An eCommerce Podcast Hosted by Brett Curry

The holy grail right now for online advertising is to be both funny and persuasive. To be relevant and engaging. Funny videos that sell are rare. Mostly because most people don’t know how to create them. In this episode Joseph walks us through his 8-step process for creating funny videos that sell without hiring an expert. 

Joseph Wilkins has a rich background in creating videos that convert. He launched his career in the infomercial business while working on the launch of Little Giant Ladder. That infomercial went on to sell hundreds of millions of dollars worth of ladders.  

I’ve had the privilege of working closely with Joseph on a mutual client - Tru Earth. Joseph and his team created videos for Tru Earth that have now racked up over 100 million views! More than that, though, they are driving new customer acquisition.  

Here’s a look at what we cover:

• Why having a crystal clear picture of your customer in your head is a must before you do anything else. You wouldn’t write a letter without knowing who you’re writing it to, would you?
• How Joseph assembles a team of people to write scripts and why this is more important than fancy editing skills.
• How to find talent for videos
• Why you should probably forget about going viral
• Getting your pace right and testing before you go live with a video
• How and when to add humor to your ads
• How to think about production quality

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Mentioned in this Episode:

Joseph Wilkins

FunnySalesVideos.com
Tru Earth
Ryan McKenzie
eE 164 Ryan McKenzie - Tru Earth‍

eE 125 Ryan McKenzie - Tru Earth‍

Little Giant Ladders
David Ogilvy
Dave Thomas
Dollar Shave Club
Squatty Potty Commercial
SurveyMonkey
B. J. Novak
Fiverr
Upwork
Freelance.com

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Transcript:

Brett:

Well hello, and welcome to another edition of the eCommerce Evolution podcast. I'm your host, Brett Curry, CEO of OMG Commerce, and today, we are talking about one of my all-time favorite topics. I really never get tired of this topic. We're talking about video ads, and specifically, we're talking about how to make a funny sales video without hiring an expert, although you may want to hire an expert, but here's how to do it on your own. We're going to get into lots of actionable content. It's going to be a ton of fun.

Brett:

My guest is just a rockstar when it comes to funny sales videos. We actually met through a shared client, Tru Earth, Ryan McKenzie, shout out to Ryan. You may have tuned into that episode with Ryan, actually two episodes with Ryan on the podcast. My guest today is Joseph Wilkins. Joseph is the founder of FunnySalesVideos.com. He's also the host of the podcast, How to Make a Video Go Viral. He's hailing from the beautiful Salt Lake City, Utah. With that, Joseph, welcome to the show, and how you doing?

Joseph:

I'm awesome. Thanks for having me on the show, Brett. I'm excited to be here.

Brett:

Yeah, really excited to be digging into this topic. For those that are watching the video, they can already tell, your studio is legit. We see screens, and we see speakers, and we see this beautiful condenser microphone with a screen, so you've got a killer setup. Are we actually looking at the studio where you film a lot of your commercials?

Joseph:

Yeah, yeah. Just through that door is a big, 3,000 square foot studio, with big, high ceilings. But it's kind of interesting. We don't use it as much anymore. As you've seen in our videos, we love to go out on location. But yes, we're in the studio today.

Brett:

Awesome. We're going to be talking about today, eight steps anyone can follow to make a funny sales video, so we're going to be walking through that, going to be very actionable, very practical. But before we get into that, Joseph, would love to hear your background, because how does one stumble into becoming the funny sales video guy and funny sales video team? I hear you did a little bit of TV in a previous life?

Joseph:

Yeah, so not to get too far into my background, but I grew up in London, as you might be able to hear. I sound a little bit different. My dad was in the advertising agency industry. He was a photographer, did a lot of the big campaigns, for big companies back in the day, worked for Vogue Magazine, did the Queen of England's personal portraits. That's pretty-

Brett:

Wow. That is-

Joseph:

That was probably the highlight of his career.

Brett:

That's a unique calling card right there. Very few people can say that.

Joseph:

Yeah, so I grew up kind of with it in my blood, so when I finished college, I started graphic design, and I started working in marketing, and it was when the internet was getting to the point where it could support video, and my boss said, "Hey, we need to learn some video stuff. Let's send the graphic designer on a course." That was really the beginning. So I started freelancing on the side, and then my very first client as a freelancer was Little Giant Ladders. They're hearing me talk-

Brett:

Little Giant Ladders? Okay, wow.

Joseph:

Yeah. So I was part of a three-company production, producing that infomercial, that did over $200 million in sales, just... I mean, talk about starting with a big hit in your pocket. And I really milked that for all it was worth, and approached other companies, and said, "You know, let's do some infomercials," and the first 15 years, that's really what we did, was long-form and short-form, direct response television commercials, and then a bunch of web videos on the side. But the problem is, I don't know about you, Brett, I literally cannot remember the last time I turned on a television.

Brett:

Yeah, just to watch like a major network.

Joseph:

Yeah.

Brett:

Other than maybe a sporting event for some people. I mean, that's usually-

Joseph:

Sports or news.

Brett:

... if I'm tuning into major networks, yeah, sports, yeah.

Joseph:

Yeah, but you certainly don't flip through the channels, which is how we used to get you with our infomercials. So as you can imagine, our clients started saying, "We can't keep spending the same amount of money on production and getting lower and lower results, because nobody's watching TV." So it was about 15 years ago... And the funny thing is, before that, when a client would call us and say, "Hey, we saw this really funny video online. We want to do something like that," we would say, "Sorry, we don't do funny. Go find someone else." Because the worst thing you can do is try to be funny when you're not. And we didn't have the team around that-

Brett:

Then that's just sad, right? That's just sad, it's just embarrassing. When you try to be funny and you're not, it's like, "Oh. Nice." Yeah.

Joseph:

I mean, it's cultural egg on your face.

Brett:

Totally.

Joseph:

It wasn't until about four or five years ago that we really said, "Okay, we've got to pivot. We've got to figure out where are these viewers watching, how are they watching, and how do we create videos that get the results that we used to get on TV?" We really started to look at my hero, the Harmon Brothers, and other-

Brett:

Yeah, yeah, worthy hero too. That group, those guys are just fantastic.

Joseph:

Yeah, absolutely geniuses, and kind of put the flag in the ground for what really good content, that not only engages but converts to sales, looks like. And this was before they launched their Harmon Brothers University. It was about a year before they launched it, and we said, "Okay, we need to assemble a team of really good writers." We knew how to shoot and edit, but we didn't have the skills to script it. To give you a compare and contrast, before this, our biggest video that we'd ever got in 15 years online had 100,000 views. We thought that was pretty good.

Brett:

Sure.

Joseph:

Our very first campaign that we launched after we started Funny Sales Videos, with this team of new, really good writers, and I can talk later about how we assembled that team, and how your listeners can do the same-

Brett:

Would love to hear about that, for sure.

Joseph:

Yeah, so our very first campaign was for a super, super, niche of a niche client. We didn't know if it was going to be successful or not. We did three videos for them, and between them, we did seven million views. So compare those two, 100,000 views versus seven million views, and more importantly, views don't mean too much unless they translate to sales, this very small company did over $500,000 in sales from those three videos. So we knew we were onto something, and then we can talk more, but fast-forward to today, as you know, our biggest campaign today, between three or four videos, we're about to hit 90 million views. That's Tru Earth.

Brett:

It's just crazy, yeah for Tru Earth.

Joseph:

Yeah, nutty.

Brett:

Yeah. At OMG, we're running the YouTube side of that, so we get to see that firsthand. We got court side seats, as we're running these videos, and they're just doing a fantastic job. Not only are they racking up the views, and these videos are three-and-a-half minutes long, but the engagement rate is crazy, and the conversion rate is great as well. CPAs, cost per acquisition, or CAC, customer acquisition cost, is all fantastic. These videos are really, really working. So, a couple things I want to point-

Joseph:

And I'll just say-

Brett:

Go ahead.

Joseph:

... I have one more thing.

Brett:

Yeah, please.

Joseph:

We didn't want to just be a me-too agency, right?

Brett:

Yeah.

Joseph:

There's a lot of companies out there that are trying to do the same thing that the Harmon Brothers did. We kind of put our flag in the ground and said we want to be the agency for the company that doesn't have the kinds of budgets that bigger agencies are charging. I mean, when you watch these videos, you can tell they take months to produce. They're very expensive, and they're still not cheap, but we like to say, you know, we're the guys to call when you can't afford to call the guys who really do it right.

Brett:

I love that. But yeah, some of the videos you're watching and some of the Harmon Brothers productions are half a million dollars, a million dollars, or more, so they're big-time productions. A couple interesting things I want to point out. One, I love that you started with infomercials, because I think that is just the best place to start, to learn how to sell with video. I've shared on the podcast before, but one of my earliest memories of when I thought, "Hmm, making ads would be interesting. That'd be interesting as a career," was when I watched the Ginsu knife commercials, and I was just enthralled with it. I watched the whole thing, and I was a kid. I wasn't going to buy knives, but I was like, "This is so cool. It's cutting the Pepsi can, then it's cutting the tomato," and it was just blowing my mind.

Brett:

But then after that, as I got into advertising, I used to watch infomercials, and would just watch the cadence, and the pace, and the speed, and how they're tackling objections and things like that. It's just the best way, I think, to watch sale on video. I think it goes back also to a David Oglevee principle, which I'm a big David Oglevee fan. He always said that it isn't creative if it doesn't sell, right? It's not creative if it doesn't sell, so you guys then have mastered...

Brett:

And I also like the idea, because there was this time when people didn't do funny. In fact, another, to kind of back to one of the classics, Claude Hopkins would say, "Funny doesn't sell," right? Don't be a clown in your ads, but that was like a more serious time, right? Now, we're finding that funny does sell, if you do it the right way. And the Harmon Brothers did kind of pave the way with that.

Joseph:

Yeah.

Brett:

But before we get into these eight steps, I want to talk about kind of mistakes that people make. What do you see, as you're evaluating videos that clients already have, or you're watching other advertisers, what are some of the mistakes you see people make, either in approach, or ideation, or execution? What are some of the common things you see?

Joseph:

Well, I mean, I'll be honest, I'm a bit of a snob, so I-

Brett:

And you should be. You should be a snob, yeah.

Joseph:

I see videos all the time that make critical mistakes, and you would think, being a production guy, I started out behind the camera, stressing out on the details, and you would think I would say, "Oh, people are trying to film it themselves." That's actually not the biggest mistake I'm seeing.

Brett:

Totally.

Joseph:

I mean, literally, for those that are watching, I'm holding my iPhone in my hand. This would have cost $50,000 when I started this company, to get a camera... In fact, a camera didn't exist when I started this company 20 years ago, that does what your iPhone does today.

Brett:

It's insane.

Joseph:

It creates beautiful pictures. Now, that doesn't mean that you're going to go create a masterpiece unless you know how to use it, but the picture quality isn't the issue anymore. In fact, I would say sound is way more important than picture if you're going to film with an iPhone, because I iPhone will give you great picture. It won't give you great sound.

Brett:

Correct, yeah.

Joseph:

So there's just a first tip, is if you're going to film something, figure out how to get really good sound. You know, get another microphone, just like you can see the two of us are sitting in front of great microphones. People will forgive a bad image quicker than they'll forgive bad sound. There's one tip, but really, there's eight steps that we take every project through, and the two that I would say you cannot try to do yourself, or you shouldn't try to do yourself, are the scripting, so the writing, and the acting.

Brett:

Yeah.

Joseph:

Everything else, I think is forgivable. Everything else, I think is accomplishable on a much smaller scale, but those two things, you really can't fake, really good writing and really good acting.

Brett:

Yeah. Totally agree with that. I think there are some, especially if you're doing this type of video, right? If you're trying to be funny, you're creating a funny sales video, likely, it's not going to be you in the video, or if it is, you may not be writing the script or putting it all together. I think there is a place-

Joseph:

Totally.

Brett:

... for the owner to be on camera, speaking about the product, and that video can be useful. You know, I go back to the Wendy's campaign from days gone by, of Dave Thompson, I believe was the founder, and they did studies, like him on camera, talking about why Wendy's burgers are great. They just outperformed everything else. He's since passed, but... So there's a time and place for that, but I agree.

Joseph:

Yeah, Dollar Shave Club is another example. That's an exception. What a lot of people don't understand was that guy was actually an improv-

Brett:

Stand-up comedian.

Joseph:

... comedian in his college days, so he had the skills. If you have those skills, by all means, you can be your best actor, but unless you're a trained actor, don't try and do one of these kinds of videos. But just like you said, marketing is like a salad. You should have all sorts of kinds of videos. For this kind of video, I just don't see it unless you are one of those characters that are really good in front of the camera.

Brett:

Yeah, totally agree. I like having kind of a founder's story video, and that should feature the founder, but then like these hero videos, these funny videos, these are going to be kind of a different feel. So, great stuff. Let's actually dive into the eight steps. Let's take it away. What's step number one, and go in whatever order you want to go?

Joseph:

Sure. Step number one is, it's really marketing 101, doing your research. Imagine if you're writing a letter to somebody. Would you write a letter to them and then decide who you're going to address it to? I mean, that's madness, but yet people sit down and start to write scripts, or sales emails, or-

Brett:

You can start with a very personal opening of, "To whom it may concern." I always love letters that start like that. You're like, "Oh, this is personal. Thank you." Yeah.

Joseph:

Yeah, or underscore F Name. That's always my favorite. But anyway, you've got to understand who is it that's going to watch this video. Who do you want this video? What are their big problems? I'm not talking about high-level surface problems. I'm talking about deep underlying needs that they have, and the best way that you can do that, and you'd be amazed how many CEOs I work with, and they tell me, "Here are the top three selling points," and then we'll go away and do our research, and go through the steps I'm about to talk about, and we'll come back and say, "You need to completely change your marketing. You're singing the wrong song. You're drinking your own Kool-Aid. Stop, and go ask your customers why do they buy."

Joseph:

The best way to do that, and I learned this in one of the Harmon Brothers University courses, is to read a ton of reviews. The number one comment that we got on that first Tru Earth video was, "That actress is me. That actress is just like me," or, "I want to be friends with her," or, "I just feel a connection....

Brett:

She's kind of become like a mini celebrity since this ...

Joseph:

Yeah, she absolutely did, and guess why. It's because we literally lifted lines from customer comments and put those in the script. So the things that she was saying were the things that the customers were saying. So the more detailed, the more granular you can get in building your customer avatar before you ever put pen to paper, the more you're going to hit that target. That's the first thing, and there's five steps in my eBook. I can't take the time to go through each one, but really understand who your customer is. We had a client, Pela Case. I don't know if you know those guys.

Brett:

No.

Joseph:

They're up in Canada. They do a similar space to Ryan. They're an eco-conscious phone case that is compostable. When they sent me their customer avatar document, it was so detailed, down to, "Here's her name. Here's what she orders at Starbucks. Here are the radio stations she listens to." I mean, with data like that, it's so much easier to be able to write, to connect with that person. So think about that in all of your marketing. How do you get down to that level?

Brett:

Yeah, and really that response that you guys heard from that first Tru Earth video of, "I want to be like her, I want to be friends with her, she is me," that is the goal. That's what you're trying to accomplish. One of my favorite quotes when it comes to marketing, and I can't remember who I heard this from, but it's, "You should enter the conversation taking place in your customer's head," right? There's fears, concerns, problems, issues that people are trying to solve, and are bouncing around in their head, and really, your job is just to enter that conversation. And what better way to do that than with lines extracted from customer reviews, and customer comments, and customer feedback? Yeah, just fantastic, and really, there's nothing worse than an ad that just falls flat and is totally irrelevant, right? That doesn't speak to the customer at all, and I think that's the issue that some executives can get into if they're too removed from their customer, or too removed from their audience, so okay awesome, fantastic place to start.

Joseph:

And it also, that information, Brett, is going to give agencies like yours way more detail to be able to say, "Okay, where are these people spending their time online? What platforms are we even building this video for?"

Brett:

Yeah, what channels do we target? What audiences do we build? How do we structure these campaigns? Yeah, really without that, we have to do a lot of experimentation and guesswork, but with that information, we can really get off to a great start, with proper audience testing. That's fantastic. All right, that's step number one. What's step number two?

Joseph:

Okay, step two is the fun one, brainstorming. Now, a lot of people, that word terrifies them, because it literally means start with a blank sheet. And what we do-

Brett:

That is scary for a lot of people, for sure.

Joseph:

Yeah, yeah. I mean, it's still scary for us sometimes, but what we tell people is start out with zero judgment. Start out with zero expectation, and we do an exercise where we basically say, "Okay, here's a blank sheet. We're not leaving this room until there are 50 concepts on the page." Now, a concept is just two things. Who is the hero of this video? So, in Tru Earth's case, it was a mother who has two kids and cares about the planet, but isn't an extremist, right? So she's just a regular, real mom. And the second thing is what is their problem, and how do we make that fun? Right?

Joseph:

Before you worry about fun, though, just throw out 50 concepts with those two things. Who's our hero? What's their problem? The more story you can add, the better. We will literally get out a piece of paper, and we'll just start throwing it out, throwing it out. Nobody's judging the ideas. Nobody even cares if they're good or bad. In fact, a lot of the time, the worse the idea is, the better, because it'll give somebody else the chance to think, and say, "Well, okay, what if we did it slightly differently?" And you can get tangential ideas that are better than if you had never thrown out that bad idea.

Brett:

Yeah. Too often in a brainstorming session, and even in other scenarios or other situations too, we're too... We have too tight of a filter, right? We want to make sure like, "Well, I don't want to share this unless it's really polished, or unless it's a really good idea, or unless it's totally going to work." But you don't know that. That's not the point. Like, brainstorming's just to get any idea out there, because who knows what that salad of ideas is going to lead to?

Joseph:

Right. I mean, think about that brainstorm room where the Harmon Brothers said, "Okay, we're trying to sell Squatty Potty. What if we did an English prince and a pooping unicorn?"

Brett:

Yeah.

Joseph:

I mean, who's going to say yes to that idea? But the most successful viral video of all time, I think, still, if not-

Brett:

I think you're right, yeah.

Joseph:

... one of them.

Brett:

Yeah. The pooping unicorn.

Joseph:

Don't filter your ideas.

Brett:

Right.

Joseph:

But at some point, you have to say, "Okay, now we've filled the page with 50 ideas." And as an agency, typically what I'm doing is I'm bringing my top five to the client. You don't want to overwhelm them, and you also don't want to give them the option to pick terrible ideas, which sometimes clients will do if you give them the chance. But, we'll come back to the client and we'll say, "Okay, here are our top five ideas," and we'll get some feedback before we tell them which one we think is right, because we want to involve them in the process. But eventually, you want to go with the idea that just resonates.

Joseph:

Now, how do we pick that? I really can't tell you that. It just feels right. Now, the one thing I can tell you, and step seven, I'm skipping ahead, step seven is testing, at every single level. What you really want to do, ideally, you want to have a small group of sample clients or customers, right? Some of my customers, we'll send out an email to the best customers and say, "We'll give you a free voucher for our stuff if you participate in this process, which is simply we're going to send you four or five emails, and you're going to give us your opinion." You want to send a sample in person ideally, or just send out a SurveyMonkey to a few customers, not too many, 10's probably the most I would do, and just get feedback on every level.

Joseph:

No one customer is going to give you the answer. It's the wisdom of the crowd that you're looking for. Who generally likes it? Now, as a marketer, you have an informed opinion as well. You want to guide it in the way that you think it should go, but ultimately, I've had my mind changed when I listened to these customers. Oh, that actually wasn't the best concept. This is the one that they're resonating with.

Brett:

Yeah.

Joseph:

So that's basically the step two, is pick your number one concept, and again, you're not... All you're picking is who's our hero character, what's their problem?

Brett:

And then what's their problem? One thing that I'll chime in on, when it comes to what resonates, I heard this interview with BJ Novak, who was one of the writers for The Office.

Joseph:

Oh yeah.

Brett:

Brilliant guy, and he talked about humor causes a physical reaction. If you're pitching a joke, and he did a lot of stand-up comedy, if you're telling a joke, you're watching for that physical reaction, right? People can't help it. If something's funny, they move, they lean in, they laugh, they tear up, all kinds of physical reactions, so I think you have to watch for that. And I've done this before with our team, when I'm showing a client video, especially if I've seen the video a few times. I won't watch the video. I'll watch the room, and I'll see like, is there a spot when people move, or laugh, or is there a spot when they check their phone, or start to look out the window, or have this far-off look in their eyes? Because we're losing them, right? So what is the physical reaction, and do you... When you watch it, are there points in the video where you're feeling emotional, or where you're hearing this and you're like, "Oh, this is great," or, "Oh man, I want that"? Like, is it causing an emotional reaction? That's key.

Joseph:

I love that. We actually used to do that in infomercials. I remember, with the Little Giant Ladder, we literally hired a focus group company to fill a room with 20 people, and we were behind a one-way mirror. They had a dial, and it could only be on "I like it" or "I don't like it," and they would constantly switch it back and forth, and that gave us clues in the edit, where to cut, where to expand. And we can talk about this in the editing step, five, but you've got to edit your video to take out anything that would cause them to change the channel, proverbially.

Brett:

Yeah, anything that will slow them down, anything that doesn't get to that solution of this problem, anything that causes their eye to glaze over, even a little bit, is deadly. Okay, we have-

Joseph:

Yeah, so step three-

Brett:

Step three.

Joseph:

... scripting. You've got your concept, but it's only those two details. You've now got to create... Most of our videos are around three, three-and-a-half, maybe four minutes long, and a lot of people say, "Well, that's too long for the internet." People don't stop watching videos because they're too long. They watch Netflix for two hours. They stop watching because they get bored. They stop watching because it's irrelevant. They stop watching because it's just has no value to them. So your job is to create a script that is packed full, from the very first second to the last, and obviously, there's going to be an attrition rate. You're never going to get a video... I think the Harmon Brothers have said publicly, even their videos get like a 5% watch-through rate, so 95% leave the video before the end, but if you've got a video that's getting tens of millions of views, 5% of that is huge.

Brett:

Yeah, and often, even the person that watches to two minutes, so if it's a three-and-a-half minute video, the person that watches to one-and-a-half minutes or two-and-a-half minutes, they're going to be way more sold than someone who only watched a 30-second video. And we've tested this a lot. 30-second version of a video versus like a minute-and-a-half version of a video, and the minute-and-a-half version usually has 10X the conversion rate of that shorter video. So it kind of depends on what you want to do. Do you just want to rack up views or do you want to get conversions? And the cool thing is, if you do it the way you're talking about, you're going to rack up a lot of views too, while you're driving conversions.

Joseph:

Right.

Brett:

So on the script-writing piece, and please feel free to dig into any other details there that you want to, and I want to point people to your eBook in just a minute, but I'm also very curious how you assembled your team, because I would totally agree with you. I even know people that have been in advertising their whole adult lives, and they suck at writing scripts. Writing scripts is so hard, so any tips you want to give there? And then I would love to hear how you assembled your team.

Joseph:

Again, the wisdom of the crowd. If you go to FunnySalesVideos.com, watch some of those videos, there's not a script there that wasn't touched by at least eight writers.

Brett:

Wow. Wow.

Joseph:

We actually go through three phases of scripting. Phase one is the marketing copy points, which was pretty much done in step one. When you're doing your customer review exercise, you're picking out what are the five key points that you have to deliver for people to buy this product? Point number one is going to get mentioned way more than point number five, but in about three minutes, you can get to about five selling points. So you've got to create a marketing flow of we got to say this, we got to say this. If there are objections you need to overcome, you've got to address them. An unresolved concern will never lead to a sale.

Brett:

Totally. Totally.

Joseph:

And also a confused mind will never lead to a sale, so you've got to clearly clarify exactly what the benefit is that your customer's going to get by clicking below, what the offer is, and again, if your price is too high, and if you're going to mention your price in the video, which is a whole nother subject, you've got to address why it's high. Your competitor might be half the price, but breaks four times as many times, so you only have to buy one as opposed to four. You've got to figure out, if in that reviewing of your customers, there's a key theme that comes up over and over again, you've got to address it.

Brett:

Yeah. Yeah, and I love that. I don't want to get on too much of a tangent, because I think we can make a podcast all about price and the psychology of price, but yeah, there's ways to do it, like you make a... If maybe you're more expensive than your competitors, make an indirect comparison, right? "Sleeping on our mattress is way cheaper than going to the chiropractor three times a month," right? Or whatever. You make an indirect comparison, or you do kind of what the Harmon Brothers did with Purple Mattress and talk about... They kind of did this value stacking thing, and they also talked about, "Hey, you know, really expensive mattresses are five or $10,000, but these aren't even $4,000," so they're comparing it to the high end of the market. There's lots of things you can do with psychology of price, and sometimes, you don't even mention it. Sometimes, you want to mention that on the lander, but again, that's kind of a whole nother topic, so-

Joseph:

Exactly.

Brett:

Yeah.

Joseph:

Once you've got your marketing framework, then you bring in somebody with a different set of skills, which is a storyteller, a creative writer, a script writer. However you want to frame it, and just to let you know, I don't have any full-time writers on staff. I use 100% freelancers. You can go onto sites like Fiverr, and Upwork, and freelancer.com, and you can find really talented, really good writers, that maybe are full-time writers at big companies, that they're just looking for extra income on the side, and you can ask them to give you a quote to help with your script. Now, after four or five years of doing this, we've gone through a lot of bad writers to get to the good, but even a bad writer will add to the process, and hopefully, on every video, and this is something that makes us different. We're very small. I personally am the creative director on every video.

Brett:

That's awesome.

Joseph:

Now, that doesn't mean I do any one thing. I just oversee the whole process. You have to have somebody, maybe that's you or maybe that's somebody that you hire. You've got to have someone that's going to protect the story from beginning to end, because a great comedian could come in and write a joke that's going to make you pee your pants, but if it doesn't further the sale, it has to go. You need somebody that's protecting the brand, protecting the project from beginning to end, so multiple people need to be contributing on this. But ultimately, the second kind of writing is the creative writing, that takes the character, the problem, or the marketing points and puts a story together.

Joseph:

Now, it's not funny yet, but it's creative. It's fun. I'm still not going to show it to the client. Personally, I don't like doing that until it's ready to be shown. That's step three. I will bring in at least five trained comedy writers, so these are typically people who do improv comedy in their spare time, or full-time comedians. I have a couple of people that work on cruise ships. That's their full-time gig, so guess-

Brett:

Interesting.

Joseph:

... what they're doing during the day? They're sitting on the beach in Saint Johns, writing for me. They're filling their time, or they're traveling from one city to the next to do stand-up in a club, and on the plane, they're writing for me. You guys can do the exact same thing. Just reach out to them. You'd be amazed. They're kind of a starving artist, so they love it when businesses say, "Hey, let me give you money for time." But again, no one comedian is going to be able to write a funny sales video. You want multiple comedy writers on each project, and one person collating it, because we do it virtually, so we use Dropbox Paper, and everyone gets to see everyone else's notes, and the best stuff makes it onto the sheet, but the best stuff isn't necessarily the funniest. It's the most relevant-

Brett:

The most relevant, yeah.

Joseph:

... that advances the story.

Brett:

Because if something is really, really funny, but it diverts... You know, something can be so funny, and too different from the story, or out of place in the story, and it may cause a belly laugh or may cause you to pee your pants, but if it distracts you, then you want to avoid that, right? That's where that person that oversees all of it, that creative director, is so key, because you have to stay on point. I would rather be a little less funny, but relevant, than to be super funny and irrelevant. ...

Joseph:

And last point on comedy, it has to hit the avatar. Imagine-

Brett:

It has to be funny to them.

Joseph:

... we've done videos. Yeah-

Brett:

Doesn't matter if it's funny to you.

Joseph:

... exactly, exactly. We've done videos for CXO, SaaS companies that are targeting CXOs. They're not going to think that the same humor is funny as a video targeting teenagers with an acne cream. Two completely different senses of humor, so you got to test it. Again, back to creating that customer avatar brain share that you can email out and say, you know... Ideally, I love your comment earlier, ideally, I like to sit people down and just watch them as they read the jokes. You can't always do that, but you've got to test at every step of the process, or else again, you're writing a letter to somebody that you don't know who it is. So step four is adding the comedy. Those are kind of two... Yeah.

Joseph:

Step five is production. This is where the rubber meets the road, and I want to say do not proceed to step four until you've done all of the steps before, and have a script that you're 100% happy with. Now, it's never going to be perfect, right? Version one is better than version none. If perfection was the goal, we would have a stack of scripts and no videos online. But, you don't want to waste money producing a script that really isn't working, so that's the longest part of our process.

Joseph:

Typically a video, in Funny Sales Videos, if you were to call us and say, "Let's do a video," minimum it's going to be four months. Two of those months are just working on the script, so it's definitely the longest step in the process, but you can't rush it. You can't try to go to production and say, "Oh, maybe this'll be funnier once we actually see it, and the actor delivers it." No, you've got to be laughing at the script before you think you're going to be laughing at the actor. Yes.

Joseph:

You would think I would say the most important part of production is a great camera, and great lights, and beautiful sound. It's not. It's casting. It's picking the right actor. A lot of businesses don't understand that auditioning actors, even very professional actors, is free. Does not cost a penny. We are very picky with the actors that we choose. It's something that we take a lot of thought and time with. We will typically audition about 50 actors for each key role.

Joseph:

Now, what does that look like? In the world of post, hopefully, COVID, it's way easier, because what you do is you send out an email to your local top two, or three, four acting agencies, you give them a portion of the script, don't give them the whole script. Pick out maybe three or four paragraphs that are the most challenging, that you want to make sure this person can nail, and say... You want to give them the rate that you're willing to pay, because you don't want to waste their time if you're thinking, "Oh, I'm going to pay this much," and they're thinking, "I'm going to get hired at this much." So you want to be transparent. You also want to let them know roughly when you're going to be filming, because actors are booked up, and they're a one commodity, their time.

Joseph:

When you send it out, you'll get video auditions that'll come back to you. Watch through those, and I typically pick my top four or five, and then I'll set up a callback. Either they'll come here physically into the studio, and my clients, if they're local, will be here, or we'll get them on Zoom to watch, and we'll not only go over those paragraphs that we've just done in a virtual audition, but I'll throw other stuff at them, and I'll see, "Can you do that faster? Can you do it a little bit slower? Can you put the emphasis on this word? Can you deliver this joke a little bit differently?"

Joseph:

What you're looking for is are they coachable? Are they directable? You're also looking for, and this is why I love working with actors that have experience with improv, comedy. I'm looking for what are they bringing that I didn't write? Your scripts should never follow the same format as the finished video. It should always be better. During the production process, you don't want to be so focused on getting it exactly the way that it's scripted that you don't allow your actors to play. A lot of the time... Absolutely. Yes. Yeah. Yeah, and picking actors that have experience, they should give you things during the filming, that you're just like, "Well, I never would have thought about that."

Joseph:

Anyway, that, step five, is the production. Now, if you're a small business, you're trying to do this yourself, I already mentioned, make sure you have good sound, or go out and hire a relatively low cost local production company. Yeah. Right. And it's about visually being disruptive. The most important part of your video is the first five to 10 seconds, because nobody's going to watch anything past that if you don't visually disrupt them, and the better you can do with your visuals, both from a what am I actually showing, but also how good does it look, how different does it look to the next video that they're scrolling past?

Joseph:

If everyone is showing videos that were filmed on their iPhone, your video's going to look just the same. If you go out and hire professionals, that's where they earn their money. They're going to make it look different, and therefore disruptive compared to the other videos, and obviously, any of these Harmon Brothers videos that you've seen, there's details in every single shot, that you just won't get if you try to do it yourself. But, version one is better than version none, so if that's all that you can afford, by all means, go out and do it yourself.

Joseph:

Step six is the editing. That's where the rubber really hits the road, because if you've done all the previous steps right, you'll have a great video, but you can make it a great video better with good editing. The same line delivered by an actor feels completely different if you put the cut here as opposed to the cut here. After they deliver their line, do we go straight into another line, or do we let that line breathe? I can't tell you how to do that. A good editor just feels it. Comedy is about timing.

Joseph:

As you know, Brett, we also edit our videos a whole bunch of different ways. We'll do a long version, a short version. We'll format them for square, widescreen for YouTube, square for mobile, so back to production, you've got to make sure that you have your guides on your monitor, so that you're not filming something where the critical detail is on the outside edges of the frame, because that's going to get chopped off when you version your square video for mobile.

Joseph:

Editing is key, because you can speed things up, and cut out pauses, and overlap dialog, and anything to keep this feeling exciting, engaging, nothing that's going to get borning and nothing that gets confusing. Again, you want to test different versions of your edit with your sample audience, or with people... Like, literally here at the studio, when the delivery man comes, I'll say, "Can you watch this for a second? Give me some feedback," or clients will come, and I'm always looking for feedback on the editing, so test out what works, what doesn't, and a great editor's really going to help.

