers that are really making a big impact and make sure they have everything they need and make sure they stay motivated and make sure they're incentivized and all those things. That totally, totally makes sense.
Brett:
Well, let's do this Josh because we've only got couple minutes left. Tell me a little bit about your agency and what you do specifically. And then I know you've got some really cool resources to help people get started with ambassador marketing. So let's talk about that.
Josh:
Yeah, absolutely. So our agency's called it alignedgrowthmanagement.com and we help eCommerce brands scale to multi seven figures, multi eight figure brands. And yeah, right now we're really focusing on helping scale ambassador programs and doing your paid social as well as a part of that. But yeah, we just actually put together this really cool Google Drive of creative from seven figure, eight figure and actually one nine figure brand in there that we took their top UGC that has done over six or seven figures in sales. And so you can actually come and see what that creative is at alignedgrowthmanagement.com/newsletter. And we're actually going to give you a quick breakdown of 10 different brands and then links to each video so that you can actually duplicate that and take those principles and apply that to your own creative. And hopefully that'll see your cost per clicks decrease and your conversion rate increase.
Brett:
Awesome. So again, that's alignedgrowthmanagement.com/newsletter. Did I get that right?
Josh:
Yep.
Brett:
Awesome. So check that out. I think one of the best ways to learn is by looking at other successful ... Even if it's UGC, where you're not the one actually creating this. Your influencers or your customers are going to be creating it. When you see UGC that's done well, that really strikes that emotional chord and is motivating and convincing and compelling and all that, it can help you understand how do I coach my people to do that? And then also, how do I identify when I get some of this UGC back from my brand? How do I identify which ones I want to run and which ones I don't? And so highly recommend you check that out. And then, Josh, you guys are also for hire as well right? So if someone's like, "Hey, I want to build an ambassador program." And I know you guys are full and probably got a backlog, but you guys are for hire for that as well, correct?
Josh:
Yeah, absolutely. Just come to our site and book a call and happy to chat to see if we can help.
Brett:
Awesome. Sounds good, man. Well, this has been a ton of fun. I'm actually a little disappointed that we're out of time because I have more questions about Groove Life and about ambassador programs and about all of it but we'll have to consider round two at some point. So Josh, this has been fantastic, man. Thank you so much for the time. Any other parting words of wisdom, any asks of the audience? Anything you want to wrap up with?
Josh:
No, I don't think I have anything else. If you want to really connect with me, I'm pretty active on Twitter, @JoshJDurham. And I'm always chatting about D2C growth, how I hate oat milk, and lots of other things on Twitter. So I would love to connect with you there.
Brett:
Continue that conversation. Share you your hatred for oat milk as well. Follow at ... You said it's @JoshJDurham?
Josh:
Yes, sir.
Brett:
Awesome. I'll link to that in the show notes as well so you guys can find that. But Josh, thanks man. Been a ton of fun.
Josh:
Thanks, Brett.
Brett:
Yeah, absolutely. And thank you for tuning in. We love your trust and your support of this podcast and hey, if you haven't subscribed, if you haven't liked ... Actually liked is not a thing. If you haven't given a review or if you haven't shared this podcast, do that. We love that. It helps other people find this podcast of course. And helps us impact and reach more people. And with that, until next time, thank you for listening.
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