Joseph:

Totally. Yeah, it's just like a music track. If it was just (singing) the whole time. You've got to have the bridge, and let things slow down and then speed up. That's how you keep people's attention. Now, I mentioned this earlier. We also edit different versions with different content, so typically, we'll do three different opening hooks. That's the first five to 10 seconds. The rest of the video is exactly the same, but the opening hook is completely different, and we test it to see which gets the bigger watch-through rate, which gets the better click-through rate. With some of our clients, we do the same thing with the offer. One of the offers could be... Same video, just a different offer. One could be buy one, get one free. One could be get 25% off. One could be click for a free eBook, or whatever it is. You want to test as many different combinations to get to the ultimate, highest-converting version. You can do that with good editing.

Joseph:

Step seven, we've already spoken about, testing. You can speaking about that on multiple podcast episodes, but have somebody... And we don't do this. Have somebody on your team, whether it's an agency or an employee who really knows how, to take all of these multiple versions of your video, and find out, without spending too much money, and that's the key, how to find out which version of this video you want to start funneling, and opening the floodgates, and really getting out there. You don't want to waste your money on a version that isn't the highest-converting version. You also want to test your squeeze page, and all the copy on your squeeze page, and different upsells and cross-sales. That's where a really good marketing agency will take a great video, which is really only 50% of the process, right? My job is to get you to watch this video to the end and then click through, but that doesn't market client the money. The money really comes on the backend, where you take that click and you don't waste it. You put it in a well-oiled funnel. Yeah.

Joseph:

Yeah. Yeah, and one thing that we worked on together, that previous to doing these kinds of videos, I wasn't aware of, is the retention curve, understanding that you can still make edits after you've launched a small test, with the data that you get from that retention curve, which is basically showing you how the majority of people, where are we losing them? Where are they dropping off? You can literally say, "Okay, at one minute and 30 seconds, there's this big drop in viewers. People are bouncing." Now, that's normal to some degree, when you introduce the product, because really, what these videos are are sketch comedy pieces, or ads disguised as sketch comedy pieces, so whenever somebody finally realizes, "Oh, this is actually an ad," it's only natural that you're going to see a lot of people bouncing.

Joseph:

But, if there are other places where it's not when you're introducing the product, and you're seeing a big drop, you can go back into the video and say, "Okay, I need to cut this section out," or, "I've got to speed this up," or, "I've got to reorder this video so that we're not losing people," and with a really good marketer that can get into that data and tell you, working together with an editor, it's not video delivered and here it is. It's a work in progress, to refine and tweak that until it's the best version, and then again, you open up the floodgates and spend a bunch of money promoting it.

Joseph:

Okay. Yeah, so step eight, real quick, real simple. Forget going viral. It's all about creating a conversion video. It's about, when clients come to us and say, "We want to hire you," when we swap out the creative that they're doing with ours, they see a high increase on return on ad spend. Don't think that going through all these steps is going to get you a video that when you put it on YouTube, it's going to get you a million views. That's not what it's about. It's about the whole way, saying, "Okay, this is a business. We're not going to plan on a flash-in-the-pan lightning strikes, and one time, we get a big viral boost." No, it's about repeatability, consistency, and something that you can plan and forecast based on. So forget viral. Reprogram your mind that this video is going to be a conversion video, that when you spend X amount of dollars, you're going to bring X amount of dollars back in return. Those are my eight steps.

Joseph:

That's why we're on video seven for Tru Earth. Yeah, just go to FunnySalesVideos.com. It's just a simple page that shows... You can see some of our videos. You can see some more case studies. Then scroll down to the bottom, and you'll see a big icon that basically just shows how you can download the free eBook. Yeah. Yeah, so we started it about six months ago, and really, what we do on the podcast is we interview people that have had a video quote-unquote "Go viral." We always laugh that the title is kind of clickbaity, How to Make a Video Go Viral. Yeah, you do. That's a hook. That's our opening grabber.

Joseph:

That's right, yeah. We've interviewed Ryan on the show. We've interviewed four or five other of our clients, and then we've also reached out to other companies, that we didn't work with, but we want to learn what it was like? How did you do it? We basically just interview anyone that has marketing videos that have over a million views, and have been profitable, and go into much more detail on the things that we've talked about today. On all the regular podcast, or you can just go to howtomakeavideogoviral.com. Sure. Yeah, sure. It's been a blast.

‍

Growing your sales on Amazon really comes down to three things:

• Getting found on Amazon by improving your organic rankings or paying for ads.  
• Getting more people to click on your listings once they see it.  
• Convincing more shoppers that your product is the one for them.

It sounds simple enough right? But most Amazon sellers miss several key tactics that severely limit growth. That’s why I was so excited to talk to Daniela Bolzmann founder of Mindfulgoods.co. She is a PRO at making products on Amazon stand out. She’s so good, in fact, that Amazon created a case study featuring her work.  

Here’s a look at what we unpack on this episode:

• How to maximize your SEO efforts for launching new products on Amazon
• How to integrate and tweak existing listings that already rank to get them to rank HIGHER
• Leveraging your 6 images for maximum conversions
• What to do with A+ content to make your product nearly irresistible 
• How Yes Bar gets it right with their listing optimization and storefront optimization
• Top Amazon listing mistakes sellers make and how to avoid them

‍

Mentioned in This Episode:

Daniela Bolzmann

Via LinkedIn ‍

MindfulGoods.co‍

Mindful Goods Course: Launch Ready Listings‍

In mentioned order:

Helium 10‍

Jungle Scout‍

Viral Launch‍

Yes Bar‍

PickFu‍

eE 73 John Li - PickFu‍

RX Bar
Mindful Goods Course: Launch Ready Listings‍

Ezra Firestone‍

YouTube Course with Ezra Firestone and Brett Curry‍

A+ Content on Amazon‍

Yes Bar Storefront on Amazon

Brett:

Well, hello, and welcome to another edition of the eCommerce Evolution podcast. I'm your host, Brett Curry, CEO of OMG Commerce. And today, we're talking Amazon listing optimization. I love this topic. It's a topic that will probably never go away, right? As long as there's Amazon, as long as we're trying to maximize that channel, we have to think about listing optimization. And so my guest today is someone who came highly, highly recommended to me. We had a great chat kind of prepping for this, and so super excited to dive into this chat with Daniela Bolzmann. She's the founder of mindfulgoods.co the one-stop-shop for Amazon listings done better. This female-led agency supports passionate brand builders to step up their Amazon game and they provide done-for-you services to help you sell more. So this is what she does day in and day out. She's got a very simple, straightforward, but powerful three-step approach to optimizing listings, and that's what we're going to dive into today. So Daniela, how's it going and welcome to the show.

Daniela:

Yeah, thanks for having me. I'm excited to be here.

Brett:

Really excited we can make this happen. I think after a few reschedules and other craziness. We're both busy. But thanks for being flexible and thanks for being here today. And so before we dive into kind of the three steps to optimizing your listings, what's your background? How did you gain this expertise in the Amazon world? Was that your dream from the time you were a small child?

Daniela:

Actually, I've always been very entrepreneurial-minded. I've always been a creative. I come from a 10-year-plus marketing background and I actually had a tech startup before this. So, very different. I was in logistics and decided to-

Brett:

So logistics, tech startup, and marketing. That's a great combo.

Daniela:

Yeah, a lot of that has carried over. I used to be what I'd call a Jill of all trades, where I'd dabble in a bit of everything because I'd like to understand it, and then manage a team. But what I noticed is with remote working is there's this whole migration happening of, I had an office with 20 employees and I felt like I was in my '20s, but I was a mom and loved my company, loved what we were building, but realized in this next iteration of what I wanted to build, I wanted to have a remote team. And so I wanted to focus on e-commerce and around the same time was when Amazon had bought Whole Foods. My family has a CPG business, so I had asked them if I could learn the Amazon ropes by way of their product.

Daniela:

And once I went through that process and realized how hard it was for me, a seasoned marketer and entrepreneur, I realized that there was going to be some huge learning curves for other smaller teams, other brand builders, emerging brands out there, right? So I started getting into just regular retainer agency work, had a small team, and then realized that we were turning away a lot of brands that just needed help getting from A to B on Amazon. They didn't necessarily have the funds to go out and hire a full service agency. So we kind of flipped our model, and now we just do done-for-you listing optimization to help brands get that first step on Amazon.

Brett:

That's awesome. I love it. Love that background. And yeah, I think that it's just the most natural way to build a business, right, is you experience a pain point yourself and you figure out the solution, then you realize, "Hey, there's a lot of other people that need this solution as well." And that's what you did. And so, let's dive right into it. So let's talk about these three ways to optimize Amazon listings. And why don't you kick us off with step number one, and then I'll have several questions and we'll dive into that.

Daniela:

Sure. Actually, we have a very in-depth version of this that we call the buy-now method, but we tried to make it as simple as possible and just get it down to three simple steps so that everyone can feel like they can accomplish this. The first step is actually getting found through your SEO. And while every Amazon consultant out there is going to tell you as a brand builder that there's 150 things you need to be doing at all times, when you're first getting started on Amazon and you're setting up your listings, these are really just the three things you need to focus on. So the first one is SEO. Amazon is a search engine, and so I can't tell you the number of clients that have come to us and they've copy pasted from their website, gotten their listing up and running, but they're wondering why are we getting no traffic?

Daniela:

Why are we getting no sales? Well, if people can't find you on Amazon, it's most likely because you haven't done your SEO research. So that's the first step, right? And so there's a number of different tools that are out there that can help you get this data quick. And then once you start running your advertising later, you can then optimize even further. But 80% of the work can be done in advance with lots of different tools. You really only need a couple of them, but they all kind of do the same thing, right? Helium 10, Jungle Scout, Viral Launch, all of these great tools will basically help you do all of this research, aggregate it into some sort of spreadsheet, and then figure out which keywords are most relevant so you can infuse it into your listing copy.

Brett:

Yeah, I love this. And I don't want to give away the other two steps, right, but I love the simplicity of thinking about it this way, that there are really kind of three things to do here. Because if you are not selling what you want to be selling, if you're not growing at the pace you think you should be growing, it really is going to come down to one of these three things. Right? And then, there could be dozens of, or hundreds of little tweaks or things you could do related to each one, but think about this in big topics, I think really helps you know what kind of action to take.

Brett:

And so, yeah, the first step is, are you found, right? Amazon is a huge marketplace. And primarily, people still interact with it by searching, by using search queries to find the product they want. So if you are not being found, then nothing else really matters. So our first step is kind of identifying keywords by using these tools. And yeah, we like to use kind of a combo of those. I think maybe the favorite at OMG Commerce is Helium 10, but I love the other ones as well.

Daniela:

We actually just switched to Helium 10, to shout out to them. But we actually use a combination. We like to do a two-step process of a reverse ASIN first. And we do that-

Brett:

Can you explain what that is for those don't know?

Daniela:

Yeah, so a reverse ASIN is basically a little bit of a cheat code, right? So with a tool like WordTree, or any of these other tools too, we use WordTree for this one, but we'll go and grab the ASIN, which is the specific SKU number that Amazon is giving your product that shows up in your URL and on your listing. But that ASIN and your competitor's ASINs, let's say, up to 10 of them, you can drop into this tool, and it'll go and scrape their listing and tell you which words are most frequently used on those listings, which ones are used in common across the listings, and which ones of those would be most relevant in terms of volume and density of search.

Daniela:

So those that's really the first step that we take. And the reason why we do that first is because we just need something quick, and a base to go off of when we're doing the listing copy. Because when we're writing the copy, initially, we're really writing the listing with a sales-forward approach, right? We're writing it in the tone and feel of the brand. And then we want to use persuasive sales copy throughout. And then we want to infuse a base of keywords initially that it is going to be our competitor round up in that reverse ASIN search. And then once we have that, we'll go through and do a second pass with the deeper dive of SEO research that we've done within one of those other tools, like a Helium 10.

Brett:

Nice. And so would you do that second pass of SEO research, that's after launching the listing or that's before ...

Daniela:

No, no, no. That's before. It's all before. But it's just our process, because when you're working with our team, we're dealing with multiple people. We have a person that's just doing SEO research and a person that's a professional copywriter, and those two minds have to come together. And so that's the process we came up with to help them have their meeting of the mind.

Brett:

It's really smart, and, typically, someone who's a great copywriter doesn't want to be confined to the world of keywords to a certain degree, and then someone who's into keywords is a little more analytical. And so yeah, a process to get those two to come together is critical.

Daniela:

Right. And the client, at the end of the day, they just want their product to sound like their product. They don't want all these weird keywords in there, even though that's what helps you get found. So you do have to have that mindset going into it. Cool.

Brett:

Now, do you have any advice, so that's if you're launching, right? And I know the process is similar if you're just optimizing, but take a seller who is already established on Amazon. What should they be considering or looking at here to see, but maybe they're not being found like they would like to be, what would the process look like for them?

Daniela:

Okay. So they should still do the same process. There's a caveat here, though. If you're already selling well, which you're saying they're not, but if they are, you have to be careful about how much you are updating your listing and where you're updating your listing. Because if you're a seasoned seller, you've likely already been indexed by Amazon throughout your listing. So you don't really want to change too much. And when you do make changes, you want to make them sparingly, and in places that won't de-index your entire listing. So that being said, that would be like, let's say, you have title that's performing well. You would put maybe some extra keywords that you see are converting from your search term reports in the back side of the title. You wouldn't just-

Brett:

Right. Keeping the title mostly intact. You're just adding to the end of it.

Daniela:

Yeah. Don't delete the whole title and then put in a new one. Leave the title, maybe delete some of the extra words that you weren't finding relevant or weren't seeing conversions on, and then replace them with some other keywords that you're trying to rank for, right? Same thing in the bullets. Back end, yeah, same thing. So, now, let's say you're not selling well. If you're-

Brett:

Well, just as a quick note, if you're selling, then the rule number one should be, goal number one should be do no harm, right? Let's not go backwards. Let's take little tweaks, little iterations, to hopefully gain some momentum.

Daniela:

So what we do, actually, on seasoned sellers is we'll do a reverse ASIN on their listing, and we'll just try to find out, okay, what are they ranking well for, don't touch any of that. And actually, there's a good amount of brands that came to us last year during COVID, when they were switching their budgets from in-store to online. They basically said, "We've been selling on Amazon, but we've been neglecting it. So we want to double down and refresh our listings." And so we had to take that approach with a lot of clients. We had to just play it safe in certain areas. And then for some clients, they just weren't performing well after a while, because new competitors enter the marketplace, they didn't really keep their listings fresh, or maybe they didn't update it, or looking at your search terms reports to see what is converting and then adding it back into your listing. It's just that ongoing maintenance stuff.

Brett:

How often should you do that? So if you're not keeping it up to date, is that a monthly, is that a weekly, what would you typically recommend for adding keywords back in?

Daniela:

If you're running a significant number of ads, I guess it would depend on your ad spend, right? If you're running tens of thousands of dollars of ads, I wouldn't see why you wouldn't do it monthly. And that's a simple thing that your ads manager could probably pass off to you so you can update into your listing or that they can manage for you.

Brett:

Totally. Yeah. And so as an ad management company, we do the same thing with campaigns, right? We're looking at doing broad match or phrase match and finding, converting keywords and adding those back into the campaigns at the ad level, to further optimize and perform. But it totally makes sense to then add those back into the listings, as it makes sense. Obviously, there are space limitations to a certain degree and stuff like that.

Daniela:

And then there's certain brands that come to us and like you said, they're not selling well at all. And in that case, it's just a matter of ripping off the bandaid and just doing a clean refresh.

Brett:

Yeah. Can't really hurt it if it's broken already. So let's make bigger movements. Yeah. If something is broken, making little tweaks isn't going to get you there, right? That's too slow of a road. You need to make more dramatic changes at that point. Yeah. Awesome. Okay.

Daniela:

Yeah. So in that case, we'll update copy, we'll update graphics, we'll update everything across the board and just won't even look back.

Brett:

Cool. Now I know, back in the day, the priority was product title, then bullet points, then back end keywords. Is that kind of still the same priority order or anything you would add to that?

Daniela:

So we do backend search terms and subject matter, because we found in certain categories, subject matter is indexing. But yes, title first, obviously.

Brett:

Cool. Cool. Awesome. Great. So step one, getting found. What's step number two?

Daniela:

Step two is the fun one. It's the one nobody likes to talk about for some reason. It's the one that's-

Brett:

I don't hear many people talking about this, but it's so important.

Daniela:

Honestly, it's the lowest hanging fruit in the Amazon marketplace. I feel like it's the neglected piece that can make such a big difference. And we worked with a company brand called YES Bar. And within two weeks, they saw an 11.8% increase in clickthrough traffic. And so that's just one emerging brand. Imagine if you have a larger portfolio, the returns on that. It's huge. So what does this mean?

Brett:

And Amazon loves that increased clickthrough, right? I mean, that is music to their ears. Obviously, increased conversion rates really music to their ears. But if you're clicking, you're going to get more conversions. You're going to move up in the rankings. It's a no brainer.

Daniela:

Yeah. So this one's a fun one. It's actually my favorite one to work on, because I feel like this is a thing that everyone can do. This is a thing that it doesn't cost you very much, and you can see significant gains from it. So what this is is basically when you show up in the search results and you see your product next to everyone else's, what can you do to your main image to make sure that people are looking at you first and then clicking on you, right? Yes, price. Yes, reviews. All of that, that happens over time, but you don't get that right away. So what can you do right now to make sure that people are clicking on your listing, right? And so in the case of YES Bar, let's just break down what we did for them, right?

Daniela:

So what they had was a beautiful image. It was a case pack of their product with a stacked closeup of the snack bar. The problem with it was there was a lot of white space around the edge. So it looked smaller than everyone else's products in the search results. And it was kind of diluted in terms of resolution, so it wasn't popping off the page. It didn't look crisp and clear, and it didn't draw the eye, right? They did have what I would call eye candy, which is the closeup of the snack, right, which, anytime you can add eye candy, it's a win. So I always recommend adding some kind of eye candy and a post-edit, if necessary, to clarify the purchase. So a post-edit would be something like showing is it a six-pack or is it a twelve-pack, right? Or is it-

Brett:

So calling that out with superimposed text or some kind of little graphic or something.

Daniela:

Yeah. And here's where you have to be careful, right? Because, you're not trying to manipulate the buyer. You're trying to aid the buyer in the process. And so that's what it comes down to in the Amazon world. Amazon wants to know if you're aiding the buyer or manipulating the buyer. You never want to be manipulating the buyer. You never want to show something in the photo that's actually not going to show up to the consumer. You never want to make your product look so fake that when people get it, they're like, " This isn't what I ordered." So renders are a touchy subject. We do renders. I think, personally, some products just show better in renders than they do in photos, so we do very, very realistic renders on a lot of products and have seen increased performance.

Daniela:

So in that case, in the case of YES Bar, you would have a version that's polished of the case pack that is taking up the full frame of the photo, that has a post-edit showing how many bars are in there, that has a post-edit showing the main things that people are searching for in relation to that product. So is it vegan? How many grams of protein, or whatever the things are, right, put that on the box. And then a super crystal clear closeup of those snacks so people can see what they're actually getting, because with food, people want to, they want to taste it. They want to smell it.

Daniela:

The next closest thing is you have to show them a closeup. And then how do you make sure that all of that on the page is working together and it's enticing people to look and click on your product? So, that's where you can have a little bit of fun with this. It's a creative process. So what we do is we come up with two, maybe three different variations of what we think could be interesting. We'll go and look at different categories to get some ideas. We'll look at their exact competitors to see what's showing up in search. And then we'll just do really low fidelity testing on a tool like PickFu, which if use the code-

Brett:

PickFu is a great tool. I know those guys they were actually on the podcast. It's been about a year.

Daniela:

Yeah. And FYI, if you use the code, I think it's PickFu MG, you get 50% off your first poll because we're an ambassador agency and we love them. But we actually run this with almost, I think, every single client project that comes in, because it has such huge benefits. So we'll run a split test.

Brett:

And so quick explanation, you can go back and listen to the PickFu episode if you want to, but, basically, you're submitting images and real people are reviewing them and giving you feedback. And so it's a way to get feedback on images-

Daniela:

Amazon shoppers.

Brett:

Yeah, Amazon shoppers.

Daniela:

Amazon Prime members. You can target Amazon Prime members. You can target within your very specific audience, too. So if you have a pet product, you can target pet owners. Baby product, parents. You can target by age, you can target by gender, everything. It's phenomenal, and you get the results usually within an hour, which is fantastic.

Brett:

Yeah, it's so cool. And I love this step, this getting clicks and really focusing on the image, because this is really all about merchandising, right? If we're thinking about the digital shelf, we have to think more like, and this is, I think, one of the things that's lost with a lot of digital marketers, is we maybe get too nerdy and too focused on SEO and rankings and algorithms and keywords, and all those are important, right? I've been doing SEO since 2004. I love it. But we got to think like the consumer, right? This is comparison shopping on a digital shelf, and appearances matter big time. And so remembering that someone is trying to solve a problem or trying to meet a need or fulfill a desire or whatever, and how does the image communicate that and show that? Exactly. That's why we simplified this process into get found, which is SEO, get clicks, which is your main image, and then get sales, which is everything inside the listing. Right? And what sells, is imagery. I think there was a stat that said 90% of what we take in as humans is visual, right? So if you're looking at a listing and you're trying to understand if you want to buy something, you better be enticing people through all of the visuals, right?

Brett:

Yeah. So, fully agree. The image is so important. And you mentioned YES Bar. I'll mention a competitor, just because I think what's interesting about this company is a lot of the innovation is with packaging and simplicity. So if you look at RXBARs, right, which they've now become popular, you can buy at Walmart or whatever. What's that?

Daniela:

That's solid branding, right there.

Brett:

Solid branding. And what was their innovation? They put three or four ingredients, they put it on the front of the package. It's three dates, two almonds, three egg whites, that's it, right? And so wow, how cool is that? Very simple, very visual, and it works, right? That's why I bought the product in the first place. Then I heard the whole brand story and it's cool, and the product is great.

Brett:

But, yeah, think about visual merchandising, right? We talk about this a lot. We do a lot of Google traffic and Google shopping. We're a big Google shopping agency. And we run into this all the time with Google shopping. Clients will come to us and say, "Our products are showing up in Google shopping, but we're not getting the return or the volume we need." And I just had a skincare company that we started working with recently, and their product packaging is black and they put the product on a black background. Okay. Well this is not going to sound like rocket science, but I think we found the biggest problem here, and it's people can't see what they're clicking. Anyway. So it's simple stuff like that. Merchandising is super important. So, that's fantastic. Any other tips or suggestions? I love the PickFu example. I love the call out ...

Daniela:

Do the split test. I mean, really, within that step, we broke down all the things that we do, like with the post-edits, with the eye candy, all the different types of eye candy. We actually have all of this in little tutorials inside of our mini course on our website. It's called launchreadylistings.com. But yeah, it's 37 bucks. And literally every single thing that we're talking about right now, there's little tutorials that go with everything. So if anyone wants to do this themselves and doesn't want to hire us, there you go.

Brett:

Sweet. 37 bucks, can't beat that. I'll link to that in the show notes as well. What's at URL one more time before we go to step number three?

Daniela:

Launchreadylistings.com. And actually, we train our designers on that, too. So other designers could be doing this.

Brett:

So hey, if you ... internally, means it's legit. That's right. So I did a YouTube course with Ezra Firestone. We send all our new YouTube specialists through that course. We believe in it. So it's good stuff. Eat your own dog food, right? What was that, a Purina thing or something? They literally had people eat their own dog food. Anyway.

Daniela:

I would not eat Purina. Sorry, Purina.

Brett:

And then Google adopted that though, too. They always say their thing is say, do we eat our own dog food, do we test our own products and stuff? Anyway. It's a bit of a rabbit trail there. Okay. So we got get found, get the click. What's step three?

Daniela:

Step three is once you've gotten them inside your listing, how are you getting those shoppers to convert, right? And so this is a matter of figuring out what are the types of graphics and persuasive copy that need to be layered in a show and tell format. Some people call it lifestyle infographics, but it's basically, what is the way that you're visually showing, and telling at the same time, the same thing that you're trying to say in your bullets, right? Because people can skim the bullets and that's what they probably do, but they're not sitting there and reading every single thing that you're putting in your listing, right? So you really want to make sure-

Brett:

They're scanning, right? They're scanning and looking for answers to questions or looking for something to kind of jump out at them. And then maybe they're ...

Daniela:

Right. They're skimming. Yeah. So it's really a matter of going through every single thing that you're trying to say, and trying to think of how you're going to visually show that on your listing.

Brett:

So I love this, too. And again, let's take an offline example or metaphor here. So I'm in the store and now I've picked something off the shelf, right? The packaging did enough to make me want to pick it up off the shelf. Now I'm examining it more closer, right, or I'm pulling this item of clothing off the rack or whatever. So I'm digging a little bit deeper. So, that's the PDP. That's the product detail page. What are you doing to close the deal, to seal the deal? And it really is what questions do people have? What use case are they going to be using product like that?

Daniela:

Right. Answer every single question they could possibly have. So an example, any food product, the first question people have right now is what the heck is in this? That's what everyone wants to know. What do most brands do? They upload a photo of the back of the bag that is really crappy quality, can barely read it, and even if you zoom in, you're like, "Oh, this looks terrible." It just looks terrible. So what can you do? You can call out every single ingredient. Let's say you have a clean label. YES Bar is actually a good example. They have very simple ingredients in their label. Just list it out and make it so easy for people. This is the only stuff in our product. If you want the nutritional facts, it's right here next to it.

Daniela:

And by the way, it falls into all of these dietary categories. If you're looking for paleo, if you're looking for this, that. Put little icons so that people can easily understand what this is and what it isn't, right? Those are the questions that people want to know right up front. So if you know those things about your consumer, think through those and figure out how you're going to address all of those at once, right? So, that's your product images on the left. Some of the things that I see that's really powerful for brands that you could be doing is an us versus them image. Those are super powerful on Amazon, right? Because you're saying, "We only have these things in our product. Other brands do all of this, which is icky."

Daniela:

So it's like, we're better. Here's why. So how can you visually show this? The other thing is helping people identify with your product. So people want to see themselves. They want to identify in some kind of way, right? So is this a product for moms? Let's show some moms. Is this a product for dads? Let's show some dads. Let's have fun and show people. And you don't have to have an expensive photo shoot to do this stuff. There's incredible stock photography sites that you can pull from to create these very realistic images of people holding your product and using your product to help people identify with your product.

Daniela:

So product in use. So showing is there specifics on how to build this, how to clean it, how to assemble it? Whatever the things are, write a list of all the things, narrow it down to the top six, make beautiful image that show and tell at the same time. What I see often is either people uploading just stock images on white of every angle of their product, which I don't understand why people do that.

Daniela:

Or we see people uploading a bunch of lifestyle images that don't tell you anything, which it's cool. It's pretty. Okay, it's probably on your Instagram, too. But it doesn't tell the shopper anything. And the shopper has questions that need to be answered. So layer some text on there and get it done. So, that's product images. And then when you scroll below the fold, for anyone that doesn't know what that means, it's basically when you scroll down on the Amazon listing and you don't see the product images at the top anymore, there is one more section that brands can take advantage of that's called well, it's called A+ content. You can get it if you're a registered brand with Amazon, which basically means you have a trademark or you have a trademark pending. And so if you get access to this, you can basically upload an entire nother section of beautiful imagery to help sell your product.

Daniela:

Amazon themselves has said that this section alone can lift your sales by 5% or more. And that's taking into consideration even the brands that are not doing it great. And then there was a study that came out a week or two ago, I think it was DataHawk or somebody said that they were seeing, I think it was 20 to 200% increase in sales lift from brands going from zero to adding A+ content. So, I mean, that's super powerful and this is an analysis across hundreds of thousands of listings.

Daniela:

So I mean, A+ content is something that I feel like every brand should be doing. I think that there's brands that do it well and don't do it well. What I'd recommend doing is, or what we do, is we do basically stacking these huge banners, one on top of the next, to create a landing-page-like effect, rather than doing all of the other Amazon modules that are really text heavy, and then it feels very hodgepodgey. So if you want to see examples of this, actually, it's all over our website. And actually, Amazon recently created a guide from some of the work that we did with a brand called Bowery Farming. And they actually highlighted all of these things that we're talking about today in terms of showing and telling with your graphics and using big banners, and that was pretty exciting.

Brett:

Yeah. I love this so much. And one of the things I heard long ago in a marketing course or from a really sharp marketing person was, going back to images, the saying is an image speaks 1,000 words, right? An image is worth 1,000 words, but the key is what thousand words? What are you trying to communicate? And I think a lot of people don't think about their photo enough to say, "Okay, what am I trying to accomplish with this photo?" Because I think, to your point, people either go, "Hey, it's just a plain old image of the product," or it's just a lifestyle image, and we have no idea what this means. It's a family in their front yard. What are they doing? Where you really need to see, show me the product in action.

Brett:

Show me that it will hold up in this use case. Show it doing what I want it to do. And so, yeah, you got to tell a story with those photos and then also with A+ content. And we see this a lot, too, as we're evaluating. I think just a lot of people, and I don't want to say lazy, although I think that's sometimes it. We're spoiled, because Amazon has so much traffic. And if you have decent reviews and okay images, you'll sell on Amazon. But if you think about this like merchandising and like someone building a brand, you can do so much better. If you maximize all these spaces, your six product images, your A+ content, your bullet points, get it all working together, man, it can have a huge, huge impact.

Daniela:

The other thing is that, remember, there's still a camp of people out there that are very anti-Amazon. And so those people may never shop on Amazon. But as there's more negative press out there about Amazon, there's ways that you can counter that and help educate people around you that you are a brand in this neighborhood, who is creating this product and selling it on Amazon, so it is your livelihood, right? And so I notice a lot of people kind of hide behind their product and are afraid to put themselves out there and say, "Hey, we're a female-owned business. We support animal welfare." This, that, and the other, right? But that kind of stuff is so powerful for the end consumer, for the shopper to know that there's a real human behind this that has a family, that's supporting other families, and they care about these things in the world. And that makes the buying process feel so much better than just I'm shopping on Amazon. Right?

Brett:

It does, yeah. And, excuse me, especially when you do everything else right as well, right? You've got good images and a good headline, and you look at and you think, "I want this product." Then when you can marry that with this is a female-led company and we're focused on these initiatives, or we've got these environmental initiatives where we're doing 1% for the planet or whatnot, then that makes you feel so good about making the purchase.

Brett:

I think you can't lean too much into that. If your listing is broken or if you got bad reviews or other things, then that doesn't matter. But if you can add that on top of everything else being great, it's fantastic. And I love how business is moving in that responsible way and kind of cause-driven marketing. I do enjoy that. I'm glad that's happening and that's a trend. Awesome. Cool. So we got these three ways. So being found, getting the click, getting the conversion. Anything else you would add to that, kind of as we're wrapping up? And it's perfect to have three, but any other tips, suggestions, ideas, anything else you would add to that?

Daniela:

Well, I know anyone listening is probably wondering what about storefronts? So I will say that a couple things that we're really excited about with storefronts recently is that Amazon has this feature called background videos, which I don't know if you've had a chance to play around with those at all, but you can have up to four of them on your product page or, sorry, on your storefront. And I hope they roll this out to A+ content, because I think it's a really engaging way to shop, and I think it's a lot of fun.

Daniela:

But YES Bar's storefront is a really great example. We put two of them in there. You can have up to four. But they basically are videos playing with no sound that just are on a loop. So what we did is we created these animated gifs and play them as a video. And it's just this really fun, engaging content to break up all the static, still images that are on the page, right? And so you're able to kind of reengage the shopper and keep them in that environment, and tell them all the things that you want to tell them before they're getting to the next section. So, love that.

Brett:

Yeah, this looks fantastic. I'm looking at the YES Bar-

Daniela:

People forget about media mentions.

Brett:

I'm looking at the YES Bar storefront right now. Really great. Such fun branding.

Daniela:

Really fun, right?

Brett:

Yes, I see those videos ...

Daniela:

Their name is a mantra, so we just went with it and had a lot of fun. People forget about media mentions. If you have media mentions within 18 months, you can put up to four of those in your A+ content, and I don't think there's a limit on storefront. So you might have to put a little footnote to get it approved by Amazon to say when the most recent publication was, but they have to be within 18 months, and then you can put up to four of them in your A+ content, and what a great way to build trust and validate for the shopper. So that's huge. I always recommend doing that. And this is a little iffy, but we always try to build a testimonial image into the product images. So that's a little fun bonus one for you.

Brett:

Yeah. So putting an actual review, or a customer saying something in the images.

Daniela:

Yeah. And I think this is a wishy-washy area, because sometimes Amazon says you're not allowed to have testimonials. But we've gotten feedback from Amazon that you can, as long as it's verifiable in your comments, in the reviews. So if it's a real Amazon shopper's review and that's in your reviews, just take the tidbit that you love and build it into a beautiful testimonial image so people see it right when they hit your page. They don't have to scroll all the way down. Because you know everyone, once they get a couple questions answered, they just scroll right down to those reviews. So give it to them. Yeah.

Brett:

Awesome. Well, Daniela, this has been fantastic. Your company, Mindful Goods, mindfulgoods.co, check it out. I'll link to it in the show notes as well. But why don't you, one more time, talk about that course. Sounds like an amazing value and a great way to dive in. And then any other ways for people to connect with you, who you work with, that type of thing.

Daniela:

Sure. So this is for the DIY brand-builders out there, any designers at agencies that are looking to pick up more Amazon work. This is a great little mini course that we created with our exact three-step process and tutorials for all the process to show you how we do this. It's at launchreadylistings.com and it's just $37. So you can't beat that.

Brett:

Cannot beat it. All right, Daniela, thank you so much. This has been a ton of fun.

Daniela:

Thank you.

Brett:

Highly insightful and motivating, as well.

Daniela:

Thanks so much.

Brett:

Awesome. Thanks, Daniela. And thank you for tuning in. We'd love to hear back from you. Let us know what you like about the show. Give us some topic suggestions, connect with us on the socials. Also, if you find this episode helpful, share it with a friend. Don't be bashful. Let's get other people involved in the show as well. And with that, until next time, thank you for listening.

‍

In the first half of 2021 alone, $2.5 billion in capital has been raise by brand aggregators all looking to acquire eCommerce brands.  

Currently there are over 100 aggregators just in the eCommerce space. A few months ago, I met Dave Bunch at Ezra Firestone’s Blue Ribbon Mastermind in Miami. We were both speaking there and when I heard his story, I knew I wanted him to be on the podcast. Dave is the President of Growve a $250 Million dollar aggregator with close to 25 brands under one roof.  

So why the rise of aggregators? What makes that business model so attractive? Why are brands selling to aggregators? Those are all questions I wanted to ask Dave.  

Here’s a look at what we talk about:

• Why right now might be a good time to take some chips off the table
• The benefits of rolling equity vs. full buyouts
• Why you should be weary of large offers
• When deals go bad - how to better prepare for the issues that always arise when closing deals
• What’s the end game for aggregators including going public through SPACs, selling to Private Equity and selling to strategic investors

‍

Mentioned in this Episode:

- Dave Bunch
- Via LinkedIn
- Website
- Facebook

MENTIONED - in interview order
Blue Ribbon Mastermind
Ezra Firestone
Moiz Ali
Native Cosmetics
Procter & Gamble

Brett:

Well, hello and welcome to another edition of the eCommerce Evolution Podcast. I'm your host, Brett Curry CEO of OMG Commerce. And today we are talking about the rise of aggregators. And if you're not familiar with the space that may sound like the name of a Star Wars movie or something like that, the rise of the aggregator. But it's a really important topic and aggregators are certainly not evil. It's not like the Empire, these guys, most of them good.

Brett:

So I think this is just such an interesting time in the e-commerce space, where good time to potentially sell if you're a brand. Good time to partner with an aggregator, all kinds of interesting things to consider. This episode of the eCommerce Evolution Podcast is brought to you by OMG Commerce Resources. That's right here at OMG Commerce, we want to help make sure you're educated and in-the-know to capitalize on the latest tips, tricks, and strategies to help you grow your e-commerce business.

Brett:

So if you go to omgcommerce.com and under Resources, click on Guides, we have some cutting edge free information for you on things like, how to dominate with Amazon DSP ads or how to use Amazon sponsor brand video ads, and how to craft the perfect ad. We have several guides on how to capitalize on YouTube ads, from creating the perfect ad to knowing when you're ready to scale. Plus there's the newly updated Google Shopping guide, plus more. Check it all out at omgcommerce.com and click on Guides under Resources. And now back to the show.

Brett:

I get to meet my guest today, Mr. Dave Bunch at Blue Ribbon Miami. So as a Firestone's event, he and I were both speaking at the event. And Dave just had such a wonderful presentation, really down to earth, super smart guy. So Dave is the president of Growve and that's G-R-O-W-V-E. Fantastic aggregators, just growing like crazy and has a wonderful reputation of being just a great group to work for and to work with. So I wanted to pick Dave's brand. I want to know more about aggregators as well and more about what these guys think about the space of e-commerce and where we are right now. So with that, Dave, welcome to the show and thanks for taking the time.

Dave:

Yeah. Thanks Brett. Yeah, appreciate it. It was fun meeting you at Blue Ribbon and getting to know you better and we've admired you and what you're doing as well. And it's great to be on with you today.

Brett:

Thanks man. And we both have an affinity. We have large families, correct? How many kids do you have?

Dave:

That's right. I think you've got me beat. I have seven ... Oldest is 23 and youngest is seven. So our house is always a house full, but we love it. At least I do. For sure.

Brett:

Yeah, we do too. So we've got eight. Our age range is almost identical to that. You're just about three years ahead of me, but 19 and four are oldest and youngest at the Curry household. So it is crazy times always.

Dave:

Yeah. And I've always told people once you have a few, it's almost the same. So people say that's got to be hard, but once you have two or three, it's about the same as having seven.

Brett:

You have to start buying bigger vehicles, bigger washing machines, bigger house. But there is the benefit... So I did notice for sure, after six, seven and eight, I don't know, didn't notice. But the older kids do help with the younger kids. That's a selling point...

Dave:

That is true.

Brett:

...for large families, which is nice. So we didn't come here and talk about big families. Although there probably there's a correlation between having a big families and running a brand aggregator. I would think there's somewhat similar. Lots of brand children running around as well. But before we talk about Growve and what you're doing now, Dave, you've got a pretty awesome background. So first of all, kind of tell us where you're from and then tell us the pre-aggregator story briefly of kind of what your background is.

Dave:

Yeah, sure. So I grew up in Utah, I'm based there just in the Salt Lake City area. And pre-Growve, I did my education at Utah State, then did an MBA at Brigham Young University. And started in 1999, so I'm getting up there, I'm pretty old. But started for another aggregator called Nutraceutical. And Nutraceutical was an aggregator in the health food specialty channel.

Dave:

There's lots of mom and pop health food stores throughout the country. And there was a consolidation occurring within the brands and it's ongoing today. So we felt like at the time there was opportunity to go in and buy a lot of these brands and bring them together. And we can talk today about some of the reasons behind that.

Dave:

But I was there for 21 years, led the M&A team. We did almost 60 acquisitions while I was there. For most of the time, we were publicly traded on the NASDAQ. We ended up being acquired by private equity in 2017. Then in 2019, our private equity firm sold 40% to a couple other private equity groups. At that time, the valuation was just under 650 million. And at that point I decided, if I'm going to do something a little bit more entrepreneurial, that it was the time to make a jump and wanted to stay in aggregation and in kind of the same industry, but something where I had even more decision making and in a place that's more e-commerce focused, maybe than Nutraceutical was at the time.

Brett:

Yeah. That's great. What a cool story. So I do want to look at why is the aggregator model so popular, but I guess for those that don't know what is an aggregator... And is an aggregator just a private equity group or is it different animal? So what is it? Then why are they so popular right now? Or is just, maybe they're getting more press and more air time right now?

Dave:

Yeah. And I think if you, if you go throughout almost any industry, there is consolidation that takes place as big companies come in and say, "Well, if I can group together several brands, there's an opportunity, there's a savings," because there's duplication in a lot of different functions-

Brett:

Centralized operations. So there's some cost cutting, cost saving measures that you can take.

Dave:

Absolutely. Then just bringing in maybe a high level of expertise in running a business and the efficiencies that come from that. So if you go throughout time and you look at industries, consolidation happens and right now, if you look at the Amazon world in particular, there's over a million and a half active sellers on Amazon. So it's very fragmented. There's lots and lots of Amazon sellers. And most of us know many of them, and they're doing a great job. And they're actually, in many ways, outperforming a lot of the large consumer product companies.

Dave:

As things move more e-commerce, bigger companies like Growve and others are looking at, here's an opportunity to come in and to do some consolidation and realize some savings and also provide some expertise to these brand owners that they're good at very good at Amazon, but there's some other areas that they may not know as well. If you look at things like traditional retail and diversifying off of Amazon. So companies like us can come in and provide some additional expertise. There's several reasons to do it.

Brett:

Yeah. It makes sense. So consolidation is beneficial because of cost savings because of leverage expertise. It just happens in industries where there's a lot of growth and where they're maturing a little bit. But then what's the exit or what's the bit of the endgame for an aggregator, isn't it meant to kind of either package up groups of brands and sell them to someone else or sell off the whole portfolio? Talk through that a little bit. What is attractive at the endgame with an aggregator?

Dave:

Sure. Yeah. And if just on aggregators themselves, if you look at... And I added up, I've got a list and I know of over a hundred aggregators...

Brett:

Just in the e-commerce space.

Dave:

...that are specifically focused... Just in e-commerce, primarily Amazon, but D2C e-commerce brands as well. And there's been a lot of money raised, there's a MarketPulse article recently that suggested in the last quarter, four months that two and a half billion has been brought in terms of capital into these aggregators ...

Brett:

Over what time period?

Dave:

Just the last four months. Yeah. So lots of money right now. So aggregators are getting the intention of a lot of investors and they're raising a lot of money at this point.

Dave:

So as aggregators, think about it, what's the endgame for an aggregator? And there's a number of things. One possible exit could be going public through a traditional IPO or a SPAC. SPACs have been kind of the buzzword-

Brett:

And that's a special acquisition corporation or company?

Dave:

Yeah. That's right. So it's a way to go public in a little different manner than a traditional IPO. That's a possibility. Another is you're going to see aggregators gobbling up other aggregators. At some point there's going to be aggregators that succeed and some that go away over the next few years. Definitely is not going to be the number that we're seeing today. The other thing is-

Brett:

It looks ... quickly and not to get us too off track, but those that fail is it going to be because potentially they're over leveraged and they don't gain those operational efficiencies or growth expertise or things like that? A failed aggregator, is it like a leverage problem typically? Or what would be your thoughts there?

Dave:

Yeah. It could be that. I also think just having the right team and really being able to manage the brands. It's challenging. In concept, it sounds like a good idea. The growth is coming from e-commerce, let's grab some brands and bring them together, but then running of them, it can be challenging. And do you have the right team in place to really grow them? So I think a lot are raising money based on a concept. The question is, are they going to actually be able to perform?

Brett:

And it is essentially we're kind of joking around. We accidentally kind of made the comparison of having a big family, lots of kids and being an aggregator, but you're bringing on these brands and into your group and they'll have different personalities and they have different teams and they have different styles. M&A is messy. It could be very good, very lucrative, but it's not just cut and dry, like, "Oh yeah, course. We buy this brand, save some money. Bingo. We're making money." It's complex.

Dave:

Yeah. And think about it too, a lot of aggregators, they buy the company's outright, then the founders who are passionate about their brands, they go their separate ways. So how do you replicate that passion? ...

Brett:

That entrepreneurial energy, the product design, the creativity. Keeping that founder around really makes a lot of sense, for sure. So cool. That was a little bit of a tangent, it was related.

Brett:

So exits, we can go public through a SPAC. Aggregators will buy other aggregators, because some aggregators will fail. Talk about additional exits or endgame.

Dave:

Yeah. A few others would be private equity groups are very interested in acquiring aggregators and adding them to their portfolios. Then another, and we've had interest from some of these groups as well is strategics, especially for aggregators that are focused on certain categories. Strategic may come in. Because if you look at some of these traditional CPG companies, they are having a hard time, they're not growing they're not seeing the growth from the e-commerce. They're seeing these 1.6 million Amazon...

Brett:

That are kicking their butt ...

Dave:

...outperform them. Yeah. They're interested and they want buy and they want to gain that expertise. So they're another option in terms of an exit for an aggregator, especially ones that focus on specific categories.

Brett:

Totally makes sense. We saw that recently. Actually, we get to hear him at Blue Ribbon, but Moiz Ali's a friend of mine, Native is a long time client of OMG. But that was a similar thing. Native built up this amazing direct-to-consumer natural deodorant brand. And they've since added body wash and toothpaste and sunscreen and some other cool stuff coming your way. But that was a strategic buy on P&G's part. P&G was thinking about building their own and they actually ended up doing that, but they wanted to strategically acquire Native for over a hundred million dollars. So it worked pretty well for Moiz and company, and it has worked great for P&G as well.

Brett:

So totally makes sense. Well, let's do this Dave, lots more questions about aggregators in general, but I want to talk about Growve specifically. So what do you guys do? Where do you focus and how are you guys different than maybe the average aggregator, if there is.

Dave:

Sure. So maybe starting out with where we're focused and just high level kind of where we're at today. We have 24 brands, or we will by the end of June. We're closing on four companies this month. We're about 250 million in revenue, close to 50 million of EBITDA. We're actually out and doing it and we have a proven track record. So we've done 13 acquisitions and 12 of the 13 are up. We can go to potential companies we were looking at acquiring and said, "Look what we've done historically in really growing businesses."

Dave:

But we're where we focus our time is... A lot of aggregators are agnostic and they'll buy almost anything. And for us, we decided fairly early on that we wanted to be focused on certain verticals. And that way we could kind of build our backend in all of our team around those categories. Then, like we talked about before, if we're more focused, we felt like an outcome selling to strategic would make more sense because the strategic doesn't want something that is participating in every category.

Brett:

Well, also, we go back to kind of the first thing we talked about, economies of scale and shared operations and leveraging expertise. Both of those are more effective if you're focused in a specific category versus you've got brands that are all over the place.

Dave:

Yeah, absolutely. So the six verticals that we're participating in, dietary supplements, pet nutrition, kind of personal care and beauty, healthy foods, active nutrition and kind of sports nutrition. Then we have household items, hard goods, but that are related to wellness and beauty.

Brett:

Got it.

Dave:

So if something falls in there, we have interest and we get lots of inquiries from companies and it gets tempting, "Oh, this is a cool business, but it's not in one of our verticals." And in those cases, we'll pass them off or give them references to other aggregators or other businesses that might be interested, but we've really tried to stay disciplined, even though it can be tempting at times because there's a lot of cool businesses and a lot of verticals.

Brett:

No doubt. Once you get pretty good at this process, you're good at the M&A process, you begin to see the potential in a brand that's maybe outside these categories and you're like, "Oh man. But if I just had a hold of that, I could make it grow." But just like with anything, discipline pays off. And for every potential home run, you might get by being undisciplined, you're going to have some stumbles and falls and some pain if you're not disciplined there. That's great.

Brett:

So looking at a couple things, recently, and this was probably just people that I'm hanging out with, but I think this was happening more and more, we're seeing people take exits or partial exits, I should say. So at Blue Ribbon Miami, this was one of the topics and several people on stage, several, which are actually clients of ours were just recently sold part of their equity. So they're taking some chips off the table now, but they're rolling equity and they're looking for an exit later. So kind of talk about what that structure typically looks like and kind of how you approach this with Growve, because you kind of alluded to it a little bit ago, right? Keeping the founder on, keeping that creative vision, that entrepreneurial energy, that product design genius, whatever that might be. What does that usually look like when Growve is acquiring?

Dave:

Yeah, sure. Because there's really a couple of options. There's a lot of aggregators that'll buy you out a 100% and that's probably more of the standard model, including from the biggest. Then you have the option of just kind of running your business and growing it on your own. And we made the decision early on that we wanted to be more of a hybrid. An approach where an owner could take some money off the table, de-risk themselves, but then also participate in the upside.

Dave:

So we allow founders to roll equity in their businesses and stay involved. And there's a few reasons they may want to do that. One, it allows them to de-risk but also capture some of the upside. As an aggregator, we believe that we can help brands grow through our expertise and the services that we provide and accelerate that in a way that they may not be able to do on their own.

Dave:

Then in most cases, we also think that brands will get a higher valuation by being part of Growve than they would on their own. And in most cases we think significant and we allow them to share in that upside. So some aggregators, they want to buy out a 100% because they want to capture all the upside and we say, "We're okay in sharing because we think that we'll do better by bringing the founders along because they bring the passion." That was really the thought process behind why we allow founders to roll equity.

Brett:

Yep. I love that. And it just seems like it's a pretty good time to do this. The multiples are pretty high right now. We talked about that a minute ago, Dave, it's just common knowledge right now. A lot of people buying e-commerce businesses. E -commerce has been exploding. It was growing before the pandemic, saw the huge spike during the pandemic and it's still growing now. So it's a hot place to be. So it kind of makes sense. If you can get a partial exit now, partner with somebody like Growve, grow more. Grow, maybe more than you would've been able to on your own. But then also later get a multiple that you wouldn't have gotten on your own, have a chance for a second exit makes a lot of sense. It can be pretty attractive.

Dave:

Yeah. Pretty compelling. You talk about it. I mean, there's over a hundred aggregators and by virtue of there's a lot of interest in acquiring brands. I don't like to say it a lot, but for sure it's increased the valuations that are being paid. That's just natural. That's a positive for people thinking about maybe wanting to do something. And there's also-

Brett:

Yeah. When you think about their 2.5 billion raise in the last four months. They can't just sit on that cash. It only works if they're going out and buying businesses. So you got some aggressive buyers potentially right now.

Dave:

Yeah. They're willing to do it. And on that note, it's always good too though, to be careful, there's a lot of offers that are getting thrown out. That could be pretty high valuations. One word of caution is just making sure it's from someone that can really execute. Because a lot of times someone will throw out a big offer to kind of get you under term sheet and locked up in exclusivity, but they aren't someone that can really execute on the deal.

Dave:

So it's always good to do your homework and make sure when you agree that you really know who you're working with before. Just a word of caution, because we run in that all the time, "Oh, I got this huge multiple." Then three months of diligence and going through the process and that buyer wasn't able to actually close on the business. So just something to be cautious.

Brett:

It's such good advice. I didn't get permission from this friend and client. I won't mention the name or the category, but long time friend and client of mine gone through about a two year process, I think of trying to sell. Just did do a partial exit and it was great. But before that had another experience that was not great. And it took like 12 months and he confessed after the interview, he was like, "I wanted to quit the whole business. It was so exhausting, so draining and then we didn't have a deal that I wanted to quit. I just wanted to quit the whole thing."

Brett:

I think that really speaks to what you're talking about. Don't just be attracted by a large offer because it's got to be the right partner, because there's just a high probability won't work out. Then you're just going to spin your wheels and go through all this time and end up frustrated and disappointed.

Dave:

Yeah. And maybe one other thing to mention, always ask for referrals, "What deals have you done? Let me talk to the founders and get their feedback." And we actually encourage that, because we try to be really good partners because we're going to be working together for a long time. And a lot of the deals we do actually come from referrals. So it's important to us.

Dave:

Another step I would recommend is whoever you're going to work with ask them about some other deals they've done and get some referrals and talk to people.

Brett:

Yeah. Really makes sense. I like that piece that's built into your model and I know a few other aggregator owners and one in particular I'm thinking of they just do full exits or full buyouts. That makes sense. That's kind of the norm. But when you are allowing an owner to roll equity, it's a partnership. You want this deal to be structured well, because you want that person to be motivated and that they're sticking around. So not trying to take advantage for sure.

Dave:

Yeah, absolutely.

Brett:

Cool. While we're kind of on this topic, what else should a seller be looking for? So if a seller's considering an aggregator, what other questions should they ask? Let's see some example or get some referrals, that type of thing, but what else should they be looking for asking?

Dave:

Yeah, I would say if they're wanting to roll some equity and stay involved long-term, give us some examples on how well businesses that you've done have performed afterwards. Like I mentioned, we've done 13 acquisitions, 12 of the 13 or are up. So how is their track record? Then what are some things that they can do to bring value? So we at Growve have built out a lot of different services that we offer sellers.

Dave:

So we have a traditional retail team. We're a vendor of record and most major retailers from Target, Walmart. All the drug, we have our own regulatory, we have manufacturing. We manufacture gummies and powders. We're vertically integrated. In most cases, save on their product costs, we can diversify where they're at and, and get them into other channels. So really thinking through, "Okay, if I partner with them, what do they bring beyond what I already you can do? If I'm really good at E2C, e-commerce or Amazon...," if that's all they can do, maybe they're not going to provide near the value that someone else. So just think through, "Okay, how can they help me from a value standpoint," especially if you're rolling equity, because you're going to be in tandem and working together and you want to make sure that they can actually add value.

Brett:

Yeah. 100% makes sense. Great. So what are you guys looking for? When you're acquiring a brand, because at OMG Commerce, we work exclusively with e-commerce brands, so high growth e-commerce brands working on the Amazon side, but also Search Shopping, YouTube, that sort of thing.

Brett:

Almost everyone that we talk to, they have a goal of an exit at some point. They want to sell at some point they may not exactly know when, they may not exactly know how, but they do want to sell. So I think it's beneficial for everybody to know what is an aggregator looking for. So as you're evaluating brands you want to buy, what is your criteria?

Dave:

Yeah, so a number of things. One and almost first and foremost for us is because of the rolled equity pieces, the type of people we want to work with. There's lots of deals out there and there's lots of ways to make money, but we want to partner with people, we feel like will be good partners back. We like to spend time with them and it's been a little bit harder with COVID and it's opening up more and more. Zoom is great, but let's get out there in person and get to know one another. That's a big step for us.

Dave:

Another would be, there's a lot of, what we call black hat. There's ways to manipulate Amazon that aren't within kind of terms and condition and those-

Brett:

Yep. So it's making the news right now, two big Chinese sellers getting shut down for fake reviews and such.

Dave:

Yeah. We want to shy away from brands that have done a lot of that. Brand owners need to know when you're selling, most buyers are going to the make you... They're going to require reps and warranties. They're going to require you to rep that you are compliant with Amazon's terms and conditions. So if you're doing a lot of black hat things, if it doesn't come up in diligence and you close and there's issues after the fact, and you're making a representation that you've been within policy, it could cause some issues even post close.

Dave:

So we spend a lot of time really vetting that. And we understand that, with Amazon and just the e-commerce world, there's probably some grays, not completely black and white, but there's some that are out there deliberately doing things that they know they're not supposed to be doing.

Dave:

We like to look at categories that we think are emerging. Just to give you an example on the dietary supplement side. So we look at the data and one of the interesting things we've seen with the data is over the last 10 years, the gummy delivery form has grown double digits and...

Brett:

Even with adults, which is really interesting.

Dave:

Yeah. People are wanting to take the traditional capsules and tablets. So we saw that trend and actually, this last year, it's up over 40%. So we spent a lot of time working on ways that we could provide innovation within that gummy delivery form. And we have a new brand that it's fruit-based gummies called Fruily that we just launched and marked-

Brett:

Which I've tried, by the way. I think you sent me some elderberry gummies and man, really good. Very tasty.

Dave:

You liked those?

Brett:

Yes.

Dave:

Good. Yeah. So the gummy 90% of it is real fruit. Most gummies are either the first ingredient, sugar or glucose syrup. I bring that up because for us, we're looking for things that we feel like have a lot of upward potential in terms of growth. And that we can even take them even beyond. If they're just on Amazon, we can take them beyond because it's more than just kind of a product. And I'm good at hacking Amazon that there's actually some viability in the brand, in the products.

Dave:

Those are some of the things that we really look at, as we do our analysis.

Brett:

Is it important to you that someone be on Amazon and off Amazon? Are you totally comfortable with an FBA only business? How do you guys look at that?

Dave:

Yeah, that's good. So more and more, we like brands that actually, as well have a direct-to-consumer component that they're great with their Shopify and things they're doing, Facebook. Just things that they're doing to drive traffic, beyond just being on Amazon. Amazon loves organic traffic and I think from an algorithm standpoint, you're favored if you have that. So we've actually invested and are investing a lot in kind of building out that infrastructure on our side, that it's not just about Amazon. We really want to be good just from a D2C component. So we're really trying to build that out.

Dave:

And we have an example of a brand, which they started just on their Shopify account, and it's really fed the other channels. I mean, it's fueled Amazon. We don't spend a ton on Amazon because we have all this organic traffic that Amazon loves. Then it's also helped us to take it into traditional retail. So I think the brands that are going to succeed and do really well long-term have to really be thinking about that D2C play. It's not just about Amazon anymore.

Brett:

Yeah. But thinking about that Amazon success, how do we parlay that to success with the Shopify store or BigCommerce or Woo or whatever the case may be, but your own D2C website and then getting into retail, having all of those channels makes you a much more attractive business. Much more sellable, ... multiple all of those things when that happens.

Dave:

Yeah. There's no question. Just if you can be everywhere the consumer is, and all of those touch points, you're going to command a much higher multiple, where you're just kind of single focus, single channel on Amazon, there's more risk. If you think about it from a buyer standpoint, if all you are is Amazon, what happens if your account gets shut down? Or...

Brett:

Exactly. Which-

Dave:

...maybe they ban that ingredient or a product? Then everything's gone. So there is risk with that. And that's why you see lower multiples for brands that aren't as diversified. So I think as brand owners, you think about that, "How am I able to diversify myself? If I'm just Amazon or I'm just Shopify, or I'm just traditional retail, how do I diversify myself into some of these other channels?"

Brett:

Great. Dave's been amazing. Just probably a couple more questions here. Been super insightful. And I love this topic. When deals go bad, when deals don't pan out, what is usually the reason or reasons why deals don't work out?

Dave:

Yeah. And we have those, they have many actually. We had one that we thought was going to happen that ended up not happening as of yesterday. And sometimes it's in diligence as... So we agree generally pretty upfront on general business terms, things like purchase price. Then before we actually close, we're going to spend more time doing diligence. And there may be things that come up, that we weren't aware of.

Dave:

And to give you an example, we were looking at a brand that offered gummies, a different brand. And they were getting all of their products, all their gummies made in China, but they weren't putting on the label, "Product of China." So they're getting away with it, but it's not compliant. So for us, there's no way to do that deal because we look at it, "Okay. We could make those gummies ourself, but it's going to increase their cost structure by 40%." So we would automatically jump in and their income would be significantly lower.

Brett:

Immediate impact to EBITDA. It would go down and that's a negative, obviously.

Dave:

Yeah. I would say, just if there's things out there that you know that maybe aren't quite right, be upfront because they're going to get discovered throughout the process. And it costs kind of both sides, not only is there a cost component and time. A lot of times there's ways to work through them, if you're upfront. In this case, we looked at it and said, "Okay, can we make them in the U.S.?" It was so much of a cost differential that we weren't able to do. But a lot of times, if you're upfront, we can work through the issues. But those are a lot of reasons why we end up not closing.

Brett:

You kind of need to air the dirty laundry, so to speak. Just get it out there because... Well, first of all, buyers hate surprises. You want to know up front. And if you know up front, you can likely work around it. Every deal has dirty laundry's the right word. But there's always negatives or there's issues or things in the business that potential buyer needs to be aware of. But if you bring it up front, usually a good thing. That's awesome.

Brett:

Dave, this has been fantastic. Couple things. One, do you guys have any resources or materials or should people just kind of follow you guys on social media and see what you're doing? How else can people learn?

Dave:

Yeah. So we actually have been pretty quiet as a company in terms of, we've stayed under the radar and kind of intentionally. And as of late, we've been more aggressive just in talking about ourselves. So you can definitely follow us on social media channels. You're welcome to email me if you have questions. I mean, you don't even have to be in the category if you've got questions. My email is dbunch@growve.com.

Brett:

Awesome. Thank you.

Dave:

I'm happy just to, you've got a question on something, just want some advice. I mean, we about helping people as well. You don't have to worry that, "If I reach out to Dave, he's going to try to pitch something on me," we're about helping people and we really help each other. Over the years I've kind of learned, I've got lots of friends in the industry and that's good to run things by each other and kind of work together. So we have that mindset.

Brett:

Yep. I love it. And just from meeting you and some of the other partners at Growve, genuine people, just down to earth, super solid. So really enjoyed getting to know you guys. Where can people find Growve online? Website, social media? Where can they fin them?

Dave:

Yeah. So we've got our Growve website, so just growve.com. All the social media, we're pretty active, especially places like LinkedIn that have a lot of business owners. So we can be found there. We generally now are doing, some press releases announcing various things. We just brought on a pretty high level advisor to the team that has sold multiple Amazon brands, a good friend of mine that we brought on. So you can kind of stay abreast of what we're doing by following us that way.

Brett:

Yeah, it's super great. I'm particularly interested in following aggregators one because I have a few friends that run aggregators, but I mentioned this at least in part on the show I think, my business partner and I, Chris Brewer, we're looking at potentially acquiring some brands, buying some smaller brands, helping them grow and then potentially selling to an aggregator. That was actually an idea that a friend of mine gave me. We've been talking about it for a while, but such an interesting space.

Brett:

I'm just grateful to be in e-commerce, where things are growing and the trends are right. And it's a lot of fun too. It's just a really fun place to be.

Brett:

Awesome. Well, Dave, thank you again for spending the time. It's been really great and we'll have to do it again some time.

Dave:

Yeah. Thanks, Brett. Really appreciate you having me on.

Brett:

Absolutely. All right. And as always, thank you for tuning in. We'd love to hear your feedback. Leave us that review on iTunes. Shoot us a note, connect with us on social media and with that until next time. Thank you for listening.

‍

‍

Deacon helps founders & CEOs create profitable, scalable business growth through coaching and consulting programs at SharpBusinessGrowth.com. He's led teams overseeing $50 Million in marketing campaigns, and delivered revenue growth results recognized by Inc. 5000.

If you look at wildly successful DTC brands compared to the rest, you definitely find some differences. But those differences aren’t always what you think. Sometimes really great products fail. Sometimes insanely smart entrepreneurs never reach their full potential. Sometimes great marketing tactics alone just aren’t enough. Deacon Bradley is one of those guys that you feel smarter just from one conversation with him. In this episode we talk about Growth Mulitpliers vs. Growth Inhibitors. Some of these might surprise you.  

• Missing the connector of brand and strategy that make your team and your agencies to be successful
• The story of an awesome DTC product that never fully figured out who they were
• The power of Vision and commanders intent
• How to be a visionary that integrators love to work with
• What “knowing your numbers” really means and really looks like
• How to avoid being a “genius with a thousand helpers”

Deacon Bradley

Via LinkedIn ‍

Sharp Business Growth
Sharp Business Growth Podcast


Mentioned in this Episode

Tier 11

Ralph Burns

Austin Brawner

Dan Kennedy

Sarah Still

Ryan Daniel Moran

“Rocket Fuel” by Gino Wickman

“Traction” by Gino Wickman

Justus Murimi

“Vivid Vision” by Cameron Herold

“Dare to Lead” by Brenê Brown

Craig Groeschel

Episode Transcript:

Brett:

Well, hello, and welcome to another edition of the eCommerce Evolution Podcast. I'm your host, Brett Curry, CEO of OMG Commerce. And today, I have a fantastic guest. This guy I've known for a long time. And I was just thinking about how do I best describe this guest? And I believe my guest today, Deacon Bradley, is one of those guys that you just feel smarter after you have a conversation with this guy. You feel smarter, you feel better equipped to tackle business issues, you feel like you've got things figured out a little bit better, you're ready to charge ahead.

Brett:

Deacon and I first worked together, maybe a couple years ago now, we were both serving the same client, but from different agencies. So OMG Commerce was helping this client with Google and YouTube ads, Deacon at the time was with Tier 11 and Ralph Burns. And so they were working on the Facebook side and I was like, "Man, this guy is smart." And then we reconnected in Austin just recently, had a chat, and we thought, "Man, let's just do a podcast together. Let's talk about some interesting things." And so our topic today, we're looking at growth multipliers versus growth inhibitors. So how do we multiply growth? And how do we identify these things that are really tripping us up and keeping us from growing. And so with that, Deacon, welcome to the show, man. How are you doing? And then thanks for coming on.

Deacon:

Awesome. I am pumped to be here. And I pumped about this topic. And Brett, I remember, this comes up when we were in Austin hanging out, we had talked about this stuff, and really it comes up any time I talk to somebody who is really involved with an agency, so they're behind the scenes of tons of different brands, they get to see all the stuff. And as soon as we started talking about growth, things that are really accelerating growth and things that are inhibiting growth, it's like we're both just so engaged and fired up and both excited and frustrated at the same time as we're seeing all these businesses. So I'm really excited to just let people in on some of those things that we see that really make the difference, because it's not always the things that the gurus are telling you.

Brett:

Yeah, it's so true. And then what's interesting, that the agency model, and you're on your own, you're independent now, you're consulting, you do a lot of cool things which we'll dive into. But being in this agency world, we see a variety of businesses. We're working with just high-growth, rapid-growth businesses, great brands. But sometimes you really get a clear picture, it becomes clear, that growth isn't just about having the best product, and growth isn't just about having the best marketing, it's also the founder behind the company and how the team operates. It's not about who's the smartest per se. So anyway, we're really excited to dive into this with you. Yeah, you and I were having a chat in Austin, and we were like, "Hey, this conversation would make for a great podcast. Let's try to recreate this thing."

Brett:

And so, let's talk about a couple things. What are some of the growth inhibitors you see right now? And I know you've had some recent conversations with CEOs where you're like, "That's going to inhibit your growth for sure." But what are some of the top lids to growth, the growth inhibitors that you see?

Deacon:

Sure. Funny you mentioned that, I literally just got off the phone with a CEO right before this who is running a multimillion dollar business, they've been successful in the retail, they've been successful online, and the CEO is working to figure out how to take things to the next level. And in the process of this, they're reengineering some things. So they're bringing in agencies, they're sending other agencies away, they're bringing in new team members and trying to put the pieces together. And when it comes down to it, though, I'm looking at it from the outside a little wary, and part of me is like, "I don't want to be discouraging." I'm like, "You are missing something really important, and that is, you're looking at these pieces that you're bringing in as like, oh, and then I'll bring in a Facebook agency, and then I'll attach the Google agency, and then the Amazon agency plugs in over here, and growth." That's it. That's as far as you've thought.

Brett:

Yeah, like ingredients in a cake. I'll just throw a little flour, a little sugar, a little butter, hey, presto.

Deacon:

Exactly. And Brett, now that I'm saying this out loud, you and I were talking before we hit record about another CEO that both of us had talked to about this, and I think they're looking at it the same way. It's like these are ingredients in the cake, a dash of Facebook, a little bit of Google.

Brett:

Let's go grab my marketing over here. How hard can it be? Just come and do this thing.

Deacon:

Yeah, and so I think that's one of the biggest inhibitors that I see is just that perception of what agency, or it's almost like it's a fantastic tool but you're using it wrong. If you're just plugging them in and it's like you're putting too much on them as far as what they're able to create, what their responsibility is, stuff like that. It's just I often see it's a great tool that's used wrong.

Brett:

Yeah, and obviously, we've both been in the agency world, and I love it when a client says, "Hey, I could really use some Google and YouTube help. I'm going to talk to OMG." We love that. But just plugging in pieces doesn't fully work. Getting an agency or a director of marketing on your staff that really understands what you're trying to do and that's a good fit for you, a good personality fit and all that, that's super important. But what's the connector that you think people are missing? Because it is good to find the best Facebook agency and the best YouTube agency and the best Amazon agency and plug those in, but what's the connecting piece that's missing? What's that growth multiplier that needs to be there for that to work?

Deacon:

Oh yeah, this one, I don't see it done often, but when it's done, it is such a huge difference maker. And I don't want to put a job title on it, because then people will just go put up a job post with that title, and they use it just like one more ingredient. So it's not a job title, it's really just a mindset, and a role, and what this person's seat is on the bus. So imagine you've got, just to simplify, let's say we've got Google and Facebook going. The person that is missing is, these are usually two different agencies, even if they're one agency doing both things, you still need this person, which is-

Brett:

It's usually different people, right? You don't have the same...Facebook and Google. It's a different head space. It's usually with a different person even if it's the same agency.

Deacon:

Yes. So what I've found is that typically, it is so difficult to run paid media these days that you have to be a real expert on that platform. And so Brett, like you were saying, it's two totally different people. And if you have never been one of those people, let me just let you in on a secret, they are heads down figuring out the algorithm, looking at stats, they're deep in the weeds of operating this thing.

Deacon:

What they're not thinking about is your brand or your customer journey or all of these things that are actually the secret sauce to making direct to consumer work. And so this role that I'm describing is like, "Oh, this is the growth multiplier," is somebody who's thinking about that stuff, who's saying, "Hey, this is the product that we're selling right now, and we know that we want to be selling it because it's a great customer acquisition product. And when somebody buys it, I know I've got an email team lined up that's going to sell them the next thing, and in 30, 60, 90 days, then I'll see my profit so that I can grow and scale again." That is a level or two above where a typical paid media buyer is thinking.

Deacon:

And so, the growth inhibitor is hoping your agency's going to think of that for you, the growth multiplier is taking ownership of that and putting someone in that chair who spends all of their time and effort just thinking about it. They understand your products, they understand your margins, they understand your customers, and where you can acquire customers, and actually grow your business in a strategy that all works together.

Brett:

Yep. I love that. And I think the right agency, even if their focus is more on the media buying side, they can give you insights, they can give you suggestions, they can maybe let you know when, "The brand message here isn't really jiving or this isn't really connecting for me." But usually, they're not the one driving the strategy. And so you need either someone on your team or you need an agency or whoever that can say, "This is an ownable space in the market. This is our position in the marketplace of what our product does and who it's for, and where are we going, and who are we serving, and what is this brand going to be." And then your agencies can just help you get there faster and help you accelerate that growth.

Brett:

But we experienced this with the shared client. Obviously, I won't name names or disparage anybody, because this client that we worked with together is super, super smart. But they even had an issue with this. They had three or four or five products, and we're like, "Well, what product do we buy when? And how do these products ... Is there a journey? Do I buy this product first and then I graduate to that product?"

Deacon:

Yeah, we were making it up.

Brett:

"Or do I use this product on this?" And they're like, "Well yeah, we're ..." And then like, "We never got an answer." And I think the bottom line was, nobody knew.

Deacon:

And you know what's funny about that situation, Brett, is that your team and my team were on calls together without the client. And we were essentially trying to fill in-

Brett:

We were trying to figure it out.

Deacon:

... this role that we just described because nobody was doing it.

Brett:

Yeah. We could feel it in the ads. There were some great ads. We were spending a lot of money on ads profitably, but we were like, "This is missing something, so let's see if we can inject it." And then we couldn't fully, but yeah, it was super interesting. So I love that. What are some other growth inhibitors? What are some things that keep entrepreneurs and D2C brands from growing?

Deacon:

Another one, and this is from the last call that I was on, and as he was talking through it all, I was like, "Man, how do you not know this yet?" And then I thought back a little further, and I was like, "Oh, this actually comes up all the time." And that's just not knowing your numbers.

Brett:

Yeah.

Deacon:

This is a hard topic. A lot of CEO leaders are what you would classify as visionary. And that's a fantastic, it's an amazing gift. It's not a gift that I have. I'm the integrator in most partnerships. So visionaries will often either just totally skip this numbers part, or they'll look at it too, they're zoomed out too far. So for example, a CEO I'm on a call with is like, "Oh, well, we ran the numbers for last year and we had a CPA of 28." I'm like, "Okay, I'm not sure what to do with that. That's really big because you sell about a 100 different skews at price points from $25 to $500. And I'm not sure what to do with a CPA ..." Oh, and that was also blending multiple channels together, so I was like-

Brett:

And blending cold and warm and remarketing, but that's blended, blended. That is a number that's meaningless.

Deacon:

Yes, exactly. And the sad part is somebody went to a lot of work to compile a lot of channels to come up with that number that's not very helpful. And so by not knowing your numbers, I would consider even though this CEO had a specific number when I asked for it, I don't consider that knowing your numbers. Because what I'm really after is, well, let's talk new customers, somebody who's never bought from you before, how much does it cost to acquire one of those? Or interestingly, what I want to know is, so Brett, you and I and agency land are interested in how much does it cost for us to get one of those? If I'm the CEO on the other side of the wall, the way that I'm thinking is, what can I afford to pay to get one?

Brett:

Yeah.

Deacon:

And that's the reverse. It's like, "Hey, Brett, or agency that I've hired, I can pay $100 to get somebody to buy this thing." That's knowing your numbers because you know that when they buy the thing, you're either going to profit a little bit right away and a lot later or however it works in your business model.

Brett:

Break even now and profit later, whatever the case may be.

Deacon:

Yeah.

Brett:

And I remember this fantastic Dan Kennedy quote from back in the day where he said, "He or she who can afford to spend the most to acquire a customer wins." And that if you unpack that a little bit, that's not just saying, whoever throws the most money on a problem wins. That's not what it's saying. It's saying the person that can spend the most to acquire a customer wins. And then what that means is, I can profitably, you can only spend $80 to acquire a customer because your back end and your upsells and your lifetime value is low, but because well, mine is structured, I can pay $120 profitably to go get a customer. So I've got more channels, more tools, more at my disposal, and I can scale a lot quicker than you can. And so that's an interesting way to look at it for sure. But you've got to deeper than that. "Yeah, my blended, blended, blended number is $28 CPA," that's email and that's organic and that's YouTube and Facebook, and not a helpful number.

Deacon:

You're reminding me of a moment, or one of my big takeaways. So the event that we were at in Austin was essentially an event for an investment fund, lots of ecommerce brands there, and so there's lots of investors there. These are people who had put their money into a fund, and the ecommerce brands that received the investment were there, and we're all working together to collectively grow. And so, one of the things that I thought was really interesting was, a big takeaway that I kept hearing over and over was, it was so fascinating to hear these investors saying things like, "I want to free you up to stop trying to make a profit on your first sale, because that is killing you."

Brett:

It kills your growth. It totally kills your growth, yeah.

Deacon:

So the growth multiplier, I think is, it's knowing your numbers and then also that component of that mindset of, "This is how my business works. I break even on the first sale, I go into the whole X amount on the first sale," whatever it is for your business, and then just really committing to that and just relaxing into it that, "This is our plan, and I know that it works, so let's go do it."

Brett:

Yeah, it's interesting. I think sometimes there's maybe this tendency, I know I've done this as a CEO that, I want to go after the hardest problems, the most complex things. And I really like media, I still get into some of the weeds, even though I'm running the company, I'm still the CEO. I've got a great integrator, like you Deacon, we have Sarah Still on our team who is an amazing integrator, so need that, but I'm still casting vision in high level growth.

Brett:

But I like to get into the weeds of things. I like media, I like YouTube, I'm still tinkering and coming up with new strategies and stuff. I tend to go to the hardest problems, and on occasion, I think sometimes the numbers seem disarmingly simple or they're like, "Oh, that's just addition," or "I'll mold it." It's like, "That's easy. I don't need to focus on that. I'm going to focus on this problem." Or, "We're thinking high level and just doing the fun stuff." But the numbers and knowing the numbers at the level you're talking about and that we're talking about, that is the business. That you have to know that.

Brett:

And then once you do know that, and you're comfortable then yes, settle into it. We've got a client who's so good at this, where they look at, they can acquire a customer for about $120, and the initial purchase is less than 50, but they know they just get their systems dialed in, that that's going to be a very, very profitable customer two or three months down the road, and so we can just hit the gas pedal and go. But a lot of people aren't at that, aren't at the level they're at in terms of knowing the numbers.

Deacon:

That's awesome. Yeah, so they're going well under the whole $70 roughly, and they hadn't even figured out the other stuff, but yeah, that's really cool that they have that dialed in.

Brett:

So sometimes it's like the initial offer is 50, but they have some upsells that gets the AOV then they usually AOV up, but they just know their LTV even over the next two to three months, and so, going hard on that, which is-

Deacon:

I would just point out to everybody listening that, Brett, this came to mind, and I can see Brett's face light up as he's talking about this, this sounds like a fun customer to work with. So not only is this a well-run business, those are numbers, but it's energizing everybody on the team, everybody. Brett's not even on the team, and he's like, "Yeah, listen to this guy."

Brett:

No, actually I'm still on these calls because they're so much fun. But we were bringing some of our account managers, which in our company our account managers are more like the quarterback for the client. They're coordinating communication and reports and meetings and stuff, and so I suppose we'll bring in new AM just to listen to these calls, because they're blow your mind, and we get so deep into the numbers, and they've got this cube that they run, and we're triangulating data from multiple sources. It's super fun, actually, super nerdy. But yeah, I do light up a bit about that stuff.

Brett:

Cool. So, we've got to have this overarching strategy to connect our agencies, that's a growth multiplier. We can't just plug things in and hope that they work, we got to know our numbers. What are some other growth inhibitors that we need to switch and use a growth multiplier on?

Deacon:

One that comes to mind to me is, vision. And this can get a little, it can sound a little fluffy or unimportant to the hardcore business person, but the more time I spend around high-level, high-growth businesses, really successful business leaders, the more evident it is to me that vision is the critical component that all of the things we've been talking about, they all rest on that.

Deacon:

And so as a growth inhibitor, it's very clear now with the amount of experience that I have at this point, I can tell when I walk into a business and it's lacking that vision. And a lot of those symptoms include things like, surprise, surprise, not knowing your numbers, or not having a clear marketing plan or idea, or not having a vision for, "This is exactly where this business is going. Here's how we're going to get there. And here's what it's going to look like. That's how we'll know that we're there." When you're missing those things, it's a huge inhibitor to everyone on the team, but also we've been talking about some of the little specific things up until now, and I think a lot of them just are a symptom of lack of vision.

Brett:

Yeah, where are we going? What is the goal here? What is the roadmap? And people need vision. You're integrators and guys like you need that vision, agencies need that vision. I remember you were mentioning that Ryan Moran, Ryan Daniel Moran is one of the best that you've been around at this. You can unpack that a little bit. I think you guys had a conversation in Austin, well, you both live in Austin, so it was probably there, but you guys had a conversation recently that where you were like, "Wow, that is a perfect example of vision." I know you probably can't get into too many of the specifics for confidentiality purposes there, but describe that. What does a good visionary look like?

Deacon:

Sure. I was sitting down with Ryan and we were talking about one of his ecommerce brands. And this is a brand that has really, really high potential. This could easily a 20, $30 million a year business. And so that's the far off destination. What I just described to you though is, people go, they either go, "Wow," or they roll their eyes like, "Yeah, everybody says that." Because it's not a vision, and I wouldn't even consider it a destination. But what Ryan does so well that gets people like me, the integrators, really excited. And if you're wondering what we're talking about, by the way, with visionaries and integrators, I love the book Rocket Fuel, that unpacks that whole model. I don't know if it originated there.

Brett:

Is that a Gino Wickman?

Deacon:

Yes.

Brett:

Is he the same guy that wrote Traction?

Deacon:

That's right.

Brett:

Yeah.

Deacon:

That's right. So I'm like a textbook integrator and Ryan's like a textbook visionary. And so, what I just was really enjoying in that conversation was, I can see the down the road the big $20 million, whatever, but that's real fuzzy and fluffy and nobody knows how to get there. But what Ryan was able to do so well with a clear vision was, unpack like, "Six months from now, this is what the business is going to look like. This is the business model. This is how we'll acquire customers. We'll use these products. They lead to these other products." And so, while there might be like 10 or 15 skews, he was even lining up like, "These are the customer acquisition methods. This is about how much we'll be charging for products. This is how many people we'll have as customers, and is going to result in this kind of revenue." And so as he's saying that six months out-

Brett:

"These are the kind of influencers we need to work with...

Deacon:

Yeah.

Brett:

... was thinking about that level, yeah.

Deacon:

Exactly. And so as the team is hearing this, what we're able to now envision is, "Oh, okay. I know who needs to be on the team. I'm starting to envision like, how I'll need to be testing ads or what kinds of funnels need to be involved here," all of this stuff. And that was six months out. He backs it up, "So three months we need to be here, at two months, we need to be here." And so by the end of that conversation, I could have walked out of the room and hired the next three people really confidently.

Brett:

Yeah, you could have started running that company from that one conversation pretty much.

Deacon:

Yes. And what I was getting a sense from this, Brett, from what you were just describing about the customer example you gave a minute ago about knowing their numbers, to me, they must, I bet they have a really clear vision and know exactly where they're going.

Brett:

They do, they totally do. Yeah, and it's pretty exciting. Yeah, and so we talked about this a lot. I mentioned Sarah Still, our COO, she and I talk about like, "How does this role break down? What does this look like, visionary versus integrator?" And really the visionary or the CEO is often more about the what. "This is what we need to do and where we need to go." And the integrator is about the how. "Okay. Well then this is the who behind it, and these are the tactics, and this is how we get there." But yeah, you got to have that clear vision and it's just super, super important.

Brett:

Any advice there? Any tips or strategies, or resources? We mentioned Rocket Fuel, also the book, Traction, same author, great books. Any other resources for the vision piece? Or anything we've talked about so far, any resources, podcasts, tools?

Deacon:

Yeah, so Justus Murimi, who, I think it was on this podcast also ...

Brett:

Yeah, I interviewed him a couple weeks ago. I don't know when that will be released and you know all that stuff but yeah, that dude's awesome. I love that guy.

Deacon:

I love Justus too. I talk to him almost every day. Him and I have talked about this a whole lot as well. And one of the books that he turned me on to that I thought was helpful, was Vivid Vision. That's, I'm totally blanking on his name, Cameron Herold. So Vivid Vision is a good book. I found it shockingly detailed if you're reading it, and you're like, "Wow, this is a really detailed vision." But it was also really helpful because it gives you that picture of what does a good vision look like?

Brett:

Nice.

Deacon:

And the other thing I would mention is, this isn't necessarily a resource, but I am, and I feel like I'm swimming in a sea of visionaries and they're all looking for integrators. And as an integrator, it's interesting though, because the integrators are really good at figuring out which visionaries they want to work with. So if you feel, if you're identifying like, "Oh, I'm a visionary, and where do you find these integrators?" One, I'd say they're everywhere, but two, the thing that they're attracted to is your vision. So stop asking for integrators would be my advice and start sharing your vision and places where you're stuck in places you could use help, and integrators will just pop up, because we love to solve problems and help move things forward.

Brett:

Yeah, and so I'd be curious from your perspective, because I think sometimes there are visionaries and then there are just dreamers, "I just got all kinds of dreams than ideas and wildness and I'm all over the place." What type of visionary are you looking for? So, an integrator is saying, "Ah, that's a clear visionary, that's the type of visionary that I would like to align myself with and work with." What are some of the elements we're looking for?

Deacon:

I love that you described it as dreamer, because Justus and I had a 45-minute conversation recently or where I was asking him the question and I was like, "Sometimes we're talking to these visionaries and I just want to dive out of a window and run down the block." And sometimes I'm like, "I'll work for you for free." And I was trying to figure out what the difference is, I think he nailed it right there, Brett. It's like something inside me is going like, "Dreamer. They view you as the task doer. They're just going to heap tasks on you and more tasks, and it's like going to be this disconnected jumble them lobbying greasy watermelons at you one after the other."

Brett:

Crazy one though, and so ah And I'm a visionary, but I'm also pretty practical, so I think there's some balance there. But I've also been around people that'd be like, "Hey, I got this idea, go do this thing, research these things and do all this." And then integrator or whoever goes and does that, and they come back and then the visionary is like, "Yeah, I don't really care about that anymore. Let's go do this thing." And then they're like, "I just killed myself doing something and now it doesn't matter." Yeah.

Deacon:

Yes. If you're an integrator, that is very disrespectful. That's how that feels.

Brett:

Yeah, like you don't care about my time. Yeah, exactly. Yeah, it's so interesting. And I think that's the difference where, I love this book. I talk about it a decent amount on the podcast, it's called Made to Stick. And they talk about this concept of commander's intent. And a good commander's intent is something that's pretty simple, but also pretty clear, pretty concrete. It lets you know where to go.

Brett:

So the commander's intent is, "Hey, we will control this hill in this region by this time." Commander's intent, clear. Okay. Now there's probably a million things you got to think about on how do we get there, but that's the intent, we're going to go own that hill. And that's not going to be changing back and forth. Maybe your tactics are going to change back and forth. But I think a good visionary is good at delineating that commander's intent would be my thought.

Deacon:

I love that. I never knew where I learned about commander's intent, but now I remember, because I love that book, but it's been probably 10 years since I read it at this point. One of the things that we use the lot with the last team that I was leading was from Brene Brown's, Dare to Lead where she-

Brett:

Brene Brown is awesome. I've not read that book, but Brene Brown, she's amazing.

Deacon:

One of the concepts from that is, she always talks about paint done. And so we had just built into our team culture. If somebody's saying, if Brett's like, "Yeah, I want to be in charge of a hill," I'd be like, "Paint done for me, Brett." And you would describe the thing you just described like, "It's that hill over there, we're going to control it. We're going to, I don't know, build a campfire on it." Whatever done looks like the Brett, is essentially, we built that culture of being, of making it clear of describing clearly what that commander's intent is. And I think that has made all the difference as far as the leader being able to step away, you can imagine that, and actually have your business move forward. And also just have things meet the expectations of where we're all going. But yeah, I love that concept of commander's intent. I think it's really important to actually getting where you're going. And if you're a visionary, develop that, it's hugely valuable.

Brett:

Get crystal clear on that commander's intent and it's going to free your people up, it's going to guide them, it's going to inspire them and motivate them, versus some of the other dreamer type stuff really demotivates the team. So we were talking about team a little bit. I know that's something you mentioned when you and I were prepping a few weeks ago, that you like to focus on the team aspect, what are some of the elements of team that you like to drill into that are either growth inhibitors or growth multipliers? What would you say about a team?

Deacon:

I was talking to a friend about this the other day. So I have just started a consulting engagement with a team that I haven't worked with before. It's an incredibly talented team, but it's just really different than teams that I had operated with in the past. And after I'd been there a couple of days, I was talking to one of the leaders on the team and they were just picking my brain about what I saw, and I was like, well, if I had to describe it, the team is incredibly talented, but it feels like genius with a thousand helpers. And that's where I see a lot of businesses go, and it's-

Brett:

And that's like, isn't that a concept from Good to Great and Jim Collins. I think I've at least heard him use that term before, a genius with a thousand helpers, that's not a sustainable business.

Deacon:

No, it's a recipe for burnout. And so that's often one of the first things that I look at in the business is, how to break that link, that dependency between the leader and the stuff that's getting done. And one of the important tools to that really is what we were just talking about with commander's intent. I think that's an important tool. It's bringing in an integrator, and really just finding ways to, so that you can stay in vision mode as the leader, and then the vision gets carried out and done without you.

Deacon:

And that without you part is always scary and hard, especially for visionaries who have a really clear vision and you're like, "But it has to look just like this." It can if you describe it well and you build a team around you that can actually do it. And so that's really one of my passions and the things that I love is, just unlocking that puzzle and figuring out how to get work done through other people.

Deacon:

And what I've found is that it all starts with vision and it all starts with that leader, and then just assembling the team and getting the right people on the bus and in the right seats, you can solve it for any business. And it's really fun and really rewarding. And Brett, I know you've done a fantastic job over at OMG. You guys are growing like crazy.

Brett:

Thanks man. And it's one of those things where, I really didn't know how to build a team in the beginning. I'd build some ministry teams and volunteer teams and stuff like that, but I made a lot of mistakes, but we have the right people and a good culture. And I think that's the glue that holds it together that attracts the right people and keeps us growing and going forward. But yeah, we're over 50 now and adding people like crazy. I got two interviews early next week and continuing to grow.

Brett:

But this piece is so important, getting the right team in place. And one of the things, I think this actually came up in my chat with Justus, but I'm a big Craig Groeschel fan. He's a pastor of the church that we attend, but also I listen to his Leadership Podcast and his books and stuff. And in his Leadership Podcast, he says, "Hey, you can have growth or you can have control, but you can't have both." And I think I have a tendency at times, dig into all the details and then I become the bottleneck. And it is a little scary and a little weird for this area of the business to be growing. And it's like, you're not doing anything, it's all your people.

Brett:

Weird at first, but then after a while it's kind of freeing, and then you realize, "Hey, my role is just to help them grow, and help them when they're stuck, and bring out the best in them. That's the most productive thing I can do. That's the growth multiplier from my efforts is, not doing it, but helping them do it better and helping them get unstuck and things like that." But it's sometimes tough to release control or going back to what you said of, "Well, no, I've got this clear vision, but it has to be done this way." And that's usually a real lead to growth.

Deacon:

Yes, 100%. I really liked how you were just describing that. Brett, what I've found as I have grown in my own career and just been around other successful leaders is that, and this is one of those things that sounds fluffy to say to somebody who hasn't yet experienced this, but so much of it is mindset and just how you're thinking about things, and what you were just describing there, Brett. When I'm listening to you, I'm like, "Oh, Brett, said that," results through others is your focus right now-

Brett:

Yeah, it is.

Deacon:

... and developing the people, not developing new house, you're developing people. And that's really rewarding and really cool. And your growth speaks for itself that, as you shift your mindset, things are going well.

Brett:

Yeah, absolutely. And it's really fun. And I think it's just a matter of shifting your mindset. I still like to use a Gary Vee term like clouds and dirt. I still like to get in the dirt on occasion just with certain things, but now I'm taking more of the mindset of, I'm not digging into the dirt so that I do it, I'm digging into the dirt so I can uncover something and say, "Hey, did you guys think about this? Did you look at this? Is this helpful?" Again, more looking at, how do I use the detail to further the team and enhance what the team is doing as that's how I'm looking at that.

Brett:

So, awesome. I love team. And this has been my focus and what I've been thinking about a lot lately. And you and I have both come from the agency world, so how do we apply this to a marketing context? So, as we're growing agencies, we're growing these or rather growing D2C brands, I'm growing an agency, but as listeners are growing a D2C brand, what does this look like? How do you successfully plug an agency into what you're doing or how do you successfully plug the right team in? Unpack that just a little bit, if you would, Deacon.

Deacon:

Yeah, I love your thoughts on some of those too, Brett, because as I'm thinking through this, I'm like, all right, well, when do you ... There's two questions. There's, well, when is it time to hire an agency or what's a growth inhibitor or a growth multiplier in this context? One of the growth inhibitors that I see sometimes is actually hiring an agency too soon, if that makes sense.

Brett:

Yeah, it totally does.

Deacon:

And I say this because a lot of times brands will go talk to agencies and they're like, "Oh, sorry, we don't work with people until they're at X level." And one of the interesting things is like, well, you could suppose that they're just too big and mighty to take on customers that are that small at this point, or you could suppose that they have found that there's actually a better way for you to grow at that stage. And I've always been in the second boat. And, Brett, I love your thoughts on this, but I always view it in the beginning stages it's simple enough and there's few enough moving parts that I want you to do it yourself, just to figure out something. Get some traction around messaging and offers and stuff like that. So it's almost like stage zero, I would say, don't hire an agency, go get your hands dirty.

Brett:

Yeah, I really like that advice a lot. And I think there's a few ways to look at it. I think a lot of agencies, we do this, even when we're like, "Hey, you need to be about this level of spend, this level of traction in these platforms before we can really help." And part of that is, "Hey, there needs to be some data there. We can really accelerate growth when there's data. But also part of that is, you've proven you've got a good offer and you've proven you've got a product that people want." And I love this, have you seen the movie Hitch with Will Smith a little bit older now?

Deacon:

Yeah.

Brett:

I love this part in the beginning. He's consulting with this dude and trying to help him so that he can meet a lady. And he's just talking about, the guy that Will Smith is coaching, he's like, "Well, I'm this, or I'm that," and Will Smith grabs him and says, "You are a very fluid concept right now. We need to get control of this." He was slapping him. But I think sometimes businesses are in that stage where it's like, your brand and what you're doing it's a fluid concept right now.

Brett:

And certainly we'll always be pivoting, tweaking, evolving, things like that, but when you're still really trying to figure things out, you're trying to figure out who you are, that's maybe not the best time for an agency. Maybe that is a time to talk to an agency, reach out to a company like ours, we're happy to still chat. But sometimes a good agent will say, "Hey, go do these things first. Really nail this product and an offer that goes with that product, and let's get some other products with it. And once we can prove that out then come back, then we can really help you." Because we do see that. Certainly there's an area where if you're only spending a couple 1,000 a month on ads, our fees are more than that, so why would you do that? But I think there's also this moment where you're like, you need to tinker, you need to experiment, you need to figure out exactly who your audience is, who your products are and things like that.

Deacon:

Yeah, I love that you mentioned an offer that works because that's like, it's really important.

Brett:

It is, yeah.

Deacon:

And you don't want to way overspend to find out that your offer doesn't work, and it's something that you don't have to be a genius at ads to just answer that one question. And what I see a lot of times with business owners in the early stages is, this rush to outsource everything. I'm the CEO, I shouldn't be inserting whatever menial tasks there. But that mindset can also be I think a hindrance to you moving forward. So stage zero I always recommend don't hire an agency, go do it yourself. You're going to move faster, you're going to spend, you're going to save money for your business and you're going to learn a lot.

Brett:

Yeah, exactly. And then once you have that data, once you hit critical mass, you've got some traction, but you know, "Hey, I don't now have the expertise to take it to the next level," that's when you go find your agency, that's got a proven track record of doing that, of taking someone from where you are to the next level. And I think that's exactly the way you approach it. That's beautiful.

Brett:

Awesome, man. Well, this has been a blast. I can keep talking to you for hours. We'll have to do this again sometime for sure. But Deacon, if people are listening and they're saying, "I need someone like deacon on my team, I need to, or at least I need a chat with this guy and see if this could work." How can people find out more about what you're doing? Also, you just launched a podcast recently so talk about that, but yes, talk podcast and also how can people find you?

Deacon:

Awesome. Well, everything that I am sharing, you can find at sharpbusinessgrowth.com. That's my home base for right now. And yeah, Brett, you just mentioned, I launched a podcast with Justus. Justus has done this show.

Brett:

I did not know that ... Now, I've got to subscribe to this podcast and get it going.

Deacon:

Surprise. And a lot of this came from us, when we were hanging out in Austin and we were having all these really just interesting fun chats with investors, with business leaders, with agency owners and all these different people. And this is where I spend all of my time, where Justus spends a lot of his time, and so really we just wanted to create a podcast and just share candid conversations like, Brett, you and I just had right here, because it's not shared enough. It's there's too much like, I don't know, tactics and shiny objects out there, and not enough of ... What I think is really interesting, Brett, is like, when we hang out, it's like businesses would love to know what we're all talking about right after they pitched us. Isn't that exciting?

Brett:

Yes. That's like, if you could be a fly on a wall when someone's unpacking your pitch you just made to them, that's super helpful. So it sounds like that's what you and Justus are doing. And I totally agree with you. And I'm even thinking about this podcast, how do I maybe pivot a little bit/ People still want tactics, right? And that's what sells so to speak. But some of what we were talking about today, this is really where growth is unlocked. This is really where you make changes, the move, the needle tactics, come and go and tactics are important. But yeah, some of this stuff is timeless and the most important. So awesome man. That website one more time?

Deacon:

Sharpbusinessgrowth.com

Brett:

And what's the podcast and where can we find the podcast? All our favorite podcast apps, I would assume?

Deacon:

I believe so. I just pushed it live earlier this week. I know it's up in Apple and Spotify. The podcast is called Sharp Business Growth. And yeah, you'll find it in.

Brett:

Deacon Bradley and Justus Murimi, all right, man. I am super excited to go download the first, it looks like They've got three episodes, at least, that are alive at the time of this recording. I'm sure by the time this is published, they'll have lots more. So check that out as well. Deacon Bradley, ladies and gentlemen, Deacon, this has been awesome. And thanks for coming on. This was a lot of fun.

Deacon:

Thanks for having me.

Brett:

Yep, absolutely. And as always, we appreciate you tuning in and setting aside your time to hang out with us. We would love your feedback. What would you like to hear more of on this show? Do you like conversations like this, where we're talking a little bit higher level and diving into what kind of growth mindset or growth levers do we need to pull beyond just tactics? We'd love to hear more about that. And if you find this podcast helpful, we'd love it if you reviewed this wherever you consume podcasts, so that's iTunes or Google Podcasts or Spotify or wherever the case may be. And with that, until next time, thank you for listening.

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Most of the high growth eComm companies I know are all building to sell. Some want to sell once revenue hits $5 million, some $25 million and some $100+.  Regardless of what your target number is or regardless of if you even have a number, this interview with Chad will be super helpful.  

Hear how Chad built his pet brand business and sold it for 7-figures in under 3 years. 

Here’s a look at what we’ll cover:  

• Tips and advice for sellers 
• Maximize EBITA as you prepare to sell
• Practical tips to “think profit first.”
• Tips for prepping to sell your business
• Learning from successes and failures
• Understanding how self-imposed limits are holding you back!

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Chad Maghielse

   Via LinkedIn

   Via Facebook

Mentioned in this episode

Ryan Daniel Moran

Ryan Daniel Moran’s Podcast

“The 4-Hour Workweek” by Tim Farriss

Kevin Rizer’s Podcast

Capitalism.com

Coran Woodmass

99designs

TheFBABroker

Tom Wheelwright

Quiet Light Brokerage

Joe Valley

“Profit First” by Mike Michalowicz

Episode Transcript:

Brett:

Well, hello, and welcome to another edition of the eCommerce Evolution podcast. I'm your host, Brett Curry, CEO of OMG Commerce, and man, am I excited about today's episode. I love diving into entrepreneurial journeys, founders' stories, and this one is fantastic, because we're going to hear from an E-commerce entrepreneur who built a business off of a whim, off of a crazy idea, which we'll talk about in a second. Discovered he had a really great business, built it, sold it, had a fantastic seven-figure exit. Now he's investing and consulting and doing other great things.

Brett:

My guest today is Chad Maghielse. Chad and I met a few months ago at Ryan Daniel Moran's lake house. If you listen to the podcast, a lot of you know I've now interviewed several people that I met at Ryan Daniel Moran's lake house, but it was an awesome meeting. I was like, "Man, there's so many cool people that I need to get on the podcast, need to connect with," and Chad was one of them. Chad, with that quick intro, man, welcome to the podcast.

Chad:

Thanks for having me.

Brett:

Thanks for taking the time, and how are you doing?

Chad:

I'm doing great, I'm doing great. Thanks for having me. Yeah, Brett and I met in Austin. We're both investors in a fund there and advise some of the businesses in it. Brett and I just hit it off and said we were going to do a podcast episode someday, so here we are.

Brett:

Here we are. I think we were chatting at Ryan's kitchen table, enjoying a keto brownie or some other goodie from one of the brands that was there, and started chatting about investing and exits, and it was a ton of fun. Let's dive into the origin story of your business, Chad. I love this story, because it's you solving a problem that you had, or rather that your dogs had, but talk a little bit about that. Well, what's your background first, just real briefly? Then let's talk about the origin story of the business.

Chad:

My background was in real estate. I was a real estate agent for a number of years. I'm into real estate investing now, but at the time I was a real estate agent. Years ago, I read the Tim Ferriss 4-Hour Workweek book that probably everybody who's listening to your podcast has read. Kind of the classic, and that lit the fire under me that I want to design my own lifestyle. I don't want to be on anybody else's time. I want to just build something that can provide the lifestyle I want to have. Hard to do that with real estate, because you're always on call, so I started exploring-

Brett:

You're at the mercy of buyer and seller, right?

Chad:

Yeah, yeah.

Brett:

I mean, you've got to cater to them.

Chad:

It wasn't unusual for my phone to ring at like 10:00 PM on a Friday night, and I was...

Brett:

Not what you want.

Chad:

"I'm not doing this long term," so started looking at different business models. I came across, you mentioned Ryan Moran's podcast. There was another guy, Kevin Rizer, who had the Private Label Podcast. I came across their material, and that got me interested in that world. I knew I wanted to create some sort of physical products brand in E-commerce, and I ended up creating a pet supplies company that was based off of my two dogs. I have two French bulldogs. Their names are Brock and Beast, and they're adorable little monsters, but dogs are gross, especially French bulldogs.

Brett:

Brock and Beast. Dogs are gross. They're so much fun, but they're gross.

Chad:

Right, right.

Brett:

You said they're French bulldogs?

Chad:

French bulldogs. Little 20-pound pig-bunny-looking French bulldogs.

Brett:

How old are they now?

Chad:

Oh, man. They're almost 6 now.

Brett:

Wow, okay, so you-

Chad:

Yeah, they grew up fast.

Brett:

You discovered your adorable dogs... What's that?

Chad:

I said they grew up fast.

Brett:

Yeah. Adorable dogs, but you noticed a problem. These dogs had a bit of a problem that you needed to solve. What was it?

Chad:

Well, they had a lot of problems. The most obvious one at first was just they have horrible breath. Horrible breath. That led into actually my first product. I had a list of 10 potential products, and that was the one that I wanted to do, because there were other products on the market that addressed that problem, but the ingredients were things that I and many of the other customers out there weren't comfortable with. There were some that had like grain alcohol and stuff that, you'll hear different opinions from different people, but there was enough concern that some of the ingredients in existing products were dangerous to dogs.

Brett:

Likely not the cleanest ingredients; not the healthiest options for the dog.

Chad:

Yeah, so I wanted to create something that had a different ingredient profile and would be healthier, but then based around my wife and my dogs, and I wanted products that I would use on my dogs. I created this brand that people who see their pets as part of their family really identified with. Somebody that just thinks a dog is just an animal and not a member of the family, they're going to be turned off by that brand, but it really connected with people who truly see their pets as part of the family; as one of their kids or something like that.

Brett:

Yeah, which totally makes sense, because someone that's likely getting close enough to their dog to smell their breath, or to be concerned about how the breath smells, that dog is important to them. The dog is in the house and on the couch and around and stuff like that.

Chad:

Oh, yeah.

Brett:

For somebody where the dog is just something to be whatever, to tend to the farm or something like that, that dog is outside. Who cares what the dog's breath smells like?

Chad:

Yeah. My brand wouldn't have been for them. We ended up with breath products; we ended up with anti-itch products; with shampoos. Treats for anxiety for dogs, and cats too. I mean, most of our products were geared towards dogs, but 10% of our customers were people that had cats.

Brett:

Nice. When did you realize, "Hey, this is a real business"? I mean, you had the luxury of, you had a successful career. If the E-comm thing didn't work out, you would have been fine. When did you realize that, "Man, I'm onto something here; this product can really take off, and could lead to a bigger business, not just a single product"?

Chad:

Yeah. I briefly mentioned this to you in our previous conversation, but when I started the business, I don't think I had the confidence to say, "Okay, this is a million-dollar-plus idea. I'll sell this in a couple of years," and all that. I think it was just a cash-flowing side hustle at first, but I had a pretty successful launch, relatively speaking. A few months in-

Brett:

Was the launch on Amazon exclusively, or on and off Amazon?

Chad:

Started just on Amazon. I think I got one of those like $29 Shopify sites just so I had something off Amazon, but honestly, any sales of any meaningful amount were on Amazon to start with. We expanded to other platforms later, but the launch was mostly on Amazon. I had the goal of getting to $50,000 a month in sales. That was my first goal, and at the time that seemed like a lofty goal, but once I hit that and was going above it, I'm like, "Okay, I want to get to $100,000 a month in sales." Then I really started thinking that I can sell this. As I'm sure all your listeners know, that million-dollar run rate of $83,334 a month, equals a million dollars extrapolated over 12 months; my first month when I hit that $83,000 mark I think is when I really started thinking, "Okay, I can probably sell this."

Brett:

It's a million-dollar business. Yeah.

Chad:

Yeah, yeah. At that point, I was at a business conference. I think actually it was one of the Capitalism conferences, and Coran Woodmass, who is The FBA Broker, was one of the speakers there. I grabbed him at the bar or ran into him at the bar after and said, "Hey, I want to buy you a beer and talk for a minute," and just got talking about the process of what it would look like to sell. He said something along the lines of, "Hey, you just had your first month where you crossed that million-dollar run rate. Your business is not worth that much yet. Come back and talk to me again in six months to a year." We stayed in contact, and I grew the business significantly-

Brett:

At this point, were you still just the single product, or you'd expanded?

Chad:

No, no.

Brett:

Okay.

Chad:

Yeah, I think once I'd crossed like $25,000 a month with the first product, I expanded to a second product, which was a shampoo, and then a third product, an anti-itch thing, and then ended up with six products total when I sold the company.

Brett:

Awesome. That's awesome. Talk about some of the things that you got right initially. Sometimes we just nail something, either because of training or advice we get, or because we've just thought it through. Sometimes we get things right because of blind luck. There's a variety of things. What did you get right from the beginning?

Chad:

I think one of the biggest things that I got right from the beginning was spending some extra time on really getting a great brand, as far as logo, packaging, stuff like that. I know that's counter to some advice that you hear a lot of, "Hey, just get your product to market as quick as possible," but a lot of my products came in these 8- or 16-ounce bottles, and literally all of my competitors at the time just had a standard white or clear bottle with a 4-by-6 stick-on label, and they didn't look very expensive or, in my opinion, very high-quality.

Chad:

I had to talk to 20 different suppliers to get somebody that would do this, but I finally got somebody that did these full-body shrink-sleeve labels, head to toe, and they looked much more expensive, even though they only cost a little bit more. That was able to justify higher profit margins. I think, especially products that your pet is ingesting, like a breath thing, they want to have confidence in the quality of it, and I think, I don't know, the better you can make it look, the more perceived quality is there and the more comfortable a customer is in trusting you with their pet's health. That was something that it took a little extra time to get to market, but I think that was definitely helpful to my long-term success. That was...

Brett:

Yeah, and I want to dive into that just a little bit, because I think it's super important. I think that that mindset of, "Hey, don't spend too much time on it; just throw some packaging on there, sell it and then iterate," so it's MVP, minimum viable product, then test, iterate and go from there.

Chad:

Yeah.

Brett:

I think that's valid to a certain degree, but here's where I believe you win on Amazon, and then in the greater E-commerce game, is with a good brand, right?

Chad:

Totally.

Brett:

A brand that people trust. That's where you can have a great seven- or eight-figure exit is with a brand that has some brand equity, that people trust and respect. Here's the thing. I think you want to take the time to really think about it, and, "Who is my buyer persona? What kind of tone and feel, and what's my brand messaging?" You want to think about that. Don't just slap something up there. I think really those days of just sourcing some product and throwing up a crappy listing, I think those are over.

Chad:

Yeah, that's long gone.

Brett:

Yeah, but I think, to free up a little bit, you don't have to spend so much time into it that this will be your packaging forever. You're still going to test and iterate, and there'll be a V2 and a V3, but still try to get it right. How do you make that good first impression? Think branding; think merchandising. How is this going to show up on the digital shelf? That's super duper important. The days are gone where you can just throw any old thing up there and just expect it to sell because it's Amazon.

Chad:

Yeah, for sure. Especially with E-commerce, people see your photo. That's the first thing they notice, and maybe review rating or something, but you've got to try to visually stand out, and that's hard to do if your product looks like all of your competitors'.

Brett:

Yep. Any tips or advice there? Any resources that you read or consumed, or people you consulted with, or steps you took to really nail that brand and the packaging design?

Chad:

Yeah. I had probably a dozen different concepts for what the brand would look like, and there's different services you can use to split test them. I mean, to even create the candidates in the first place, I used just 99designs, and I ran a few campaigns.

Brett:

Yeah. Yep, it's actually great.

Chad:

It is.

Brett:

You get all kinds of ideas from 99designs. In the early days of OMG, not our current logo but one of our first logos, we used 99designs. It was fantastic, and we got a ton of ideas, and it really helped us shape our thinking.

Chad:

Yeah. I mean, if anybody listening doesn't know about 99designs, you just tell them what you want, and the different artists will compete for your business. You'll get 10 different possible logos or branding things, and then you can narrow that down to a few and be like, "Okay, I like this one. It's not completely done, but I like where you're at, so I want to hire you as a graphic designer, and let's make some tweaks beyond that." Yeah, I would definitely recommend getting other people's opinions. You've got to trust your own gut and you've got to trust your vision, but get 10 different ideas, and then ask your friends and family and your Facebook audience or whoever. Here's another thing: for anybody that's just getting started, I think it is very helpful to document the creation of your brand. Even saying like, "Hey, I'm running this 99designs campaign. Here's my favorite three logos. What do you guys think about this?" Really sharing-

Brett:

Yeah, and sharing that on social, right, and getting some engagements, some buy-in there.

Chad:

Absolutely, because those people that give you their opinion on that may become your first buyers for your first product launch.

Brett:

They'll feel invested in your venture.

Chad:

Absolutely. Absolutely, and one tactic you can do; if you have a Facebook group or something that you create, and then run a poll and say, "Okay, for our first product, we're going to go with one of these three designs. Everybody that votes gets a 10% off coupon or something." Then you can follow up with them. That can be your product launch.

Brett:

Yeah, I like it. I like it. Cool, so you got the branding and the package design right. What else did you get right from the beginning?

Chad:

I think really narrowing down my audience, and it wasn't just people who have dogs. Narrowing down, my audience was people whose pets are part of their family, and also who are charity-minded people, because one of the big things we did that I really think was a pillar of the success of my brand was we had this right on all of the bottles, kind of like an insert card, but literally on the products. We said, "Hey, send in a photo of your pet with this product that you purchased, and we will donate a portion of the profit from your sale to a pet with cancer and reply back to you with a photo of the exact pet that your purchase helped." I had a VA do that, and...

Brett:

That is awesome.

Chad:

It made such a huge difference, because literally, if you bought-

Brett:

That created a lot of social sharing, I would assume, and lots of chatter?

Chad:

Oh, yeah. Tons of user-generated content, and tons of loyal fans or customers or whatever you want to call them that loved our business and loved what we stood for. It was a legitimate thing, and we donated tens of thousands of dollars and literally saved the lives of multiple pets with cancer, because a lot of people just didn't have the money to... if your dog has cancer and you're not in a financial position to do something about it, and you're looking, "Okay, do I pay rent or do I help save my pet," that's a tough position to unfortunately-

Brett:

It's a tough call. Yeah, it's a tough call. You've got to survive.

Chad:

Yeah, a lot of people are in, so we did that, and if you bought one of the products you'd literally get a photo of your pet and this website called the Magic Bullet Fund. It's like a GoFundMe for different pets that have cancer, so we'd donate to the specific pet and be like, "Your dog, Buddy, helped this dog, Ralph. Here's a photo of them together," and my VA would put that together.

Brett:

I love that. I think a lot of people are going to hear that and think, "Oh, that's a great idea. You're donating to charity." I know a few of our clients, they donate to 1% for the Planet, so a percentage of each sale or a percentage of the profit goes to 1% for the Planet. Great charity. There's a lot of great things out there like that. What I love about what you're doing, though, is you're making it personal.

Chad:

Absolutely.

Brett:

It's not just, "This is going to help dogs with cancer," but, "This helped this dog with cancer. Here's a picture of your dog, Buddy, and this dog that's the cancer patient." That's so powerful and so emotional and so personal.

Chad:

It was, and it felt good, too. It's like, yes, that helped my business, and I guess there's a selfish gain with that, but it really felt good to know it really did help a lot of other people's lives too. You've got to believe that every... not every, but most people who'd get that photo back of their dog and the dog they helped, they'd post that on their social media. They'd tag my company, or what used to be my company, and it just created this continual momentum of people who loved our products, but loved what we stood for and what good we were doing in the world.

Brett:

I love that, and I think sometimes we're maybe thinking, "Hey, let's keep it on the down-low, the charitable things we're doing," but I think making it more public and more visible actually fosters the mindset of other people being generous and other people sharing.

Chad:

It does.

Brett:

Getting that sharing going actually leads to more giving and more generosity, and it benefits the business, so it's a real win-win and I think you should double down on it.

Chad:

It does. I think we briefly talked about this in Austin, in person, but that was a hard decision for me, because I didn't want it to just be a charity for show thing. I think you and I talked, we have similar religious, Christian backgrounds, and I take that-

Brett:

Yeah, yeah. Yeah.

Chad:

There's that Bible verse about, "Don't let your left hand know what your right hand's..."

Brett:

Right. Yeah, yeah.

Chad:

Don't be braggadocios with your giving, so I think, okay, I'm going to take that perspective to my personal life, but in business I want to foster this idea of... I want to encourage more capitalist companies to do more good in the world and do more charity work, so I think in business that is a good thing to promote. I wrestled with that a little bit in the beginning, but I think that's the right way to go.

Brett:

Totally, and I think if you look at the heart, and not to get on a quick theological discussion, but I think it's important. Looking at that, I think if you look at the heart of it, it's more about, "Don't be boastful, or don't be too high on yourself for giving," but that doesn't mean you can't talk about it. I think this is a real balance of one of those things of, "Hey, I'm actually doing this because, one, it's enriching the lives of my customers; two, it's enriching the lives and actually helping other people; and then it's fostering generosity," so it totally makes sense. Yeah, I love it.

Chad:

Right.

Brett:

That's awesome. Cool. We love hearing those success stories. That's inspirational and fun, but let's face it: we all like to hear about the failures. What did you not get right, or what were those learning moments? Anything you can share there? Mistakes? Places you tripped up? Things you wish you had known?

Chad:

Well, I mean, right off the bat, my company name changed in the first week, because right off the bat I did not do enough research on the company name.

Brett:

Had trademark issues or something?

Chad:

Yeah, had my listing taken down literally a few days into the launch. That sucks, and I guess some people might be tempted to give up at that point, but it was pretty easy to fix, and I was back up and running 48 hours later and ended up having a successful launch. Make sure you truly do all of the research on that, because you don't want to have to deal with that kind of stuff. Make sure you do all of the trademark research. Make sure you do more than just a basic search, which was my mistake. There's that.

Chad:

Also, a longer-term thing where I think I dropped the ball, that I, if I had a do-over, would have done this a lot better: I did not do a good job at keeping my audience engaged in the long term. Our first customer interactions were always super positive, because they usually came from the charities and stuff that we talked about. People would send in a photo of their dog and all of that, so we had great first contact with our customers, but I did not have a good email follow-up sequence built out, where there's just a couple of emails a month that go out automatically. I just didn't do that. Looking back, I don't know why. I mean, I guess there's always an excuse. I was busy or whatever.

Brett:

You're busy with so many other things, but...

Chad:

Yeah, the reality was-

Brett:

It's one of the highest-return things you can do, though.

Chad:

Yeah. The reality was, I was lazy and didn't get it done, and I should have, or I should have just hired somebody else to do it. It sat on my to-do list literally for years. I ran the company for 2 1/2 years and sold it. That was on my to-do list the whole time and never got done. I think I would have sold for a higher amount and would have had more repeating buyers had I done that, so I'd highly recommend, once you're to the point where you're making enough profit where you can afford to have someone create those for you, if you don't have time to do it yourself, do that, because I wish I would have.

Brett:

Yeah, that's awesome. Let's transition a little bit. I want to talk about the sales process, because we work with a lot of high-growth brands. I mean, that's what we do at OMG Commerce; we're accelerating the growth of brands that are already successful, and we're investing now. Most people's goal is, "Hey, I'm building to sell. I'm building to sell, and then I'll go start the next thing or invest in something." Let's talk about how you approached the process of selling. I guess, let's just talk about that first. How did you prep for sale?

Chad:

Well, I followed the guidance of the broker that I used, who was Coran Woodmass. Great guy. Him and his wife Leanne work together on it.

Brett:

What's the name of their company again? I know they're FBA...

Chad:

The FBA Broker.

Brett:

Yeah.

Chad:

I'm super happy with them. Would definitely recommend them. What they had told me was, "Optimize for profit at this point." When you're thinking you're going to sell in six months, that's not the time to experiment and try, "Okay, let's go advertise on Pinterest. Never done that before, but let's give it a shot." When you're prepping for sale, it's not the time to throw things at a wall and see what sticks. It's the time to double down on what's working, .. expenses.

Brett:

You're maximizing that multiple at that point. "Let's get that base, that EBITDA, as high as we can for the purpose of the multiple."

Chad:

Yeah, get the EBITDA as high as you can. I did that. I doubled down on what was working. I did not launch additional products in that last bit of time, and I think that that was the right call. I prepped three products, or I had them sourced and actually had the first inventory order, and used that as a carrot with the buyers: "Hey, I've got your-"

Brett:

Nice. "Hey, you've got your next three products ready."

Chad:

Right. "You've got your next three products. Here's the first sample inventory order of, I don't know, 50 bottles each or 50 units each," so whoever's buying it can take that and run with it. I think that helped attract the buyers, and we got a few offers in the beginning, and I think it was, "Hey, we've got your next step planned out already. You don't need to worry about that." I think that was good. I could have obviously continued to grow the company and sold it for a higher multiple, or a higher dollar amount at least; however, the timing of it was crazy, because I sold it, and literally two months later COVID hits. In the long run, that is a positive. A lot of E-commerce brands saw some substantial growth during COVID, but stress-wise, at least, in the beginning, when just everything...

Brett:

Yeah.

Chad:

You know.

Brett:

In the first couple of months of COVID, nobody was buying businesses. Like, nobody was doing anything.

Chad:

Yeah. Yeah, all of that got put on hold.

Brett:

All deals were off the table at that point.

Chad:

Yeah. I'm happy when I sold. I'm sure I could have, if I waited until now, could have sold and got more money, but I'm happy with the timing of everything. Now I'm moving into investing and consulting and stuff like that.

Brett:

Yeah. I mean, you did well. You had a seven-figure exit. You built a great brand.

Chad:

Thank you.

Brett:

It's impossible to nail the timing perfectly, but you did fantastic, so you've got to feel good about that. If you had to go through the process again, and ideally, you're probably going to build something and sell again, what would you do differently than you did maybe the first time?

Chad:

In the sale process, or in the building process?

Brett:

In the sales process. Sales process.

Chad:

I mean, I don't need the money as much anymore, having gone through a sale, so I think I would probably hold out for an even better offer.

Brett:

Yeah. Why not? You wouldn't be under pressure to sell.

Chad:

Yeah. I think people are realizing that buying a business is a good spot to invest your money a lot of times, because so much is uncertain right now. It's tough to invest in the stock market and real estate right now, because you don't know what's going to happen, and prices are so high.

Brett:

Don't know what's going to happen. It's all out of your control.

Chad:

It is.

Brett:

Sitting on cash is tough because of inflation. That's not necessarily the best idea. Obviously you want to have liquidity, but yeah.

Chad:

Right, so I think knowing that you can go into a negotiation as the price-setter, not like a beggar, and be like, "Hey, no. This is what I want." I'm not going to be rude or anything, but I'm not going to entertain less than that. If you do, "I have a quality business. This is in high demand." You've got to have that level of confidence, and that can probably get you an extra couple hundred thousand dollars if you're negotiating-

Brett:

Yeah, and you've got the freedom at this point and the confidence to say, "I can be patient. I can wait a little bit. I don't have to take the first deal."

Chad:

Yeah, right.

Brett:

I think people can even be disciplined, even with their first exit as well, but it's much easier after you've got some cash in the bank and you've had your first exit. It's easier mentally to do that.

Chad:

Right. Exactly.

Brett:

Let's talk about this. I know you're an investor now. You and I are in the same fund, and have a lot of fun doing that, but you're also investing in real estate. That totally makes sense, because you've got a real estate background, but can you talk a little bit about that? What's fascinating is, when you sell a business, there's a big tax event. That's a taxable event. There's a big tax burden.

Chad:

There can be.

Brett:

You were able to minimize that because of some real estate investing. Do you want to talk through a few of the details there?

Chad:

Yeah. I mean, we're filming this in June of 2021. I mean, who knows what's going to change in tax law, depending on when somebody's watching this, because there's-

Brett:

Right, tax laws. This is true.

Chad:

... a lot up in the air, but I sold in January of 2020. At that time, and it's still true today to the best of my knowledge, you can do what's called real estate bonus depreciation as an investor. What that basically means is, instead of the property depreciating over the course of a number of years, you can depreciate a large amount of it year one if you get a cost segregation study. If you buy properties financed, say you put 20% down, and you get a cost segregation study done, a lot of times that will come in and allow you to have 25 to 30% of not the money you put down, but of the purchase price of the property. If you buy a million-dollar property, put down $200,000, you might get a $300,000 tax credit.

Chad:

That allows you to... I mean, it's not eliminating your taxes, but defer them to later. Greatly reduce it. Even better than that is if you can find a good mobile home park deal. Mobile home parks can have 50 to 60% year one bonus depreciation, so do the math on that; that can save you a lot of money on taxes. I would highly recommend, Tom Wheelwright is a good resource for minimizing your taxes. Real estate I think is the number one way, at least that I know of; there might be better things. Legal way to minimize your taxes as much as possible. Yeah, cost segregation studies and bonus depreciation are the key to minimizing your taxes when you have a big exit.

Brett:

Yeah. I'm not a real estate expert by any means, looking at some different options right now, but there's obviously real estate appreciates over time, and there are cashflow properties and there are different opportunities there, but I think the piece that a lot of people don't consider is the bonus depreciation aspect and minimizing your tax burden, and just some of the tax strategies that can really make real estate that much more attractive. I think it's definitely worth looking at.

Chad:

For sure.

Brett:

If you've made an exit, or if you've got extra profits to invest, real estate should probably be something you consider.

Chad:

Right.

Brett:

Fantastic. Anything else you would mention on things you've learned, or advice you would give to someone who is about to start the process of selling a business? What tips or advice would you give them?

Chad:

Well, I guess first I would say the foundational thing is you can do it. I don't mean this to minimize anybody else's challenges or anything, but a lot of people won't even try because they think it'll be too difficult, or they think they don't have enough money to do it, but there's so much training available to get you started that's for free on podcasts and YouTube, and then you can pay for better training once you've at least started. I would say, if you take six months or take a year to learn some of this stuff, and if you can save $5 a day, you have enough money to get started over let's say a year and a half. I started my company with literally $300,000, that's it, and then sold it for over a million. It can be done. Again, I don't mean this to be demeaning; I mean this to be encouraging. If you have access to the internet and have enough money to smoke cigarettes, you can make a million-dollar business. Honestly.

Brett:

You can. It's totally true.

Chad:

It's completely true, and I recognize that it sounds like bullshit, but it's not. It's completely true, and I don't mean that to talk down to anybody; I mean that to just encourage anyone who might think they can't do it, or don't have the resources. If you can smoke cigarettes and you have internet access, you can do it. I would say that. Beyond that-

Brett:

Smoking your way to millions. Oh, wait. No, that's...

Chad:

That's another business model. I would say that as an encouragement. I would say that, like we talked about, getting a good brand is foundational. Don't take the shortcuts and just use one of the softwares out there to say, "Okay, this product looks good on the demand versus competition thing," because that can change real quick, because other people are also seeing that product, and the competition can change very quickly. Make sure you have a brand that people want to buy. They buy your brand; they don't buy the commodity. Your products obviously are important, but your branding is, I would say, even more important. You need to have people invested in that brand, because their brands they buy say something about them. People that bought my products, it was a statement.

Brett:

Exactly, and that leads to a higher multiple. It makes the exit process better. You're really trying to build multiple products that a group of people can buy. What about someone who's looking to sell their business? They've already got an established brand; they're selling; they're profitable. What advice would you give to them when they're getting ready to sell, or considering selling?

Chad:

Well, I mean, like we talked about, don't experiment. Don't waste money on things that are not proven. Double down on getting your profit margins up. One thing I'd say to test, a lot of people don't test raising their prices, and it's worth a test. I was afraid to do that for a while. I had a product that was selling really well. I didn't want to rock the boat, but I tested raising the price from, I think it was $15 to $17. I got not only an increase in profit; I actually got an increase in sales.

Brett:

Wow.

Chad:

That doesn't always-

Brett:

That's interesting.

Chad:

It is.

Brett:

Price is kind of an emotional thing; it's not as logical as most people think. There are emotional factors to why one price works and another price doesn't.

Chad:

Yeah.

Brett:

You went from $15 to $17, so doing quick math, that's a 12%, something like that; 12, 15% increase. Not only are you making better margin, but you sold more with the higher price.

Chad:

Right, and I think it-

Brett:

Perceived value, I would assume.

Chad:

Right, and I think it was because this was a product that was ingested by your dog, and people perceive that more expensive prices equals higher quality. If it's something that's for your health or for your pet's health, you don't want the discount, cheapest thing possible; you want the quality thing, and you're willing to pay for it. That's not only true with ingestible products. I have a buddy who has a CrossFit products company. He has like a weightlifting belt, and his belt is more expensive than most of the other belts. I think somebody has like knockoffs of his that are much cheaper, but people want to buy his, because it's a good brand, first of all, but also there's a perceived quality. You don't want to hurt your back with some crappy band.

Brett:

Yeah. Clean and jerks, you've got to keep the back safe, and working out in CrossFit, usually it's a group. You're working at a gym. You're concerned a little bit about how you look as you're working out.

Chad:

Yeah, yeah. All that to say, test raising your prices. I mean, test it by a dollar. See how you do. Maybe test it by another dollar after that. Not always going to work. I had one product that I tried that on that it didn't work. It decreased sales and I went back, but more often than not it worked. A lot of people don't think to test that. I would say test that, because obviously the higher the profit margins, the more appealing your business is going to be to potential buyers.

Brett:

Yeah. Would you suggest someone potentially talk to a business broker? Is there a time you would suggest doing that?

Chad:

I mean, I'd have an initial conversation once you hit the first month of whatever your goal price is, so you get your first month, let's say it's $100,000 and you extrapolate that 12 months forward. I'd have that first conversation then, knowing you're probably not going to sell yet, but a good broker, and I would recommend Coran and Leanne Woodmass, but I'm sure there are other good ones as well. A good broker will help give you advice. There's some accounting stuff you've got to get in order. I had to get an accountant to redo my books and get them more organized and all that before I was ready to really present all of that data to potential buyers. Yeah, I'd say it certainly doesn't hurt to have that conversation early and learn at least what you need to do in preparation.

Brett:

Most business brokers are happy to do that, and I hear great things about the group you were just talking about. I know Ryan Moran speaks very highly of them, and so do people in the community. Quiet Light Brokerage; shout out to Joe Valley and Brad and the gang there. They do a great job. There's a number of great brokers. I've found that I think brokers do want to have those conversations early. They don't see that as a burden. They see that as a positive, so once you hit that run rate that you maybe set as your target, have that conversation, and they'll guide you into some more specifics too, and let you know what the current landscape is like and all of those important things.

Chad:

Yeah, and if your listeners haven't thought about selling yet, they might not know this, but businesses in our E-commerce world are generally valued on their trailing 12 months of profit, so it's not like you can have a good three months and say, "All right, I want to sell my business for a ton." You want to stabilize at that trailing 12 months. Ideally, you want to show growth, continual growth, but don't have the growth be just top-line; you need to show growth of profit. People are buying profit, in most cases.

Brett:

Yeah. I mean, and that's such a good thing to underscore. What is someone buying when they're buying a business? Yes, they're buying a brand. Yes, they're buying the products you have. They're buying your inventory and all that, but really they're buying a multiple of your earnings. That's how businesses are valued, and that's what people are buying. They're buying that cashflow. They're buying that profit, because that does speak a lot to the potential. That's what people are purchasing, so you've got to keep that in mind for sure.

Chad:

Yeah. I would recommend also, this really helps when you're... I mean, even before you're ready to sell; this is just helpful for running a business. Read the book Profit First by Mike Michalowicz. That really helps you get organized, and there's even a course, Profit First for Ecommerce Sellers. I'd read the book first and then take the course. That really helps you increase your profits, see where you have unnecessary expenses and do something about it. It's kind of like an envelope system, but for modern-day E-commerce brands. I'd definitely recommend checking that out if you're thinking in the next year or two you might want to sell.

Brett:

Nice. Love it. Love it. That's awesome. Chad Maghielse, ladies and gentlemen. Chad, this has been a ton of fun, man. You brought the thunder.

Chad:

Yeah, really enjoyed it.

Brett:

Brought the value. If people want to connect with you, if people want to say, "Hey, I'd love to chat with Chad," can they connect with you on LinkedIn or on Facebook, or what's the best way people can...

Chad:

Yeah, either one of those would be fine, Facebook or LinkedIn. I'm just under Chad Maghielse on both. I'm sure you can put the spelling of my name in the show notes, but it's M-A-G-H-I-E-L-S-E. Yeah, I'd be happy to chat here and there. I'm open to doing a little bit of one-on-one consulting. I don't want that to become my job, but I do miss this world. Brett and I were talking, we both invest in this fund that helps businesses grow, and when we met in Austin I had a lot of fun getting to give some advice to some of the younger companies. I've hosted a couple of training calls since then, and I miss that, so I'd be open to a little bit of consulting here and there, just not much. I don't want it to become a full-time thing; I want it to be something that's fun.

Brett:

Exactly, and you're an investor, and you're still a busy guy. You're doing a lot of things, but it is fun. It is rewarding. I'm enjoying this stage too, where now we can invest in brands and consult and share our resources and our network and our ideas, and you've got a lot to bring to the table for sure..

Chad:

Yeah. There's a lot of cool ideas out there. I'm really excited about a lot of the brands in that fund we invest in.

Brett:

Me too.

Chad:

There's seemingly an endless supply of great ideas that just need a little help on some of the other things in this business.

Brett:

Yeah, it's so interesting. There's a lot of founders out there with beautiful ideas. Either they're brilliant at product design or product formulation or something, and maybe they need marketing help or maybe they need just funding or whatever.

Chad:

Right.

Brett:

Yeah, it's been a lot of fun to be a part of that and to watch for sure.

Chad:

Yeah, for sure. For sure.

Brett:

Awesome. Well, Chad, man, really appreciate it. Thanks for taking the time, and this was a ton of fun.

Chad:

Appreciate the invite. Thanks, Brett.

Brett:

Absolutely. As always, thank you for tuning in, and we'd love to hear back from you. Hey, whatever your podcast platform of choice is, whether that's iTunes or something else, leave a review there if you feel so inclined. If we're delivering the value and entertaining and helping you, then leave that review. That means a lot to me and to my crew. Helps other people find the show as well. With that, until next time, thank you for listening.

Chad:

All right, man. Thanks for having me. That was awesome.

‍

‍

KetoBrownie (now rebranded as Sinless Snacks - https://www.sinlesssnacks.com/) started where a lot of great food brands start - in the founder’s kitchen.  Nick Raccuia’s story is a great one, full of insights and inspiration, successes and failures.  It includes nailing product development on a few products and failure with other products.  It covers periods of near burn out followed by the power of partnerships and strategic investors.  

Now Nick’s company produces two of my favorite sinless and guilt-free snacks: the original Keto Brownie and the Sinless Snacks cereal bar.  

Here’s a look at what we cover:

• Knowing your customer is the key to product launches. Learn from NIck’s product successes contrasted with a few painful flops.
• The benefits of a strategic investor and how to find them
• Not launching on Amazon soon enough
• Packaging and transit issues
• How obsessing over your customers and products leads to wins

‍

Nick Raccuia

Via LinkedIn

Sinless Snacks (formerly: KetoBrownie)

Via Amazon

Via Instagram

Mentioned in this episode:

Ryan Daniel Moran

Capitalism

‍

Episode Transcript:

Brett Curry:

Well, hello and welcome to another edition of the E-Commerce Evolution podcast. I'm your host, Brett Curry, CEO of OMG Commerce. Today, we're talking about brownies. We're talking about Ketobrownies, but more than that, we're just talking about e-commerce growth and product development. I always get great feedback from listeners when I interview a founder and we get to hear their story. Today's founder you're going to absolutely love his story, the ups and downs of his brand, lots of lessons to unpack, and fun to be had.

Brett Curry:

It's my pleasure to welcome to the show Nick Raccuia. Nick is the founder of Ketobrownies, some new, kind of exciting in the works. With that, Nick, welcome to the show man. How's it going?

Nick Raccuia:

Thanks, Brett. Happy to be here. Thanks for having me. It's going awesome. I'm definitely excited to hop on and talk Keto Brownie and tell you a little bit more about our story and just the progress over the four, four and a half years.

Brett Curry:

Really excited to dig in. Just a quick story about how we met, I'm an investor with Ryan Daniel Moran's Capitalism Fund, and we'll hear the story in a little bit, but Ketobrownies is now part of the Capitalism Fund. So, you and I actually met at Ryan's lake house kind of talking business and stuff. Before that, Ryan sent out to all the investors and some of the people, some Ketobrownies. I get a box of Ketobrownies. I'm like, "Well, I'll eat anything. I'll try anything." I liked healthy food. There was quite a few in this box. My business partner, Chris Brewer, was out of town. So I was like, "Well, I'm going to eat a few of these brownies and I'll save a few for Chris." It's only fair. We invested in this stuff together.

Brett Curry:

So, I ate the first two and then I decided that Chris didn't need any Ketobrownies. He was gone for a few months in Florida, so I ate all of the Ketobrownies, and I regret nothing. The snack is fantastic, and lots of good stuff in the works, new products, stuff like that. We can talk about that in a minute. Let's first talk, Nick, about where did the inspiration come for this product? How did the idea come to be? Just kind of walk through that story because it's pretty interesting.

Nick Raccuia:

Yeah, definitely. It all happened pretty much in 2016. My background is accounting, so I was in accounting for four or five years. Super stressful, crazy work hour industry. I didn't have good eating habits. I was barely exercising, so I was like 30-35 pounds overweight. It was awful. I had no energy. I wasn't even fitting into my dress clothes. I was always trying to diet and eat healthy, but nothing ever stuck. Then I found out about keto, so I started doing keto in mid-2016, and it worked magically for me. I dropped 30-35 pounds in I think six or seven months, like no problems.

Brett Curry:

Wow.

Nick Raccuia:

Yeah, it was just-

Brett Curry:

Have you been full keto since 2016, or close to it?

Nick Raccuia:

Yeah, pretty much close to it, yeah. There's sometimes where I'll take breaks, maybe holidays or something like that, and just kind of give my metabolism and body a change. No, I feel the best when I'm just eating keto: low carb, low sugar. So, I try and eat that way pretty much all the time. I had great success with keto, but back in 2016 it wasn't even close to as popular as it is now.

Brett Curry:

Right. Right.

Nick Raccuia:

I think there was only maybe four or five brands out there, or at least four or five brands I could find, so I bought all their snacks and tried them all just to help me stay on the diet. But I didn't really like the taste of some of them.

Brett Curry:

Snacking is tough, right? I did keto for a hot minute. It was literally three or four weeks. My wife and I tried together. She hated it. It was not the best overall experience. I did lose weight. Snacking is hard. What are you going to eat?

Nick Raccuia:

Outside of life-

Brett Curry:

.. sugar and nuts even, right? So, you're eating butter

Nick Raccuia:

Yeah, sticks of butter. But yeah, you're pretty limited. It's like some nuts, you can do beef jerky, stuff like that. If you're on the go, it's super tough. Or even if you want to run into a convenience store or something, your options are extremely limited. Back in 2016 there wasn't much to choose from. I tried some of the snacks out there, and I just didn't like any. So, I essentially just started making brownies in my apartment for weeks and weeks on end. I went to the grocery store a bunch of times, got some ingredients and started putting stuff together.

Brett Curry:

Did you find recipes online and then modify them? Or are you just making stuff up?

Nick Raccuia:

It was a little bit of both. I was doing a ton of recipe research. The thing is with keto, there's only so many ingredients you can ..

Brett Curry:

Right, it's got to be pretty simple.

Nick Raccuia:

.. pretty simple.

Brett Curry:

.. few ingredients, yeah.

Nick Raccuia:

Yeah, if you look at most of the recipes online, it's always the same ingredients over and over, just varying quantities or different sweeteners and stuff like that. Yeah, it was modifying some recipes I found, and then just having fun, playing around and seeing what tasted good and what worked. I started doing that and just using that as kind of a snack to keep me on keto, and eventually started with my first manufacturer to kind of the recipe shelf stable and getting ready to be mass produced.

Brett Curry:

That's got to be tough. I will just interject for a minute. These are prepackaged brownies, so you got the chocolate... it's like double chocolate. It's like chocolate with chocolate chip.

Nick Raccuia:

Chocolate. Yeah, chocolate with chocolate chips with almond.

Brett Curry:

Yeah, which is fantastic. It's prepackaged. A couple hundred calories or whatever. You can use it as a meal replacement.

Nick Raccuia:

Yep.

Brett Curry:

You got the perfect blend of being dense, but also not dry, and not too flaky. It's just the right consistency. It tastes very natural, because it is, it's got natural ingredients.

Nick Raccuia:

Right. Right.

Brett Curry:

I love then there's also the peanut butter with chocolate chip. That's phenomenal. You've got the blondie as well. Shout out to the blondie. It's good. I do like the chocolate on chocolate, and the peanut butter better-

Nick Raccuia:

Better, yeah.

Brett Curry:

But yeah, I've been on a kick where I eat about one a day. It's great to eat at either breakfast replacement or pre sometimes a better lunch replacement. So yeah, it's just fantastic. So, you had to work with a manufacturer then to get it shelf stable.

Nick Raccuia:

Yep.

Brett Curry:

What was that process like, and then where did you go from there?

Nick Raccuia:

Essentially I took my recipe and was just like, "Hey, this is what I came up with. This is really what I want as the base, but I know this isn't shelf stable," so we're gonna need to add preservatives and stuff like that just to kind of keep water, and mold and get all that kind of stuff situated to be a shelf stable product, to actually sit on a shelf for six to eight, 12 months. We just went back and forth. They kind of tweaked a few things, added a few things, and sent me samples. Then it was just back and forth from there just making sure it tasted as close to the original as I came up with, but also being good for shelf stability.

Brett Curry:

.. botulism or something.

Nick Raccuia:

Yeah, exactly. No mold growth or anything like that.

Brett Curry:

Right, right, right, yeah.

Nick Raccuia:

Yeah, that process took probably another few months of just back and forth with samples, looking over the nutritionals, making sure it adhered to keto and all that, and wasn't too high in any of the sugars or something like that, and make sure that the fat levels are proper. That was another few months of back and forth testing on the recipes.

Brett Curry:

Cool. Tell me, when did you realize "Okay, I've got a real business here. This is not just going to be tasty brownies for myself, but people want this. There's a real business here"?

Nick Raccuia:

This is the first ever business I created too, so it basically two in one for me. I think maybe when I started my Instagram page around that time, and then I put the first production run in. It was super small. I think only 400-500 boxes. It was around that time where things were starting to get real in my head that "Hey, this is a lot of money I just paid for this product to be made."

Brett Curry:

So it's 400-500 boxes, so in each box is like a dozen or something?

Nick Raccuia:

Yeah, exactly. Yep.

Brett Curry:

So then you start posting on Instagram. Did they fly off the digital shelf so to speak? Or was it still ..

Nick Raccuia:

I took pre-orders, and I was just doing basic email opt-ins. I was getting tons of emails, tons of likes and shares, and people just saying "Oh, I really can't wait for this product. Looks so good," and stuff like that. I was just trying to build up an audience and some engagement.

Brett Curry:

Nice.

Nick Raccuia:

I took pre-sales and all that, and I think my first month I only did $2,000.00 in sales, but just out of nowhere it kind of hit it that it was like "Oh, wow. This could be something. You just got to keep working at it and scale it up now."

Brett Curry:

That's awesome. This pre-launch strategy, you're getting people engaged and interested, and email lists and all that. Were you following a formula? Or were you following Ryan Daniel Moran's teaching? Or other people? Or you're just kind of making stuff up?

Nick Raccuia:

I was just watching and reading as much as I could on business and e-commerce at the time, and trying to see what was working at that point. It really was just Instagram with link and bio, opt-in link and bio. We're going to do pre-orders. So I just kept doing that, posting every day. I did a few giveaways once the product was launched, so I gave away some free product emails. That worked really well. It was just basic go to the link, opt-in, and you'll find out when we launch. I was just doing a good job of emailing pretty consistently and just having it really personal and storytelling like, "Hey, this is what's going on with the brand. This is about to launch."

Brett Curry:

The storytelling behind the scenes, here's ..

Nick Raccuia:

Yeah, exactly.

Brett Curry:

The products and stuff like that?

Nick Raccuia:

Yeah.

Brett Curry:

Yeah. Yeah.

Nick Raccuia:

Even to this day, with my email marketing, I just sent one a couple of hours ago. It's just straight text. I don't use any pictures or videos, or anything like that. I want it to be a letter or an email from like a personal friend. I think that's the best way to do it, and just tell stories, and-

Brett Curry:

I love it. If you have the right tone, if you have a tone that really resonates with your market, then just the text only, in the past that was the easiest way to get it delivered. You would include images, you'd include video that the ESPs don't always deliver. That's not as much of an issue now. It's pretty to get images and stuff delivered through email now, but still, I like the plain text only.

Nick Raccuia:

Same.

Brett Curry:

I think it's pretty great. Are you telling stories about the diet and about healthy eating, and about what you're doing, kind of showing who Nick is? Or is it more of the story of the products themselves?

Nick Raccuia:

No, I do pretty much everything, a little bit of everything. Today's I was just looking at some of the Amazon reviews on my product, and I kind of did a "Celebrities Read Mean Tweets". That's what it was, I just picked out a few bad reviews on Amazon and just kind of talked about .. Yeah. That was actually Ryan's-

Brett Curry:

.. one of my favorite-

Nick Raccuia:

Yeah, that was actually a suggestion from Ryan, so I have to give him credit on that. I'll do that. I'll just talk about new products. I'll send a picture of one of the new products I'm developing. I'll be like, "Hey, sneak peek," and talk about the product, when it's coming. I'll do some "Hey, I found out this is the best meal on keto, so this is what I ate today."

Brett Curry:

Nice.

Nick Raccuia:

Yeah, just everything from the ups and downs. I know one time last year I had a good one that it was when Amazon was going crazy with COVID stuff, and they sent me back an entire pallet of my product to my apartment. So, I just took a picture of-

Brett Curry:

We don't want this anymore. There's a whole pallet. Oh, great. I'll just -

Nick Raccuia:

Yeah, in my small apartment.

Brett Curry:

Forklift .. my apartment.

Nick Raccuia:

Yeah, the guy unloaded it on my apartment front doorstep, and I was just like, "Oh man." I had a couple of friends and we loaded 70 or 80 huge boxes into a small room I have here. So, I just took of picture and told the story. It was like, "Thanks, Jeff Bezos. This just showed up." I used that as an opportunity to have a sale to move product quick, like "Hey, get these out of my apartment. Here's 10% off."

Brett Curry:

There's just certain people-

Nick Raccuia:

Yeah.

Brett Curry:

Who love stuff like that. They love that you're kind of the down and out, or obstacle, challenge, whatever. They love to hear when you stick it to the man as well. Yeah, it's a great excuse for a sale.

Nick Raccuia:

Exactly, yeah.

Brett Curry:

Fantastic. Let's talk about a few things about kind of what you got right, what you got wrong. Let's start first with, what do you think you got right in the beginning? What did you nail? I know the product is great. What else do you think you really did well in the beginning stages?

Nick Raccuia:

I think aside from a relation on focus on product development, I was doing that for months and months, going back and forth. I went through dozens of recipes and just focused on making the branding look really good. That was probably the number one. Number two, just knowing the customer really good-

Brett Curry:

Which, by the way, that is the number one, right?

Nick Raccuia:

Yeah.

Brett Curry:

If you don't have an awesome product, then everything else is going to be pretty mediocre.

Nick Raccuia:

Right.

Brett Curry:

Great marketing is only great if the product is great.

Nick Raccuia:

Exactly.

Brett Curry:

Obsessing about product always pays off.

Nick Raccuia:

Definitely. That was kind of obviously main number one. Number two, I'd say is just knowing the customers really well. It helped for me because I was the customer so I know what I was looking for, like "Hey, this is needed to kick my sugar craving," so I know what it needed from a taste standpoint, what the nutritionals needed. If your somebody who's not on keto, it's going to be really tough to make a keto product that tastes good, and what ingredients that go into it, what the macros need to look like, how your blood markers need to look after you eat something like this. Knowing your customer was super vital, and that also kind of ties in with the storytelling and all that too, with the emails. It's pretty easy for me to write keto emails when you're doing keto day in and day out.

Brett Curry:

Yeah. Yeah.

Nick Raccuia:

So, knowing your customer and then let's see-

Brett Curry:

Which I think really that should speak to hey, it's okay if you own a business and you're not the customer. I think it's quite a bit easier if you are. If you are living the keto lifestyle and selling a keto product, that's ideal. If that's not you though, you better with somebody that is. Either partner closely with them or work with them. You need to have that inside scoop, and you need to be able to speak the customer's language, it's on the product for the customer, talk to the customer with your email marketing and social media marketing, and things like that. So yeah, super, super critical.

Nick Raccuia:

Yeah, definitely. Like you said, I think working with influencers could be a big advantage there if you don't have that inside expertise, or finding a partner who maybe is in the food space, or something like that. Yeah, definitely product development, know your customer and then I'd say another big one was I collecting emails and building the audience from day one so-

Brett Curry:

Media that you own. Audiences that you own so to speak is super valuable, right?

Nick Raccuia:

.. yeah.

Brett Curry:

The email list, it's not going away anytime soon.

Nick Raccuia:

Right.

Brett Curry:

And really, it is your business, especially if you're selling a consumable or any kind of product where they're repeat purchasers. You need that email list.

Nick Raccuia:

Yeah. Yeah. I was pretty much focused on that, just building the audience from day one. I didn't sit around and say "Hey, this product's not going to be on the shelf until six months. I'll try and sell when I get it in six months." I was collecting emails from day one and then that kind of just really helped kickstart the launch and it's been one of my strongest revenue drivers to this day.

Brett Curry:

Then it's beautiful for new product releases and product launches .. you can leverage it in so many ways.

Nick Raccuia:

Yep.

Brett Curry:

Let's talk about what did not go so well? What did you not get right? And maybe kind of a question to go along with that is, what do you wish you would have done sooner? You can answer whichever of those you want to answer.

Nick Raccuia:

I think the biggest thing I kind of messed up on was not getting my second and third product out faster. I focused on the bars for the first two years, which is good. They needed the full attention obviously, and I was able to get a couple of flavors out, it went through a couple of reformulations, and new branding and all that. The space was growing so fast and it was still a lot of wide open space, especially for the brownie mix, and the fat bomb mix, and the chocolate nut butter, which were the products I launched after, but at that point I feel like the market was almost a little too saturated, especially for brownie mixes. I was ranked number one for the term "keto brownie" on Amazon for a long time. If I had got another two or three products out there, it definitely would have been a completely different revenue trajectory if I had those up way, way sooner.

Brett Curry:

Yeah.

Nick Raccuia:

It probably took me almost a full year to get another product out. I essentially fell behind a year there. I feel like I could have gotten that out and things would have turned out way, way different.

Brett Curry:

I'm just curious, I think this is always interesting to see the entrepreneurial journey. Were you just too taxed or too pulled to develop a new product? Or why did you develop that second -

Nick Raccuia:

Yeah, I think a lot of it is economics and being a self owned startup. It's like hey, all my time-

Brett Curry:

Bootstrapping.

Nick Raccuia:

Yeah, it's just like all my time's going to the bars. I'm doing marketing myself. I'm doing logistics, operations, customer service. By the time you get all that done, when are you going to have time to develop products?

Brett Curry:

It's a time and capital-

Nick Raccuia:

Time and capital were huge there.

Brett Curry:

Totally. Totally. Tight on both-

Nick Raccuia:

Yeah.

Brett Curry:

Which makes sense. Anything else you wish you would have done sooner? Like, "Man, if I could go back in time until 2016 or 2017 .. something, here's what I would say"?

Nick Raccuia:

I think outside of get on the products, focus more on product development is actually probably looking at investment or getting on some partners to help. I knew I needed an agency or somebody else to help, but financially... especially with an e-commerce food brand, the margin's already pretty tight.

Brett Curry:

They are.

Nick Raccuia:

With the product ...

Brett Curry:

.. lot of people that aren't in the industry don't know, the margins in e-commerce are pretty tight.. the game.

Nick Raccuia:

Yeah. Yep, especially with fulfillment costs and then you have to have an ad budget, and then the product cost, all the shipping costs, all that stuff, the packaging that goes into it all, the extra ingredients that go into it. Yeah, your margins get super -

Brett Curry:

You're paying a dollar for a product and you're selling it for $10.00.

Nick Raccuia:

Yeah.

Brett Curry:

You should be making a ton of money. whole lot of -

Nick Raccuia:

A whole lot of stuff. Yeah, it adds up quick, all the software and all that stuff.

Brett Curry:

Yeah, for sure.

Nick Raccuia:

I'll tell you, looking at funding for sure, because since getting it, it just kind of unlocked so much of my mental capacity, and my time and just . the projects we can start doing and the snacks we start developing.

Brett Curry:

I'm curious, then in terms of... Did you have some hesitancy to getting funding? Because I know a lot of people say, "Man, this is my baby. This is my business. I don't want to give up any equity."

Nick Raccuia:

Yeah.

Brett Curry:

Was there some of that at play? Or was it just "I don't really know how to find an investor." What prevented you from finding an investor earlier?

Nick Raccuia:

I think it was a little bit of all of that. Yeah, this is my business. I don't want to give any of it up. I don't want to deal with a boss, somebody coming in telling me what to do. How do I know this person's actually bringing value outside of just cutting a check, because at that point I can just maybe go to a bank and get a loan or something.

Brett Curry:

Yeah, yeah. Yeah, nobody's going to care as much as I do .-

Nick Raccuia:

Yeah, exactly.

Brett Curry:

I'm buying a partner that's not going to bring me any value. What's the point?

Nick Raccuia:

Yeah. It seemed like it was more headaches than it was worth, but come to find out it's not the case.

Brett Curry:

Yeah. Yeah. It's just so true, getting in a strategic investor, a strategic partner and have huge benefits. I'm not just thinking that because I'm part of the fund that is invested in your brand, and I'm an investor outside of that as well, but I do believe it. If you have the right person, the right investor, the right partner, it can make a huge difference. If you have the wrong one, it's terrible. But getting the right investor and/or partner is huge.

Nick Raccuia:

Is huge, yeah.

Brett Curry:

Yeah. How did that process come to be? How do meet Ryan Moran? How did that all come together?

Nick Raccuia:

I met Ryan a while ago, like five years ago now I think. I actually joined the Online Incubator with another entrepreneur, Billy Murphy, who had a 10 week beta program. I went through his program and that set the initial groundwork for "Hey, this is how you launch an e-commerce brand." And he went over high level marketing and stuff like that. He was really good friends with Ryan, and Ryan actually came and spoke at one of his really small meet-ups. That was the first time I ever met Ryan. From there, we just chatted mainly on Instagram. He always really liked the product, so he would buy some and I would send him stuff, send him new products that I was thinking of making, and stuff like that. I just always connected with him through social media.

Nick Raccuia:

Then back in 2020 I was actually trying to sell the entire business because I was feeling a little burnt out. COVID happened. My main product actually went out of stock and went down, so I had to do a reformulation which going to cost a lot of time and money. I just kind of got pretty beat up last year, so I was trying to sell the whole business. I just texted Ryan and said, "Hey, do you know anybody that'd be interested in buying this brand?" That's when he launched the Capitalism Fund. So, it worked out awesome.

Brett Curry:

I know someone pretty closely, me.

Nick Raccuia:

Yeah, exactly.

Brett Curry:

Yeah. Yeah, yeah. That's awesome. A couple of things to underscore there, I think this is just a great a business principle, getting involved in meet-ups and meeting influencers in the space, and going to events, and staying connected and just being a really cool person. I was an at an event, recently it was one of Ezra Firestone's events. I was speaking at it, and someone gave me free products when I was there. It was an amazing product. It was actually pants for my wife. This is so cool. We connected and I'm helping him, and we're talking and stuff like that. Just making those connections, you never know where that's going to go. Just purely from a networking standpoint, it was awesome, but maybe you want a partner, maybe you want to look for a deeper relationship.

Nick Raccuia:

Yeah.

Brett Curry:

You're going to find those through actual in-person meetings, and then just being a cool person. Awesome. Kind of walk through anything that you feel like is useful or instructive about that process of bringing on an investor. Even though you knew Ryan, and he's a good dude and he's well known, it's still kind of scary to bring on an investor.

Nick Raccuia:

Yeah.

Brett Curry:

What was that process like?

Nick Raccuia:

The main thing that made me feel most comfortable was that he just essentially said, "Hey, I want you to just keep running the business like you run it. We're going to be hands on, but we're not going to be steering the company. That's still what we want you to do because you know how to do it best, you know what products to make. We're just going to be there to support you with financial and capital obligations," and just high level advisory like, "Hey, we'll give you our input, but you have the final say on these things." That was what really made it all make sense. Not to mention, all the networking connections they bring. I was able to get several agencies on board within the first two months of working with them. That was a huge help, just to get somebody running all the Amazon and also the digital marketing, and stuff from that end, web development, all the things that I really hated doing I was doing. It just was making me not enjoy running this business, to be honest.

Nick Raccuia:

So, being able to get some help there and allow me to start focusing on making new products is just a win/win for everybody.

Brett Curry:

Yeah. Yeah. Really, taking the steps to free you up to do what you're brilliant at, because you're a mad scientist when it comes to these new formulas and creating products that taste amazing. You can't do that though when you're running the Facebook ads.

Nick Raccuia:

Yeah, exactly.

Brett Curry:

Which it sounds like you hate.

Nick Raccuia:

Yeah, I hated it.

Brett Curry:

Why do that?

Nick Raccuia:

Yeah.

Brett Curry:

Partner with somebody to do that. Great. What advice would you give to someone if they may be in a similar position as you, either maybe they're burned out like you were and thinking about "I'm just going to sell the whole company" or maybe they're just thinking a strategic investor, what advice would you give them as they're trying to find this person or this group?

Nick Raccuia:

I think what, like I said, is most important is making sure your visions align, and that they're the right fit. So, however much due diligence or research, or networking with them you need to do. Maybe see what kind of other businesses they were in, how they were doing, speak with people they work with. Someone like Ryan, it was just easy because I'd known him for five years and I've been... But at least even if I didn't know him, he's got hundreds and hundreds of YouTube videos and articles, and blogs, and emails, and products he puts out. With the internet age, it's really easy to dig in and see who this person is, what they've done.

Brett Curry:

Sure.

Nick Raccuia:

Yeah, I would say just focus on people who have either done what you want to do, or have a hand in somewhere you want to go, instead of just relying on a lot of these people who just say that they do this, and have no experience doing it right now.

Brett Curry:

Yeah. Yeah, and I think one thing that's really important to keep in mind is that we all hear the horror stories of private equity comes in, fires everybody, changes the whole direction of the company, runs them in the ground. All these horror stories. That certainly happens, but the deeper I get into this game and the more I start investing and meeting private equity groups and stuff, there's a lot of really great people. Ryan is unique, but there are other funds and other investors that are like that, that say "No, I want you to run the business. I want you to execute your vision. We're going to help you. We're going to help you with capital and with our network." So those investors do exist. Yeah, it's probably worth looking.

Nick Raccuia:

Yeah, and if I were to go back in time I would have done this deal from day one. If I ever start another business, I know from the get-go I'm going to look at it.

Brett Curry:

.. investor, yeah.

Nick Raccuia:

Yep.

Brett Curry:

Absolutely. Awesome. Cool, so let's talk about then what's next for the company? I know there could be some things that are secret and under wraps.

Nick Raccuia:

Yeah.

Brett Curry:

We love to have breaking news on the podcast, but also don't want to spill the beans too quickly so to speak. What's next?

Nick Raccuia:

Right now, I'm working on two new stacks, but I probably won't... I already told you before the show, but I'll probably keep it between us for now.

Brett Curry:

I think it's good. Yeah, part of me is "Okay, it'd be fun to talk about, but I'm also investing in the company. I kind of rather nobody copy it."

Nick Raccuia:

Yeah.

Brett Curry:

The snacks sound amazing, and I can't wait to try them. We'll leave that teaser there. These are two, I think they'll be wildly popular snacks, but yeah let's keep it under wraps. Go ahead, continue.

Nick Raccuia:

That's the major focus now, is getting new snacks out, something I haven't been able to do for a few years just with all the logistical and nightmares I've been talking about and everything just being on my shoulders. We have the agencies on board, so we're aggressively scouting marketing now, going into heavy customer acquisition, and then just trying to roll out the new products over the next hopefully two to three months we'll get a few out there. That's just the main goal, just new products, more customers, growing the brand.

Brett Curry:

New customers and going hard new customer acquisition.

Nick Raccuia:

Acquisition, yeah.

Brett Curry:

Now is the time to do that. E-commerce is still hot, even though as we record this the world is opening back up. It's pretty open in my part of the world, my part of the country. But e-commerce is still growing, so now is a great time to double-down on new customer acquisition.

Nick Raccuia:

Yep.

Brett Curry:

Anything you've learned from the agencies you're working with? Has your mindset shifted at all when it comes to new customer acquisition from what it was pre-agency?

Nick Raccuia:

Mm-hmm (affirmative). Honestly, the biggest mind shift I've had with customer acquisition actually came from Ryan during our meet-up last month, where I was just hesitating because self-funded I've always had to focus on profitability, like "Hey if this isn't making money, I'm not going to be able to pay myself or eat, so it needs to be profitable," whereas when you have an investor funding, and you have a customer acquisition model where it's okay to break even or even bleed a little bit up front. You can be a lot more aggressive on customer acquisition. That's been the biggest mind shift probably all for me actually, which is just like we're going to aggressively focus on top line revenue and customer acquisition.

Nick Raccuia:

We understand if we're going to bleed a bit for the first few months on acquiring those customers, like the lifetime value, getting customer information and data, and then new product launches coming down the pipeline. We'll definitely be able to recoup that cash. That's definitely been the biggest shift.

Brett Curry:

Awesome. As an ad guy, I'll speak to this a little bit, we have some clients come to us and say "Hey, we need to hit a 5-6X ROAS," or return on ad spend. "So, for every dollar we spend, we need to get $5.00 or $6.00 in sales." That can happen on some channels. On other channels it's not really possible. What happens you say "Hey, I can actually do it 2X," so spend it all and get two, or even in some cases spend it all and get a $1.50 because you're all about new customer acquisition and growing. That doesn't just allow you to double your spend or triple your spend. Sometimes it's like a 10X increase in volume on what you can get from your ads because to get to that 500 or 600% return on ad spend, you have to be so focused and so narrow in what you're doing that you're really limited.

Brett Curry:

So, if you can, if you have the funding and if you're able to break even on new customer acquisition because you know what your lifetime value is, or you have funding, then you can do some really creative stuff with advertising and grow so much faster. Awesome. Good for you, that you're doing that. Fantastic man. If people are listening and they're thinking, "Man, I'm hungry. Keto or no keto, I want to try the brownie," how and where can they find your products?

Nick Raccuia:

The best place is just either my website, KetoBrownie.com, or Amazon, you can search "ketobrownie" all one word. We have three flavors: peanut butter chocolate chip, blondie cookie dough, chocolate almond. Those are the best places to try it. I would highly suggest you microwave them for 15 to 20 seconds.

Brett Curry:

You know what's weird, I've eaten a lot of these things now. I've never tried the microwave thing.

Nick Raccuia:

Oh, you never tried it?

Brett Curry:

Dude, I don't know why.

Brett Curry:

I think I've heard you mention that before and I've never tried it. That will be next on my list is to microwave the brownie and give it a shot. Also, if they go to your site and sign up for your list, then they'll know about new product releases, and these two new amazing products that are coming out soon.

Nick Raccuia:

Yep. We have a popup for a discount, or you can just go to the footer and sign up for the email list and you'll start getting emails from me.

Brett Curry:

Awesome. Nick Raccuia, ladies and gentlemen. Nick, thanks for taking the time, man. This was a lot of fun. Really excited about the business, and excited about where it's headed. I can't wait to be a small part of it as you continue to grow and take over the world here.

Nick Raccuia:

Yeah, definitely. I appreciate you having me on.

Brett Curry:

All right man. Sounds really good. As always, thank you for tuning in. We'd love to hear from you. What ideas do you have for the podcast? If you haven't done it, we would love that five star review on iTunes. It helps other people discover the show, and makes my day. With that, until next time, thank you for listening.

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While getting free PR for your brand isn’t easy, it’s not impossible. And the rewards can be huge. Great companies and CEOs have always understood this. From Steve Jobs to Walt Disney to Richard Branson and others. Free press can be worth millions to your brand. And you don’t have to be as dynamic as Richard Branson to get free PR.

Ali Karsch is the co-founder of LVPR, a PR company that works exclusively with cool DTC brands like NATIVE, Cloud Paper, Everyday Humans and many others.  

In this episode, we condense Ali’s 15+ years of PR experience into a power-packed interview.  We cover the most important topics so you can start getting free PR now for your brand.  Here’s what we discuss:

• When’s the best time to engage with media?
• How to craft a compelling founder story that the media is eager to share?
• How the pandemic has made getting PR easier (and harder)
• LVPR’s 5 Rules for brands it works with
• What is commerce/affiliate PR and how it’s changing the PR game.
• Plus more!

‍

Ali Karsch

Via LinkedIn

Little Voice Public Relations

Mentioned in this interview:

Moiz Ali

Native Deodorant

Sara Blakely

VINEBOX

Adweek

TechCrunch

Hero Cosmetics

BOOM! by Cindy Joseph

Usual Wines

Live Bearded

Everyday California

Clubhouse

Retail Brew

Marketing Brew

Morning Brew

Episode Transcript:

Brett:

Well, hello, and welcome to another edition of the eCommerce Evolution Podcast. I am delighted that you have tuned in today, and I am super excited about today's topic. This is not something we've ever talked about at length on the podcast, and that was a shocker to me because this is really, really important stuff. Today, we're talking about PR, PR for your e-commerce brand. If you're an agency owner like me or run a SaaS company, we may sprinkle in a couple of nuggets for you as well, but going to focus in on those D2C brands today.

Brett:

My guest today is Ms. Ali Karsch. She is a PR specialist, 15 plus years in the industry. She's the founder of LVPR and been running that company for about five years.

Brett:

We actually shared a client for a number of years, Native Deodorant. Ali and team worked with Moiz at Native Deodorant, as they were scaling and growing on their rocket ship trajectory. That was a fun connection that we have as well. Of course, we run the Google and YouTube for Native to this day. With that intro, Ali, welcome to the show. How are you doing? Thanks for taking the time.

Ali:

Thank you for having me. I'm good. I'm loving the state of our industries right now. I think it's been really fun to see the comeback of the D2C world. I'm excited to chat with you today.

Brett:

Yeah, me too. I love good brands. I love fun, consumer brands. I've always loved media. I love advertising. Obviously, I'm an ad guy, but I've always loved just how good brands appear in the press. I'm super excited to dig into this topic because I don't understand PR that well. Of course, I've talked to a few people, have a little bit of knowledge, but it's not an area of expertise.

Brett:

I partially want to selfishly just ask you questions that I can use for my business, but I'm going to definitely ask you more about D2C brands and we'll all get benefit from this. So if you don't mind, Ali, give me the quick background, how did you find yourself in PR? Was this the dream? Was this the dream since you were a little girl or how did this come to be?

Ali:

No. I think I wanted to be in fashion, probably like every girl. I was in marketing in college, in business and marketing, and thought fashion marketing was my passion in life, and quickly learned it was not after doing an internship in New York City with Giorgio Armani. I learned very quickly, and stumbled into PR and I really loved it.

Ali:

I think the thing I like most about PR is just that every day is different and every client is different. It never feels like you're tired of doing this job. For me, I have ADD and so that just really works well for me. No, I loved it. I started out, my first job was in PR and I've continued since and grown in different capacities. I really enjoy the industry.

Brett:

Your original job was at a PR firm or you were working at a media outlet for a PR firm?

Ali:

I've always worked with agencies only. I've never worked on the flip side, but I have so much respect for the editorial world.

Brett:

It's so interesting that our two worlds are quite similar, PR and advertising. They have a lot in common if you think about it. I love the fact that no two days are the same for me, either. Every client is different, every challenge is different and I've got to have variety or I go crazy. At the end of the day, what we're both doing is telling good stories. We're taking the story of a brand and bringing it to life in our respective medium. We do it with Google ads, and YouTube ads, and Amazon ads, and you're using media. I want to dig in, lots of stuff I want to talk about.

Brett:

The first thing, you had mentioned, as I was getting to know you and getting to know LVPR, you talked about one of the requirements you guys have before you work with a brand, is that there has to be a good founder story. Can you talk about what that is? I think there are potentially some people, who are too humble and they think, "I don't have a good story. I'm just a guy or a gal that started this business and what's interesting about that?" What are some of the elements of a good founder story and what does that look like?

Ali:

Yeah, you're right. A lot of founders don't ever want to talk about themselves and we have to push a lot of them. But what we really do best with is products that came from a purpose. So usually if a product was created by, let's say it's a female product and it was created by a male, it's really hard to tell that founder story.

Brett:

I created this because I wanted to make a lot of money.

Ali:

Yeah, and that doesn't translate.

Brett:

I can get into capitalism too, but that's not a really compelling story.

Ali:

Yeah. We really like to work with brands where they found a problem and developed the product out of a need for a solution. And because of that, they're like emotionally invested in the product. Therefore, the customer base aligns with the product so much more deeply because they realize how invested the founder is.

Brett:

Like a Sarah Blakely, the founder of Spanx, and how she made the original 100 pairs at her kitchen table, and she made it because all of the options were terrible for women at that time. That type of story.

Ali:

Right, exactly. We're working with a brand right now that it's a father that created his product. And it was once he had children and he realized that there was chemicals in diapers, and there was chemicals and baby wipes and they were all working together unfortunately, to be not the safest option for his child, he created a new product out of it. It's those moments of realism that help customers connect to the products, and we like to be able to make those connections and tell that story in that capacity.

Brett:

Yeah. Even Moiz Ali, founder of Native Deodorant, really realizing that there weren't any good, natural deodorant options. He read the label of a deodorant stick and realized, "I don't know what any of these ingredients mean. I don't even know how to pronounce most of them." That was the impetus to and there's some family connections, I think, too. Maybe a pregnant sister? I could be making that-

Ali:

He was trying safe option for his sister and he couldn't find one so he had to make one.

Brett:

Super cool. Then how do you uncover what are the elements that you should talk about? I think there are twos ends of the spectrum. I think there are people that don't like to talk about themselves, they've lived their story so they don't think it's interesting. Then there are other people who don't mind to talk.

Brett:

I have several people like this in my life where they don't mind to talk, but they want to share every detail and really not every detail is interesting. How do we know what we need to share? What's the compelling part of the story that we do need to share?

Ali:

Well, so we do a tactic called media training. That's where we work with those individuals that have a lot to share and we need to help them condense what they need to work on. In that capacity, it's really just writing a narrative for people and helping them stick to their and saying, "What's the point? What are we trying to communicate? What's the end goal? Selling the product." So just really trying to stick to those key message points and not going too far outside of the box because you lose your audience once you do.

Brett:

Have you ever seen the movie Hitch with Will Smith where he's coaching people on how to date, and not be annoying and stuff? I love the line where he says, "People want to see the real you, but they don't want know everything about you."

Ali:

Exactly.

Brett:

Be authentic but don't share too much because we don't care. I thought that line applies to PR, and advertising, and dating as well. Let's talk a little bit about when is the right time to look at PR. If I'm just coming up with my business idea or a new product idea, is that the right time? Do I have to have a certain amount of traction and success before I say, "Now's the time to really consider a PR strategy?" What should I be considering in my business before I go down the path of trying to get PR?

Ali:

This is a great question and I think it's one that we find people come to us the most and don't know the answer to. I'm going to labor on this one a little bit.

Brett:

Love it.

Ali:

There're multiple points, honestly, but brand launch for sure, is the time to invest in PR because it's the moment you tell your brand story from the start. So there's a lot of times where brands will choose to soft launch. While sometimes that's necessary due to funding or for whatever the case may be, you really miss that moment of being able to get out from the gate and say, "Here's who we are and here's what we're doing," so I recommend brand launch.

Brett:

Really that brand launch with the founder story, that combo is pretty compelling. We all like new things, media outlets like to talk about new things so that combo is pretty good.

Ali:

New things and new products. If you're a new category or if you're introducing something that's not out there, that's your moment. Brand launch, for sure. We always recommend if you're wanting to talk about it, if you fundraise, fundraising is a great time to also get out there and talk about some news.

Brett:

Is that typically because business publications will pick up on that? Also, I guess, some consumer pubs will pick up on that too.

Ali:

A lot of times buyers. If you're trying to go into retail and if they see somebody did a large raise, then they know now they have the capacity to produce more product and could be ready for retail.

Brett:

It's way to leverage PR to potentially get in to retail distribution, if that's a goal.

Ali:

Totally.

Brett:

Nice.

Ali:

It's trade press. It's not huge consumer news, but it's definitely traded industry news that could really be helpful in furthering your business. New product launches are always a time when you want to put PR behind your business and then seasonal moments. For us, our biggest time of the year is holiday. We have a bajillion brands that always come in October 1st and say, "We need your support for holiday." And it's like, "Well, you should have thought about that in July because that's when we start pitching for holidays." Just understanding what are your seasonal moments, and when do you need a hard consumer product push, and then working backwards.

Ali:

So to that point, I'll share with you, Brett. If you are a brand that likes print coverage or long lead coverage, which is like magazines, we start pitching for holiday in July. You need to have your assets, you need to have everything. It's crazy, which it's right around the corner. Then short lead wise, so that would be like online gift guides, broadcasts, anything on a shorter timeline, we start pitching in September. You need to have all of your ideas, product development, images ready ideally in August.

Brett:

That's awesome. One of the things that I think people struggle with, at least in conversations I've had, it seems like people struggle with this. When we approach holiday, we're thinking about what promotions are we offering? What discounts are we offering? What is the theme of our event surrounding holiday and what's that messaging?

Brett:

That's not what gets you the press coverage. You're not going to say, "Hey, I'm sending out this press release because we have 20% off for the Christmas and New Year's." Whatever, that's not interesting. What are the angles you should look for? You mentioned something like a buying guide, but can you elaborate on that? What should we be looking for? Almost everybody listing for holidays, huge for them. How do we make holiday newsworthy?

Ali:

Well, it's such a good question. It's one we struggle a lot with, for our brands because well, I'll just say advent calendars have been huge for us the past three years.

Brett:

Advent calendars?

Ali:

Advent calendars. We work with VINEBOX and they do vials of wine, and they have done a 12 nights of Christmas or 12 nights of the holidays' advent calendar every year. It sells out-

Brett:

Let's face it, a lot of us could use a vial of wine for the holidays. You got kids, you got family, you got shopping.

Ali:

It literally sells out in October. It's crazy. Advent calendars, it's become a trend where a lot of outlets will cover advent calendars. We have coffee advent calendars, you have dog treat advent calendars, just like gimmicky things work.

Brett:

Who do you find is picking that up? You may have just made up the dog treat.

Ali:

No, I don't think I did.

Brett:

You didn't. I wonder if there was a story. That's awesome. Who's picking this up? What outlets are discussing the doggie treat advent calendar?

Ali:

Every outlet will do a wide range of gift guides. Refinery 29, Cosmo, Women's Health, GQ, Esquire, all of these outlets will cover this category throughout that seasonal three months. Pretty much, if you do something gimmicky like that, you're pretty much guaranteed you will get coverage, which is great. There're different categories of gift guides, and sustainable products is one that always does really well.

Ali:

Products with a give back, so if there's like a percentage of sales going to something, those always do really well. Bundled gifts, things that are just themed for the holidays do great. You just have to think along those parameters and make sure you're packaging your products in a way that's going to do well in these guides that already exist.

Brett:

Cool. Most of the time when you're showing up in gift guides, these are online gift guides, I would assume like in Cosmo or Refinery 29 and stuff? Are these showing up in print very often or is it mostly online?

Ali:

No, they do and those ones change every year. The biggest one that everyone wants to be in print is Oprah's Favorite Things. That comes out in November every year. They usually put together their lineup in August.

Brett:

Now, is that something you can influence? Are you pitching Oprah's people ever or does Oprah just decide these things?

Ali:

No, you pitch. There's a gift guide editor you pitch, and they're very picky, but Oprah picks everything. There are, I will say, a little trick of the trade. In the past couple years they've been associated with Amazon. If your product is available on Amazon, you have a much better chance of being included.

Brett:

Interesting. Oprah really digs Amazon. Is she doing that because it's easy to do?

Ali:

Because of the commission.

Brett:

The affiliate commissions.

Ali:

That way they earn off of it.

Brett:

Got it.

Ali:

So they get affiliate commission if purchases go through Amazon.

Brett:

Interesting. That actually is a great transition to another question. I know there's affiliate PR and commerce related PR. Then, of course, there's what everybody thinks about, the editorial PR. One thing that was a revelation to me a number of years ago that that may or may not be a shocker to people listening, is if you were to search top whatever product, top hearing aids, top noise canceling headphones, top, whatever. You look at those organic results on Google and you click on some of those. There's a top 10 list, or a top 50 list, or whatever. People are usually paying for all of those positions.

Brett:

Someone has done the expert work to get that page to rank in the search engines. Then they're charging people a couple 1,000 dollars or more to be in that list. They're making money. Oprah, it looks like she's picking the product so she really does like it, but she's also getting an affiliate commission from Amazon. None of that is wrong per se, it's just important to know. It's also important then to understand probably some people, when they hear PR they just think editorial. Can you break down those two worlds a little bit and how should we approach them?

Ali:

Yeah, for sure. It's honestly something that's really evolved in the PR world over the past, I'd say, three years. Previously, affiliate links was never apart. It was very much church and state and now it's different. I get it. It makes sense. I would say 50% of what you would consider editorial placements are commerce placements that means-

Brett:

Paid affiliate placements.

Ali:

They're not paid. In your world, I think people maybe bump them up. In our world, it's more that you are guaranteeing a certain percentage of commission if they use your affiliate link. Let's say they do a roundup on the best natural deodorants, and they pick Native, they pick Curie- .

Brett:

Lume.

Ali:

They pick Myro, whatever, all of these other ones. And each product, in order to be in that list needs to provide an affiliate link. It's either to their D2C site with a percentage of commission, or to Amazon or to Target. And the way in which an editor decides which affiliate link to use, is based off of how much commission the retailer is providing. So we tell our clients that they should always compete with their retail partners, because if Target offers 20% and you're only offering 12 on your site, they're always going to pick Target.

Brett:

Always.

Ali:

So those are just things-

Brett:

People might pick Target anyway, even if the price is the same, because it's easier to buy from Target in some cases. We deal with that same thing all the time where we're running Google traffic, Google shopping traffic, whatever, YouTube traffic, and then sometimes the brand is 20% more than everyone else. We're like, "Guys, this is okay if all you want to do is educate, but they're not going to buy from you. They're going to buy from Target, or Amazon, or one of these other places."

Ali:

Right.

Brett:

Same is true in the PR world as well.

Ali:

Yep. It is. It's okay. We know it's happening and we help our clients make sure they're set up to succeed in that category. It's something that if you are doing PR and you are not with an affiliate network, you're really missing out.

Brett:

Got it. Got it. Totally makes sense. Is PR something we should do all year long? So if I'm a D2C brand, holidays huge for me, but obviously I'm selling stuff year round, should PR just be an ongoing initiative? Or does it become too hard to get coverage in the off season so I just should focus on those seasonal hotspots? How should we approach that?

Ali:

That's a good question. I think it's different for each product, honestly, or each brand. If you're a sunscreen brand although you should be wearing sunscreen all year long, the amount, the majority of coverage is spring through fall. I would maybe-

Brett:

Maybe you can do an interesting piece. Now that I'm talking to you, my PR brain, which I didn't know I had, clicking on. But maybe something like, "Hey, you're hitting the slopes. What a lot of people don't know is you could actually get sunburn while you're on the slopes. Using sunscreen while you're snow skiing," or something like that could be a fun angle.

Ali:

Totally. Listen, I used to work on Supergoop! and I've also worked on Everyday Humans, it's just another sunscreen brand. But the reality is the amount of articles that are published during that time, even if you're pitching those stories, which seems like it should work, they don't run. If a brand came to me, I would say, "Yes, maybe you should prioritize your timeline of PR," but we encourage our brands to have enough to talk about for a whole year so that PR is always on.

Brett:

Nice. It totally makes sense. It also makes sense, I guess, to come up with that annual plan, that editorial calendar, but just know that there's going to be certain times a year when you might not get the coverage you want. That this stuff might just not run because while you can't get sunburned snow skiing, maybe that's not a very compelling story or there's other breaking news. Well, whatever, it just doesn't get run.

Ali:

Right.

Brett:

Got it. Any tips then? How should we get started on this editorial calendar for our PR push? Should we just mainly think seasonally, what's what's seasonally relevant to our business and the PR outlets will care about? How else would you recommend looking at that calendar?

Ali:

So what we typically encourage our brands to do is share with us. Yes, their product dev calendar so that we can align a calendar of our pitch angles to support what is coming in the innovation pipeline. But then, and I think this leads to what you guys do, Brett. Then we also encourage them to introduce us to all their agency partners so that we understand, "Okay, are you running a certain ad campaign during this time? Are you running a really cool SMS campaign? What else is going on in your world?"

Ali:

Because something that's been really effective for us, for a lot of our brands, because I think D2C brands just do the coolest marketing initiatives, is getting marketing coverage. When there's a slow product time, but there's a sick SMS campaign that is just converting like crazy, then we'll go out and tell that story on behalf of the brand, on behalf of their agency provider and-

Brett:

Can you just use that example? You would tell that story to marketing publications, B2B publications that would be interested in an SMS campaign story?

Ali:

Yeah. We'll do Ad Week, we'll do Tech Crunch, whatever the specific initiative is, but we'll go and find the coolest or the most top tier placement for them to tell that story so that it keeps the pipeline full. It also shares just how this company is really growing from a case study perspective that usually brings in investors.

Ali:

There's a lot of just buzz that comes out of it. So we try to make sure that the entire year there's always something we're talking about. When there's a quiet moment on the product side, you focus on a founder story or a brand story, and just really try to keep everything a buzz so the brand never is not top of mind.

Brett:

I love that. I love that. That's super powerful. So I know one of the things you talk about too, it's a requirement to work with your firm. There's a requirement, I'm sure, to show up in media outlets, but you talk about having a good product.

Brett:

I know no one listening here would say, "My product's pretty average. It's pretty, too." Are there any specific criteria you're looking for there? The reason I'm asking this question is just this might be helpful for people to look at their own product and evaluate how interesting is this product to media outlets.

Ali:

Yeah. It's a great question. Honestly, I think it's a personal opinion just from my perspective. I do base, for instance, we used to have a pimple patch brand called Hero and they're amazing. They really dominated the space, they were out quicker. We had another pimple patch brand come to us to, and say, "We want to work with you."

Ali:

I had to turn it away because I was just like, "You're just not as good as what's already out there." I didn't say it that way but at the end of the day, you can't compete with what's already working in the marketplace. You really have to be aware of where are there holes, and how are you solving that problem? If it's already solved, it might not be the best to pursue.

Brett:

Yeah, totally makes sense. What you guys do, again, there are comparisons to what we do. It's a close partnership, and you're pouring your heart and soul into to getting these ads to work on our end, or getting these stories picked up and for there to be traction. And if all you're doing is coming in a little cheaper than what's already out there, and you're not as good.

Brett:

We one time and I'm almost positive, this business is defunct so I think it's okay if I mention it. It was 99 cent razor club. We're like, "Oh, okay." Instead of a dollar shave club, it's a 99 cent razor. Anyway, but there's not a real compelling story there. Nobody wants to save a penny really so there's got to be something compelling there.

Ali:

Right.

Brett:

But it is subjective. What product we like best is subjective. Super interesting. I actually want to go back to a point we were just on, because I think we need to go a little deeper in it. That's coordinating amongst the agencies. A quick example from the ad world and I think this would totally tie into what you guys are doing. So we've had a number of our brands that have appeared on Shark Tank. A lot of times they come to us after they've already had their first appearance, and now they're gaining traction, and they're really growing.

Brett:

But then on occasion, Shark Tank will re-air their episode and we always have to be ready for that. We'll see their branded search terms, as an example, their branded search spend will sometimes three X what it normally is. On the agency side, we've got to get budgets ready, we've got to get bids ready. We've also got to think about, "Hey, when someone sees this episode, what might they be searching for?" They might type in it's this type of bracelet on Shark Tank, or it's this type of baby product. If they don't remember the brand, but they remember seeing it on Shark Tank, what keywords will they be typing in, things like that.

Brett:

How do you recommend and how do you guys typically work with other agencies that are serving your brands, whether that's search, or creative or TV, or whatever? How do you help coordinate with PR efforts?

Ali:

Great question. I'll give you an example because we just did this for Earth Day. We work with Cloud Paper, which is a bamboo toilet paper brand. They were doing this really cool initiative called flush.com.

Brett:

What's flush.com?

Ali:

Flush.com. It was a fake microsite that told people that if they wanted to purchase toilet paper, they should come here and pick which forest they wanted to cut down in order to get their toilet paper because they're all about saving trees. It was awesome. Robert Downey, Jr. and Ashton Kutcher are investors in the brand so there's a lot of comedy that comes-

Brett:

It's called Cloud Paper. Obviously, it's a serious problem.

Ali:

Right.

Brett:

Sometimes though, the way you attack a serious problem is with some humor. Okay, great. You want toilet paper, so which of the rainforest would you like destroy? It's funny, but also really opens your eyes to aha, there is a deal here. Flush.com, I'll check that out. Did you guys help inspire some of that?

Ali:

No, we cannot take credit for it. That was their idea. But point being is that-

Brett:

But you helped them leverage it, and get traction, and get visibility behind it?

Ali:

Yeah. They have a marketing agency that came up with this idea and then they had a social play, we had a PR play. We were all collaborating to break this news basically right around Earth Day. And so we had to put together a marketing calendar that we each affected and put in our timeline, our pitch structure. And so that we all made sure that what we were doing, wasn't going to trump the other person's news, because we did have an exclusive with Tosh Company.

Ali:

Actually, the exclusive was with that company. If anyone went out first before that piece, then it messed everything up. Long and short is we work, we do multiple calls. We all are aligned on the strategy and work together to make it successful. But if you don't sync up, there is a lot of room for error. So I just recommend calling that out from the start when you think something could have PR legs, making sure your PR team is looped in on any of the other agency sides.

Brett:

So this may or may not be an area you guys spend a lot of time in, but I see that there's value in always creating the next new piece, and always getting the next new story to break or to be covered about your business. But I think there's also something powerful about leveraging the same story. Getting the same story told over and over again in multiple, media outlets. So any advice? When do you know, "Hey, let's just double down on this idea and try to show this everywhere versus let's move on to the next idea?" Any advice there?

Ali:

That's a good question. I think it's really case by case. It comes down to what is the media gravitating towards? If they keep covering the same heats of your business or the same component, then don't let it go. Just keep going with it. Then they'll be some new-

Brett:

Slightly different angle, slightly different wording, but essentially the same thing.

Ali:

Yeah. We have a wine brand, Usual Wines, and they're natural. They're sulfate free, there're no sugars added. And as much as we try to branch out from that, that's what everyone is really interested in right now. We just keep going back to that angle, but there's more to them.

Brett:

But that's the angle people care about. Maybe they can sneak in some of those other elements when they're talking about all natural, and sulfate free, and no added sugar, things like that. You got to give the people what they want. You got to give the media outlets what they want. One thing that I'll underscore, is that once you do get a couple of really good pieces you get a TV segment, you're on Shark Tank or there's something big, you can leverage at forever in my world if you want to.

Brett:

As an example, Boom, by Cindy Joseph, Ezra Firestone's company, partnered with him for five or six years now. They still use this ABC one, or ABC seven, I don't remember, story from New York City. An interview with co-founder, Cindy Joseph, on how she broke into modeling late in her career after she let her hair go gray. Then she started the company with Ezra. It's an awesome story. We've been running that story, that clip, for six years and it still works.

Brett:

We're chopping it and doing different things with it. We're about to do this new production that we're super excited about, but we're still going to use elements of that and it still works. So I think that's also the power of why it often makes sense to hire a company like yours, even if you don't get that long of a run of PR. Let's say it's a short lived run or whatever, you can still leverage it forever almost.

Ali:

Totally. Honestly, that's how I started out doing D2C PR was brands would come to me and say, "I just need a really cool headline or I need," we call them love letters, but they're like standalone pieces just so that they could put ad spend behind it. That's all they cared about was turning, flipping their PR hits into an ad and continuing to push it. Yes, that's what we do a lot too.

Brett:

Yeah. Totally makes sense. So I want to talk, people are obviously getting a great insight into what you guys do but talk a little bit about the agency. What makes you guys different and what are you proud about with the agency? Then I want to dig into that a little more.

Ali:

Oh, thank you. What am I proud about? I think we work with really cool brands that are doing good things. And that, for me, when I started at LVPR was really important to me. I didn't want to just work on any brand. I wanted to work on a brand I really believed in.

Ali:

So we have five pillars that you have to check the box on in order to work with us. And they are a strong founder story. If it's a female founder, even better. They need to have passion, or cult-like, passionate followings. They need to be cool brands.

Brett:

I remember we talked about that a little bit in prep, but we didn't dive into it. How would you put parameters or how would you define that passionate, cult-like following?

Ali:

It's hard to put it into words, but I'll give you a couple brands as examples and I think it will make more sense. Glossier, Away, Native is one too. Any brand that starts on a D2C site and then goes into retail and their customers get there quick enough to touch it in person. Those are cult-like followings, where they tell all their friends about it, that they are just so obsessed with the brands and the products. Usual Wines is another one. Every time they launch a new product-

Brett:

I'm sorry. What was the last one?

Ali:

Usual Wines and it's a single serve wine brand. Every time they launch a product, they open it up to their email and SMS space first. No lie, it always sells out because their customers are just like, "Yes, another new something." That's the idea of-

Brett:

That speaks to really great product design. It speaks to community. It speaks to a lot of things. Usually those companies have to be doing something good as well, or else people wouldn't be paying attention. We see the same thing, by the way, with Boom by Cindy Joseph that I just talked about. Another client, Live Bearded, a shout out to the boys at Live Bearded. Great personality behind their brand. They sell out with every new product release just to their list, which is pretty cool.

Ali:

Yeah.

Brett:

It's a cult-like following. Then it's a strong founder story, cult-like following, then what's next?

Ali:

Products that we would use in everyday life. Things that we really like. A charitable give back or a B Corp, so an element of charity and sustainable. They need to have an element of sustainability in them. If they're fully sustainable, even better. But those are the five that we really gravitate towards. And we also, and you will probably understand is that we don't take on toxic clients. We're here to have drama free, really great relationships.

Brett:

Life's too short, man. Life's too short to work with drama queens. Sometimes, drama queens are dudes. Often, they're dudes but we don't want to work with the drama, for sure. One thing I'll speak to about both the charitable element and the sustainable element is not only are those two elements the right thing to do, we should do that.

Brett:

There's such a benefit with your team as well. If you're debating, thinking about it, should we have a charitable component, and even talk about that a little bit, publicly or sustainable component? I think the answer is yes, you should.

Ali:

Totally.

Brett:

I think what the best thing to do is find a charity that fits your business. My buddy, Chris Lynch, at Everyday California, their stuff is about ocean preservation. Because they're right on the ocean and they've got an adventure side and an apparel side so it's all about the ocean. We're an e-commerce agency, we're a business so we actually really believe in microloan programs, and helping widows start businesses in other parts of the country, and helping at-risk teens like get life skills.

Brett:

We've got a couple of different charities that we partner with that resonate with us. And so what happens was your team gets excited about that. There are those moments when you need something more than business to drive you. Having those components for your team is powerful. And then as we share it, it does attract customers or it helps seal the deal a little bit. I think also, as you shared, it encourages other people to give and be charitable too, which is cool. Then sustainable, everybody's looking for that. We need to do that. Why wouldn't we do that at this point?

Ali:

Yeah. I think customers and consumers are holding brands more accountable in these initiatives and they expect an impact. They expect elements of sustainability and if you're not doing it, they ask you why.

Brett:

When you think about it, now this is and we're going to delve into a topic that we've never talked about in the podcast before, cryptocurrencies. I just recently started dabbling in cryptos. I don't know much about it, but I'm still dabbling a little bit. But at the time of this recording now, who knows what's going to happen when this episode actually publishes. The world of crypto could be totally different. Right now, Bitcoin is tanking.

Brett:

It's down like 50% yesterday or something like that. Part of that was driven by Elon Musk and him tweeting. As he tweets, cryptos react but he was talking about the fact that Bitcoin is not very green. The mining process of mining Bitcoins is not environmentally friendly, uses a lot of energy. It's things like that, who would've even thought crypto, it's all in the cloud, it's all make believe some people say. It's not really, but even that is driven by sustainability so it's a big deal. It's just a big deal.

Ali:

Totally.

Brett:

Cool. Awesome. So if someone is listening and they're like, "Man, I've got a cool brand and I fit those criteria," then they should reach out to LVPR and that's just lvpr.com, correct?

Ali:

Yes. Correct.

Brett:

Fantastic.

Ali:

We're here for you.

Brett:

This has been super good. I guess the last thing or things I would ask is what if someone is just really interested in this topic and maybe they want to dive in more, learn more? Do you guys have any free resources that you would recommend, or do you have any favorite books, favorite podcast, favorite resources that could really get someone on top of their PR game?

Ali:

Oh, that's a good question. What do I like to read? I don't read a lot about the industry because I know a lot about it.

Brett:

What do you like to read though? This is just a fun question.

Ali:

I love to read thing testing. I love to read Cassandra. Look, there are a lot of random, trend based stuff, but my recommendation honestly, would be to go to Clubhouse. I just feel like they're so-

Brett:

Clubhouse.

Ali:

Yeah.

Brett:

Really?

Ali:

I just think there's so much knowledge on Clubhouse.

Brett:

Who should we follow on Clubhouse?

Ali:

There's a lot of people who I would follow.

Brett:

I'm totally putting you on the spot here, by the way. This is so interesting and thank you for allowing me to ask you just random questions because I do this, I prep with it. I want to ask you-

Ali:

You caught me off guard. I wasn't ready for that.

Brett:

So I downloaded Clubhouse and I've been on there a little bit. Some of my friends are on there. I still don't really get it. I understand the concept. It's not one of those things where I want to go hang out in Clubhouse. I haven't gotten there yet, but there's- .

Ali:

I don't spend a ton of time there.

Brett:

What's that?

Ali:

I don't spend a ton of time there. The cool thing about Clubhouse is that you can pick clubs. I'm just looking at mine right now, but there's a startup CPG club or there's the commerce club. I follow a lot, there's club CPG, which is a really good one.

Brett:

Club CPG, all right.

Ali:

Yeah. So if you go into those clubs, there's going to constantly be different conversations about different industries. From there, you'll find, you'll see a room that a lot of people are in. Then that's where you want to go. You're just like a fly on the wall of these interesting conversations.

Ali:

If you don't like it, you pop out of it. I have found it's been really interesting. I've listened to a couple marketing conversations about how CPG brand, they're leveraging QR codes right now and they're having sick success. I never even thought of that for my brand right now.

Brett:

It's funny because QR codes are not new. They've been around since before 2010. For a while, people were like, "This is going to be the biggest thing," and then they went nowhere. Now, they're suddenly back, and interesting, and relevant.

Ali:

Yeah. So I don't know. I find it more interesting to just listen in and see what people are talking about, but it's a time suck. It's audio so you can do it while you're working.

Brett:

While you're working, while you're driving, while you're working out, whatever the case maybe. That's fantastic. Any other recommendations to increase our learning about PR?

Ali:

I like reading. I just read a lot because I think it's you can see what other brands are doing successfully. Ad Week, New York Times, Wall Street Journal, all of the big business pubs I think it's really smart to read. Retail Brew, Marketing Brew, those newsletters in the morning.

Brett:

Morning Brew is one of the best email newsletters ever.

Ali:

Totally.

Brett:

It's really funny, really witty, but also, it's a nice digest of the news that's going on. Then there's also Marketing Brew. Retail Brew, I've not paid attention to that.

Ali:

Read it. It's good. Yeah. They're all in the same family, but they're great.

Brett:

Cool. And do you recommend that people say, set up Google alerts or something for their competitors' brands and things like that to watch how their competitors are getting press and things like that?

Ali:

Competitor brands or even just industry terms. If maybe you're in the theater industry and you don't know if the new competitor's coming in, if you just put that keyword in, then you can also get fed that news.

Brett:

Yeah. Awesome, awesome. Ali Karsch, ladies and gentlemen. Ali, this has been so much fun. You nailed it. I will link to everything in the show notes. If you're like, "Man, I need to connect with Ali and team," I'll link to that all in the show notes or you can check it out at lvpr.com. I did get that right, it's lvpr.com?

Ali:

Yeah, you're right.

Brett:

With that, thanks, Ali. It's been a ton of fun. Appreciate you taking the time.

Ali:

No problem. Talk you soon. Bye, guys.

Brett:

See you. As always, thank you for tuning in. I would love to hear from you, love to hear feedback on the show. What other topics would you like us to discuss? And if you haven't already, leave that review on iTunes. Makes my day and allows other people to find the show. With that, until next time, thank you.

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Justus Murimi is a guy that once you meet him you’ll likely never forget him. Why? Justus is one of the best askers of questions that I’ve ever been around.  I first met Justus at Ryan Daniel Moran’s lake house in Austin Texas. It was a meeting of eCommerce investors. I was part of a group discussion with Justus and he was asking insightful question after insightful question. Then I had a chance to spend some time with him and we immediately hit it off. He has a knack for understanding entrepreneurs and helping them get unstuck.  He’s the Community Manager for the One Percent with Ryan Daniel Moran.  He’s also the head coach of the Incubator.  Every week he’s coaching, teaching, and mentoring eCommerce businesses at every stage of growth.  

I LOVE this topic.  While we don’t get super tactical, I believe this episode could prove to be one of the most helpful we’ve ever published.  

As entrepreneurs we’re all prone to getting stuck. And it’s not just a one time deal. Depending on the stage or growth your business is in, you could get stuck for a variety of reasons. In this episode, I turn the tables on Justus and fire probing snd insightful questions his way. Here’s a look at what we cover. 

• How early stage entrepreneurs are most likely to get stuck. 
• How to overcome overthinking and gain a new frame on failure
• Where growing businesses get stuck and how some entrepreneurs develop a messiah complex. 
• Where business owners fall short when preparing for an exit. 
• What role does fear play in getting stuck and getting unstuck

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Justus Murimi

Via LinkedIn

Capitalism.com

Mentioned in this episode:

Ryan Daniel Moran

https://www.capitalism.com/

“How Google Works” by Eric Schmidt

“What Got You Here Wont’s Get You There” by Marshall Goldsmith

“Who Not How” by Dan Sullivan

Blue Ribbon Mastermind

Poo-Pourri

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Who doesn’t love eating cookie dough with a spoon?  Having a tasty product that customers crave is helpful. That’s part of the reason Doughp (pronounced like dope) has been so successful.  But for the real reason behind Doubhp’s amazing growth, look no further than the co-CEO team of Kelsey and Is.  Not only are they co-CEOs, they’re also married.  And they produce some addictively good cookie dough that’s shipped directly to your door 

There’s a lot we can learn from Doughp both from a branding and eCommerce growth perspective.  

Here’s a look at what we cover:

• When you get your branding right, marketing becomes easy
• How to detach and make unemotional decisions
• How to be fun, relevant and also have a serious mission side to your business
• How and when to pivot 
• How to scale operations from $50k per year online to over $350k per month in one year.

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Iz Moreira

Via LinkedIn

Kelsey Moreira

Via LinkedIn

DoughP

Via Instagram

Via Facebook

Via TikTok

Mentioned in this episode:

ShipScout

PayPal Store Cash

Sean Frank

The Ridge Wallet

Episode Transcript:

Brett:

Well, hello, and welcome to another edition of the eCommerce Evolution Podcast. I'm your host, Brett Curry, CEO of OMG Commerce. Today we get to hear a founder's story. We get to see behind the scenes of a really rapidly growing eCommerce brand, a brand that I'm really excited about that I'm a customer of. I can't wait to dive in and let you hear the origin story of this brand and also what they're doing now and how they're growing and excelling.

Brett:

I think there's going to be lots here for you to learn from. I think it'll be a lot of fun, as well. Today, I am delighted to welcome to the show the co-CEOs of a company called Doughp, and that's spelled like dough, like bread dough or cookie dough with a P on the end, so Doughp. Co-CEOs Iz and Kelsey, guys, how's it going? Thank you so much for taking the time.

Kelsey:

Yeah. We're good. Thanks for having us.

Iz:

Thanks for having us.

Brett:

Yeah. Just a quick and I want you to tell the full story. But Doughp is cookie dough that you order online and eat. I don't know if you're like me, cookie dough is just as good, probably better than the actual cookies. I was telling you guys I made a mistake. I word some Doughp, to be careful how you ... what audience can say that, too.

Brett:

But I ordered some Doughp from you guys from your website. Tried s'mores, chocolate chip cookie dough, it was your sampler pack was ..

Kelsey:

Yeah. Cookie Monsta, Fairy Dust.

Brett:

Yes. All of those, Fairy Dust, Cookie Monsta, the s'mores was good. I made the fatal error of letting my kids know, not in camera, if I told you Iz, but I've got eight kids.

Kelsey:

Wow.

Brett:

I made the mistake of letting my kids know about the Doughp and they totally dug in. It's fantastic. Kudos to you guys for that.

Iz:

Great to hear that.

Brett:

Yeah. Yeah. Yeah. Let's hear a bit of the origin story then we'll dig into lots of fun stuff related to the business. But how did Doughp come to be?

Kelsey:

That's awesome. I love origin story. I feel I'm an X-Men Origin story, Do you think we're going to whole ... I do have movie trailer that's like "And then," it should be awesome.

Brett:

When I tell my kids, I was talking to the founder and the co-CEOs of Doughp. They're going to be like, "What?" You feel like a superhero to them for sure.

Kelsey:

Oh, that's awesome. So cool. Yeah. Origin story for Doughp. I'm the founder of Doughp. We are co-CEOs running it today. But I was by my lonesome four years back. We just had our fourth birthday for Doughp. This crazy idea that people might like cookie dough as much as me. I had been working in tech for 10 years, had not any experience at all in the food industry aside from working at Nestle Toll House Cafe.

Kelsey:

Being a cookie cake decorator when I was 15, jumped into corporate America with my time at Intel and really just dove into that and had lost a lot of those outside passions, the stress and anxiety of corporate life. I leaned on alcohol and ended up developing a really unhealthy relationship with it over those years and lost sight of all those other things that I loved in life. I got sober in 2015, which was like the best decisions.

Brett:

Congrats.

Kelsey:

Thank you.

Brett:

Amazing.

Kelsey:

It is so cool. I really feel I got a second lease on life and got this opportunity to take the reins and see what do I really want to do. Is this what makes me the happiest? In the discovery outside of work, nights and weekends for my day job. What was I loving? It was really being in the kitchen. I was baking every day and bringing in stuff to the office and ..

Brett:

Baking was therapy for you, or just a hobby, passion type thing?

Kelsey:

Like meditative. Yes, still is. When I'm in the kitchen, time flies by. I feel like ...

Brett:

Beautiful.

Kelsey:

Yeah. If I have an afternoon ... we get some afternoon free or something, a weekend he'll play some guitar and I'll be in the kitchen baking something.

Brett:

That sounds like a really ... Now just as a teaser, if anybody's listening only and not watching. I don't know if it's because you guys are based in San Francisco and just all of a sudden get this vibe. But Iz, you have a short-haired John Stamos. Maybe it was the guitar. But you said guitar. I'm picturing you in a San Francisco kitchen. It's like Full House from my youth or something.

Kelsey:

I love it.

Iz:

I'll take it.

Kelsey:

Yes.

Iz:

I'll take it.

Kelsey:

We love it.

Iz:

However, we moved from SF. Now, we're based in Las Vegas.

Brett:

Oh, got it. Okay. It's still cool.

Kelsey:

I mean like a Vegas thing. He's like a Stamos impersonator on the script.

Brett:

It's the Stamos impersonator.

Kelsey:

Yeah.

Brett:

You can do it, man. You can totally do that on nights, on weekends.

Iz:

Cool. I appreciate it.

Kelsey:

Incredible. Yes. It was in SF when I started the company. These nights and weekends baking and loving it and bringing stuff into the office. I had been moved down to San Francisco for a new job inside Intel. I was like, "What am I going to do? I can't be a baker. There's world-renowned pastry chefs in San Francisco. Let's just do it for myself on the side still and for friends and things."

Kelsey:

But going to SF, I decided to try and be a vegan. But I was really terrible at it, because I love butter way too much. The recipes had butters in them.

Brett:

It was always butter. I wasn't so much meat. It was the butter that tripped you up?

Kelsey:

Oh, I just couldn't let it go. I was like, "I didn't mind having all the vegan needs, this and that." But man, when I was baking, butter is the good stuff. I was using butter but no eggs. Then these cookie recipes, I made for a really long time, were safe to eat raw. I was like, "Not only the one spoonful I would have always have over the years."

Kelsey:

Now I was like, "Oh, I'll just save half of it in a bowl for the week to eat some bites out of it and bake the other half of it." That just clicked. I was like, "This could be my thing. I could start a business. I could do this." All those people at work and things that have been saying, "You should sell this." Kind of thought, "Well, entrepreneurship, so that farfetched. I'm just going to climb this corporate ladder and that's what it is."

Kelsey:

But sobriety really gave me that energy and focus to say, "I could do this." I put myself towards it. For 2017, I took 100 pounds of cookie dough out to Dolores Park in San Francisco. We sold out in three hours and I was like, "All right."

Brett:

All right. This is a business. This is a real business.

Kelsey:

Yeah. How do we go from here? Yep.

Brett:

Now, tell this part in whatever order makes sense. But we'd love to hear how you guys met, because not only are you guys co-CEOs and you look great together. But you're married as well. Let's hear how you met. Then did you go eCommerce after you guys started working together? Kelsey, did you go eCommerce first?

Kelsey:

Yeah.

Iz:

Do you want to tell this yourself. It's way funnier when you tell it.

Kelsey:

Yes. We have like ... Now, we went from origin story, hardcore beginning, to romance novel of how we met. We're diverging a little bit.

Brett:

You guys have to read a book at some point ..

Kelsey:

eCommerce tips coming later, love now. Okay. We were in San Francisco. I had really focused on brick and mortar in the beginning. It was six months into the business that I got an opportunity to open a store on Pier 39, famous tourist pier in San Francisco. I've gone there as a kid. This idea that like, "Wow, I could have my own concept on this famous pier, I'm all in."

Kelsey:

I had done that, started to build up some staff. We had a co-working office. We were in a co-working office in downtown San Francisco. It was this guy. I was very busy running my company. I just had this running joke with my employees and staff and whatnot that there's this cute printer boy that sits near the printer.

Kelsey:

You're just going to jump, there's a printer boy here, because he sat near the printer in the office. He'd walked by and I pretend to faint or something if we're working in the common areas.

Iz:

Like, "You look just like John Stamos."

Kelsey:

I said that, right? Yes. I thought he was so cute. But just when you're ... This is what they always say to women in particular, because we're all excited about meeting the love of our life. It's like when you're not looking for them, you'll find them.

Brett:

Yeah. Yeah.

Kelsey:

That's absolutely what happened. I was just so ...

Brett:

When you're baking cookie dough and no one is watching, you will find the ... Actually, everybody was watching at that point.

Brett:

Full story. You're baking. You're running a company. You're managing employees. You get your dream location on Pier 39. Yeah. We got to get to eCommerce. I want to know who made the first move here? Who really ... Do you guys remember? I assume you do.

Kelsey:

Yeah. I mean, I think.

Iz:

I mean, yeah.

Kelsey:

It was him. He said ... We were eating lunch by chance, the same day in the co-working office, co-shared lunch space. He said, "Can I take you out to lunch tomorrow?" after we had chatted while we were eating. I was like, "Is this a business thing? Does he want like Doughp to cater for their company or something?"

Iz:

I wanted to keep the mystery going.

Kelsey:

Yeah.

Iz:

I'm not going to be super clear to hear about my intentions.

Kelsey:

Yeah.

Iz:

Let's go and see how it goes.

Kelsey:

Yeah.

Iz:

Sure enough, it was great. But a quick ..

Brett:

You're trying to get the easy "Yes." Just ask a simple question, just lunch. That'd be good. Lunch. Then we ...

Iz:

Listen, you don't know until you ask. That's why a customer research, market research is so important. You don't want to be asked, don't ask.

Brett:

The job is ...

Kelsey:

Yeah.

Brett:

Kudos to you.

Iz:

Yeah. But it was really interesting, because I was born and raised in Brazil. I moved to United States in 2017. After having an incredible career in civil engineering, I went to school for civil engineering and became a project manager for a construction firm. But I was just tired of Brazil. I wanted to raise a family somewhere else. I decided, "Okay. I'm going to study at Berkeley."

Iz:

I came here to study at Berkeley for a year. Got a job offer in SF and that's where we met. It was a really interesting, serendipitous moment for both of us.

Kelsey:

Yeah. Both of our lives took us to SF right at that time.

Brett:

Very cool. Iz, you clearly have this organizational, operational skill set. Kelsey, you're very creative and very passionate and you make all this stuff. Seems like a really beautiful match there. Talk about what's the day-to-day of Doughp look like now and how do you guys work together?

Kelsey:

Yeah. I mean, I think that path you mentioned, going from brick and mortar to eCommerce was absolutely prompted by Iz joining of the company, join into the company. It was these skill sets that we saw on each other, naturally, as we were in a relationship and then married. The conversations were really awesome to say anything I had a question on that was ops or finance related, that was totally his wheelhouse to jump in and help me.

Kelsey:

Those are the spots I feel weaker on. It became really natural in late 2019 to say, "What do you think about just coming on over and just joining this Doughp thing and seeing what we could do together, and put our eggs in this basket." But we really thought we could create something great. That organization lines, he was able to say, "Okay. We're doing catering and wholesale and the storefronts and a little eCommerce." What do you say, 2020? It's going to be the ...

Iz:

"2020 is the year of focus," that's what I said in November of 2019.

Brett:

Oh, wow. You didn't realize how wide you would be?

Iz:

Yeah. One of the things I always do when I join organization is to really understand where the resources are allocated. As she was saying, she had a lot of resources allocated everywhere, which means you're spread too thin. You basically cannot serve everybody very well. What we just did was a brainstorming analysis, considering ROI, barriers to entry, and other factors in each of the channels.

Iz:

We decided, "Okay. 2020 is going to be the year of focus on having the brick and mortar locations operating. But we're focusing on eCommerce. eCommerce seems to have the greatest potential for growth, and the least barriers to entry for us right now." That's what we did. November of '19 was the decision, and March of 2020 was when the pandemic really hit and we had no longer brick and mortar locations.

Iz:

Thankfully, we were super ready to go. We grew from November 2019 to March of 2020 a hundred X in sales on eCommerce.

Brett:

100X, that's insane. 100X in sales online or 100X ...

Iz:

In eCommerce, online. That's it.

Kelsey:

Yeah. Online only. For reference in 2019, all together, we did $50,000 online of $1.2 million for the company. As you can see eCommerce is like ...

Brett:

Yeah ..of the company. Yep.

Kelsey:

Exactly. Really like an afterthought. Then in 2020, 2.5 million of 2.7 million was eCommerce. Two and a half million dollars from 50 grand. It was a wild roller coaster to even be able to sustain the fulfillment side of that. I'm sure eCommerce folks listening know the challenges that come from doing 30 boxes a month to 3,000 boxes a week in the span of four months.

Brett:

Yeah. Your product is not super simple to ship. It does have a long shelf-life. But it's still food. You have to protect it slightly differently. It's shipped with ice. Dry ice was in the container if I remember correctly.

Kelsey:

Ice packs. Yeah.

Brett:

Ice packs. Yeah. Yeah. Can you talk a little bit about that? What was that process of ramping up a hundred X your orders online? Was that just a lot of sleepless nights for Iz and a lot of baking?

Iz:

Literarily. A lot of sleepless nights because at the time, we were using graveyard shifts with our staff to mix the dough and pack the orders of the following morning.

Kelsey:

From our store staff, in the physical brick and mortar ...

Brett:

Yeah. Yeah.

Kelsey:

... overnight.

Brett:

Yeah.

Iz:

It was literally a lot of sleepless nights. I cannot say it was smooth. It was not smooth. It was a lot of learning. But I think one of the greatest trades that we have as a company is to be really nimble and be really good at pivoting and learning and figuring it out as we go. From November until March, we were ready to ship all those 3,000 orders a week. It wasn't easy. But we were ready to ...

Brett:

Yeah. Yeah. What were some of the successful pivots you guys had to make? Obviously, the pivot from being mostly dependent on brick and mortar stores, to being fully dependent on eCommerce was a major pivot that you were planning on doing anyway. But the pandemic certainly forced that to happen at a much more rapid pace. But what other pivots did you guys make that ... Looking back, you said, "Wow. This is really cool that we did that."

Kelsey:

I mean, all the elements that came to fulfilling that, or following through on the decisions from it. While we didn't expect to shut down the brick and mortar side, we thought we'd get ... eCommerce would be a nice sizable channel. Because of the pandemic and the slow traffic after that, we made the decision to close down our final storefront in October of 2020.

Kelsey:

It's just those real cut and dry, look at the numbers. Put the emotions aside and say, "Does this make sense to keep doing?" Yes. I put my heart and soul in the storefront. I mean, it was so beautiful. We built it from the ground up. Loved it. But it's down 82% year-over-year. It was just not going to make sense for us to stay there in the long run.

Kelsey:

We needed to not let that hurt what was working. Yeah. I think other than that, it's been the partners that helped to come through, learning who the right partners would be in fulfillment, and who the right partners would be in marketing, advertising. It's such a hard game to get. We're still a marketing department of one. I'm trying to hire a director of marketing right now. We've really relied on agency support to make everything come true.

Brett:

That's awesome. Yeah. Finding the right partners is key. I want to dig into one thought there that you mentioned. You alluded this in the beginning. Hey, that Pier 39 location, that was your dream location. It was iconic. It's where you went as a kid or whatever. I think we have periods in time like that, as entrepreneurs, not always pandemic related, but where we have to make a really logical choice to move away from something that we maybe have a lot of nostalgia or a lot of emotion wrapped up in that.

Brett:

What was that decision like? Did you guys labor over that? Or was that just a clear cut easy decision?

Kelsey:

I think it was someone who's more removed from the emotion of it. It was quicker for him to say, "We should definitely close the store if we can." I'm like, "But maybe we could keep it. What about if we were able to convert them into eCommerce customers, and use it as a marketing engine." There is all this other dreamy lens we could have put on it. But it does take having that checks and balances.

Kelsey:

I think of if I was still a solo founder, no co-CEO by my side, it would have been really difficult to make that call on my own. I do, I think, and recommend to anybody else have counterpart that can really tell it to you straight and bring the numbers to the table where it's hard to say otherwise. Yeah.

Brett:

That's awesome. I think one of the ways we learn best is seeing what other people got right, and also learning from other people's mistakes. Let's start with what do you guys get right from the beginning? What do you feel like you, just right out of the gate, you nailed and that's helped propel you and keep the success going?

Iz:

I mean, the product. We can start with the product.

Kelsey:

Yeah. The products, yeah, haven't changed the recipe in four years. Yeah. That's ...

Brett:

.. the recipe in four years. That's awesome. Now, are you adding new flavors or did you launch with all those amazing flavors?

Kelsey:

Adding new flavors, we've had the core four, like the one you've got in sampler pack. Those four have been around pretty much since day one. The base of the recipe and how we make our dough from the start has not changed the whole time. We do always come out with new seasonal stuff, like red velvet cupcake for Valentine's Day.

Kelsey:

We're always releasing new unique flavors. But sometimes we can't pull that one because customers are so upset when we .. They're like, "Bring it back." We did a nostalgic flavor in January from the '90s. Did like a Dunkaroos inspired cookie dough and ...

Brett:

Okay. Okay.

Kelsey:

When it sells out, tear the walls down, people are so upset. When are they coming back?

Brett:

Don't take away my Dunkaroos. How dare you.

Kelsey:

Yeah. They're very upset. Yeah. That's been good. I think the other strong thing that ties in with the products has been the brand, really being so firm from very, very early days on why we exist, what we sound like, what we look like. We want to talk to you like a friend. It's all about authenticity, and our mission around mental health and addiction recovery. It's a commodity. Cookie dough something you could make at your house.

Kelsey:

But we're really trying to wrap a bigger purpose around it and each purchase goes to support these issues and there's just so much more to it. I think that's really resonated with customers from the start.

Iz:

Yeah.

Brett:

Your brand is amazing. I mean, first of all, I love the name Doughp. It's really cool and just selling your homepage, edible, bakeable, and ridiculously tasty. It's just got this fun vibe. Yeah. You just nailed the branding. As you read stuff on the site and as you even ... I remember the card that came in the sampler pack was really relatable and fun and talked about the fact, how long would last, and how you can enjoy.

Brett:

It was a really fun experience. Yeah. I would totally great. Product, brand nailed those. Any times you feel ... What's that?

Iz:

I mean, I was actually going to say another thing that was really good from the start. My background as a civil engineer, I've always focused on numbers. I've always done financial analysis and production and operations analysis. Unit economics was something in my DNA. When we first started, instead of trying to ship one container of cookie dough, we've always shipped kits of container.

Iz:

There's always this analysis of like, "What does make sense to ship considering the cost of the shipping label and whatnot?" That strategy was right from the start. I think most eCommerce brands do that strategy. They can't just ship by unit product. They have to make sense on the unit economics.

Brett:

Totally makes sense. You guys have always done packs. You've always done four packs ...

Kelsey:

Yeah. Four packs. It used to be like six packs back in the day. We had these tiny jars before we moved to the situation we're in now.

Iz:

Yeah.

Kelsey:

But yeah, always like a kit. It helps on most of the part of a new person coming in. It helps to decided for them. Here's the best ones to try and that's the bestseller pack. But then the build your own pack is super popular. That's the most common second step in repurchasing. They're coming back to be able to customize theirs. Say, "Okay. From that, I love these flavors. Here's the ones I want to get, and mixing and matching pints in a two, three or four-pack."

Brett:

The sampler pack did make it very easy, because I didn't have to think about, "Okay. All these flavors sound amazing. It'd be great to try them."

Kelsey:

Yeah.

Brett:

Have you had many people say, "Hey, I just want to order one?" Have you had pushback on the four packs? Or has it always been fairly smooth?

Kelsey:

Yeah. We get that pretty frequently. In support emails, tickets or social media, on comments on our ads saying, "Oh, I just want to buy one," or the comparison where they're like, "Oh, at the grocery store, I can get Nestle's for $3 or whatever." It's like, "Yep."

Brett:

You sure can.

Kelsey:

You sure can.

Brett:

But is there homemade cookie dough? No, it's not. Yeah.

Kelsey:

Yeah. It does taste really not that great. They tried to make an edible one, about two years after I had launched. It's so different than their core product. It seems they really couldn't get this stuff to just turn the taste of the regular Nestle into a safe to eat ones. It's very, very different. Yeah. It is at a very low price. Then there are massive, massive conglomerate out there.

Kelsey:

They're always going to be able to beat us on price. But like I said, that's why it's so important to have such a strong focus with the brand and what our business is enabling to happen in the community around these issues. That's a lot more than you could say for buying a pint of Nestle. I think we looked at and started offering the two pint packs.

Kelsey:

Shipping just two pints, which is more approachable than requiring that you get four if you're going to do it.

Brett:

Right. Right.

Kelsey:

Yeah. We've made some steps down. It seems environmentally, not smart to send one. Even we're going to have insulation price for one. Just explaining that to the consumer that's challenging for these times. Yeah.

Brett:

It is challenging, because there's always people that don't want to think about the big picture and only want just to lower their cost, which is understandable. But I think from your perspective, kudos to you guys for saying, "Hey, this is what makes the most sense. Economically speaking, this is how we need to do it. We're going to present it in a way that's easy and fun."

Brett:

Then get as many people as we can to take advantage of this, knowing that there'll be some people that don't understand, but that's okay. We'll work through that. Awesome. Then what about mistakes you've made, because I know it's not always fun to talk about mistakes, but that's often how we learn the best and learning from other people's hiccups can really be useful. Learning moments.

Kelsey:

Yeah. You're going to talk about the last spring, last summer?

Iz:

Yeah. As we were mentioning, we were growing super fast, a hundred X in three, four months. We were desperately looking for a way to reduce our shipping costs. Because when you first start shipping ... I'm sure most of the listeners are going to agree with me here. When you first start shipping, you don't have enough volume to come to a carrier and say, "Hey, I want a discount."

Iz:

There's not enough track record to come and say that. You have to pay higher prices. You have to make sense on the economics, like I said. The way that we envision that happening was, "Okay. Let's spread out our distribution. Let's have three major distribution centers across the country, because our customer base is so spread out across the country." So we did. But there's a lot of consequences to that.

Iz:

For starters, you have to spread out your inventory. There's a lot more cash tied up to inventory. Also you have to trust who you're moving with. We just learned the hard way that you have to have one person managing everything and that person has to be in touch with all the boxes to make sure that everything goes according to plan. It's just so easy. There's just so many steps that can be lost along the way.

Iz:

That just loses the entire customer experience along the way. We just don't deliver what we promised here. That learning was, "Okay. We need to centralize everything, make sure that we know this person. We're close to this fulfillment center. We know exactly what's being done." It was incredible. In September last year, we started with a fulfillment center here in Las Vegas, which is amazing.

Iz:

Because if anything happens, I can just literally drive there and see what's going on and fix problems on the ground.

Brett:

That's awesome. Yeah. You identify an issue or an opportunity to improve customer experience. We need to distribute our shipping. But that creates some challenges as well. But it sounds like you ...

Kelsey:

Yeah. Too big, too fast.

Iz:

Yeah.

Kelsey:

We spread out too wide, where it was a little bit out of reach without knowing those warehouses closely enough. Yeah.

Iz:

Yeah. In September, we already had the track record to come to shipping carriers and say, "Hey, here's what we have now. Here's how much we're shipping." Then we were able to centralize everything from here. I think it was a really interesting learning experience that I would like to share. Please don't spread out your inventory too thin too early.

Brett:

Yeah.

Kelsey:

Yeah. Before you need to.

Brett:

Actually, with your inventory, because it's perishable. I assume that could maybe led to some issues as well.

Kelsey:

When we were getting the inventory back from this widespread ordeal, we literally had a dry truck and a frozen truck. One was supposed to get the boxes and insulation, everything that was supposed to get the cookie dough loaded backwards at the warehouse. They loaded it backwards and shipped it out from the East Coast with our cookie dough in the middle of the summer in back of a dry truck.

Brett:

Nice cool boxes and not cold cookie dough ...

Kelsey:

They're like these boxes showing up cold, doesn't seem a good sign. Yeah. It was wild time. We went through some real remorse. One of our first expensive mistakes. I made a lot of small things here and there over the years where it was like, "Oh, shoot. I wish I had done a different cart for my catering thing or something." It's just so small. These really gotten to some serious times where you're talking hundreds of thousands of dollars that can be in jeopardy.

Brett:

Yeah. Which is super painful, and then can be sometimes mentally, emotionally crippling, but sounds like you guys pivoted nicely from that. Now you've got your warehouses in order, and you've got your discounted shipping. You moved ahead. Obviously, you want to avoid stuff like that if you can, but we can never avoid all of it. She's got to learn from it and then move forward. Any other takeaways from that?

Kelsey:

No. Yeah. I think that's the biggest takeaway from that experience.

Iz:

Yeah. I mean, it's not from this experience. But another thing that I would like to share that helped in this experience and other experiences is contracts. Contracts are just the life of the business. Most entrepreneurs that I know don't like reading contracts. They think it's long, there's a lot of legal stuff. Yes. That's true. But at the same time, that's what's going to regulate the relationship you have with your vendors and clients.

Iz:

If you don't pay attention to it, and don't negotiate the material points for you, you're going to be in trouble in case anything goes wrong. It may.

Kelsey:

Yeah. It's likely to. I think I had such glossy eyes at the world. I really thought like, "Oh, no. These people seem great," or "I got referred to work with them." I really, before I joined, I'm ashamed to say this, because no one else would do this. But I didn't read a single contract that I signed probably in those first three years of the business, before he jumped in. Even the Pier 39 lease, I really don't even think I had a lawyer look over that lease.

Kelsey:

I was just like, "If I need this space, this must be what I need to sign." I signed on to a personal guarantee, and all these things that now with his eyes looking at a contract would just never go. That ties in with a nugget of advice I would have, too, is like don't wait too long to bring someone to the table at the same stakes as you. It's really easy for founders to be hoarding, and just wanting the company for themselves and not bring on a co-founder.

Kelsey:

I created it, so I can keep doing it alone. But just through the years, we've couldn't find someone for what we were able to pay that had the experience and dedication that I really needed. That caused some issues on certain areas that he's really strong in now.

Brett:

Yeah. I know that bringing on the right strategic partner can make a huge difference. I'm really glad you brought up contracts, Iz. I'm really glad you're transparent there, Kelsey, because I tend to ... Now I understand, we have 50 people on our team, and then lots of things going on. We pay close attention to everything. But I tend to be more like you Kelsey, where it's like, "Nah, man. We're building stuff. We're growing. We're making deals, and it's all going to be fine in the end."

Brett:

You can do some really stupid things if you focus on that exclusively. You got to understand your contracts, because almost all contracts are negotiable. Even that Pier 39 contract, you could have negotiated that.

Kelsey:

100%.

Brett:

But it worked out okay.

Kelsey:

Yeah. Yeah.

Brett:

That's awesome. Cool. Any other mistakes? I know it's painful to talk mistakes. But in any other learning points that you want to highlight? That was a great one, by the way.

Kelsey:

I think some of the agency decisions, when I think about advice I pass along for that. It's like, "Go with your gut." We've had some times where we went with someone, and I was like, "Huh, I'm morally opposed to this person as a human, but they seem to have good performance. Let's do it." Then it's like, "That was an awful idea." I think, we've just been proven when you feel like, "Wow, this seems like a really good person, I would want to, I mean, virtually, hang out with every day."

Kelsey:

They become your best friend. You should really feel they're good people that you would want to spend time on the phone with. Just trusting that gut and being like, "Hmm. If I don't even like being on these sales calls, I really shouldn't sign up with these people, no matter how good they say the performances is." There's just something that will always be off in the relationship. That's another ...

Brett:

Yeah. I totally agree. As an agency, co-founder and CEO, we feel the same way on this. There are these times where we talk to a client and we think, and I love that brand, and I love the growth potential. But something about them, something about the person we're going to be working with just doesn't fit right. That usually then ends up being a not great relationship. Then the same can be said on the client side.

Brett:

You think, okay, the track record, performance is good. I want to grow my business. I want to do the logical thing. But yeah, if your gut is telling you, no, then you got to look at something else. Because if somebody else has got the track record and the personality, too. Yeah.

Kelsey:

Yeah, totally. Yeah. Aren't advice to follow in the moment. When you're in a pinch, you make bad decisions.

Brett:

Yeah. Yeah.

Kelsey:

Needed to hire an agency or a person or whatever. We've always not made as good of a decision is to try and give yourself the lead time to say, "It's okay, if this one doesn't work out. Let's keep interviewing. Let's keep searching." I've been interviewing for as director of marketing position for how long?

Iz:

Two months? Yeah.

Kelsey:

Yeah. Just over two months, I think.

Brett:

Yeah. Good. You're being patient. We're actually looking to hire a marketing coordinator right now. If anybody is listening, hit me up. But yeah, or hit up Doughp as a marketing director, hit up Kelsey and Iz there. But this is totally accurate. Well, we look for hiring an account manager or Google specialist or Amazon specialist or whatever. We will try to make that list thing earlier than we need to.

Brett:

I mean, you can't have discipline and when you're under the gun, still really wait to say yes to someone. It's a lot easier if you just don't have that pressure when you have the time. One of the things I heard this quote. I think it was on the Tim Ferriss podcast, I can't remember who said it. But they said "If it's not a hell yes, it's a no."

Brett:

They were talking about anything in your life. We started implementing that on the hiring side. If it's not a super enthusiastic yes, then it needs to be a no.

Kelsey:

Yeah. It's awesome. It applies to the fundraising world as well. I think about it with trying to find the right partner. If you're waiting to raise until you, "Oh, my gosh. Need the capital." You're freaking out if you don't get this. You're going to seem desperate. You probably won't even be able to get an offer, or you might close with a partner that wouldn't be the best partner for you.

Kelsey:

The fundraiser side, whether it's an Angel or a VC, or who is it, they're going to be a partner in your business. It's more than an agency. They're going to have a piece of your whole ...

Brett:

They get married right there. I mean, it's the business equivalent of getting married, for sure. Yeah.

Kelsey:

Totally is. When you're in a pinch, you make bad decisions. That's across the board.

Brett:

Yeah. Yeah. Awesome. Really good advice. Well, let's get into a couple tactical things, just for fun. I do want to underscore how much I love your website. I know I said that already. But the branding is on point. It's easy to shop. It's easy to browse, just really, really like it. I would like to dig into maybe some traffic, things that are working right now for you. Then some conversion tips, potentially.

Brett:

Let's start with the website. What are some of the things you guys have done over the last year? I know you've been growing hair-on-fire type speeds. But what have you done to increase conversions, to improve checkout, anything along those lines?

Kelsey:

Yeah. I mean, overall experience stuff on the site. I would say maybe six months ago, we started to think of a couple other areas to really bring in the mission into it. When you click Add to Cart on the bestseller pack, it literally shoots confetti out from Add to Cart button and says like, "Your purchase before it's addiction recovery." These little reminders that ... That's we're all in eCommerce trying to make sure they get to checkout and that they complete the checkout.

Kelsey:

That Add to Cart moment, adding a little bit of excitement and a little reminder of what this purchase will help do. We have that at the bottom of the mini-cart as well, some support that they'll have. Having a mini-cart was a decision, too, to try and reduce friction from being on the site shopping to get into checkout.

Kelsey:

In the mini-cart, we've got some upsells. This was a custom built solution by our dev. Not for anything that I can recommend there. But just different products get served a different upsell opportunity. Right now we are with shipping threshold to get free shipping on orders over 65. We tried to line up all of the upsells to get them there. The hope is that for most of the scenarios, adding that next upsell there will get them to free shipping.

Kelsey:

They're more incentivized to add a two-pack upgrade, get an extra two cups with your order, or double up and save, and that sort of thing. Getting a discount on something if you get two of them. Little things like that in the cart.

Brett:

Yeah. I really like that. It looks really cool. I'm looking it right now. I added the bestseller four-pack to my cart. Just below it, it says "Double up and save," and you get the nice, we'll say 5% and the original price marked out, the new price there. It's handy. When you added that, what lift did you see for your AOVs? I'm putting you on the spot. If it's rough ...

Kelsey:

No. It's totally fine. I mean, I definitely from when we first launched this new site with this mini-cart in general. We had a two-pack upgrade with like two pints serving offered on any order, anything that had been put in the cart that was already cookie dough so that we weren't adding the complication of insulation and ice packs for someone who bought a sticker, or like ...

Brett:

Yeah. Yeah. Yeah. Yeah.

Kelsey:

... some merge. For that and that was 25% of orders we're doing that two-pack upgrade. It's pretty significant.

Brett:

Nice. That is really significant. That's awesome.

Kelsey:

Yeah. That was a $12, I believe at the time?

Iz:

Yeah.

Kelsey:

Yeah. I think it was like 12 or 15 to get the two-pack. That was great extra bump. We had been really around like a $43 AOV, pre-new website. Then once the new site launched with that, we were up at 59.60. Really good movement there. We've juggled back and forth with the shipping. There's this option to bake some of it into the price and have free shipping or what we need to do on the entry skew to make that more affordable for an entry purchase.

Kelsey:

There's an app. This is a fun app tip that we're going to start using called ShipScout, a way to A/B test.

Brett:

ShipScout. Nice.

Kelsey:

Yeah. A/B testing prices.

Brett:

Ooh, I like that a lot. Yeah.

Kelsey:

Right. It's these little incremental things. Because if 7.95 versus 9.95 has 20% higher conversion rate. Great. It's totally worth it. We just have to figure out what that trade off is and how significant it would be. But that's a great app. Some complications you'll need a devs help for if you have other areas around your site that are mentioning free shipping over X amount or what the shipping price is. But all doable with some help of the amazing wizard developer.

Brett:

Yeah. Yeah. It sounds like you guys have been playing with not just the number of cups in a shipment but also the size of the cups. I see 5 ounce cups, 16 ounce pints. Any learnings there? Did you launch which is one size originally, or any learnings you've gained from that?

Iz:

We've always had two sizes. Yeah. When we first started this, like I said in November of 2019, we still use plastic jars. She had already started to do these plastic jars at the store. What I did was, okay, we already have these. Our staff has already trained to do this size. Let's try and do these two sizes. She already had the 16 ounce and was it four point ...

Kelsey:

It was 4 and 12. Yeah.

Iz:

Oh, it was 12?

Kelsey:

The little squared glass looking jars. Yeah. Yeah.

Iz:

Well, there you go, 4 and 12.

Kelsey:

Plastic, but yeah.

Iz:

It worked quite well. Everybody already knew. Everybody that knew the brand knew the sizes that we use to serve in. It worked. We just moved to a 5 and 16 ounce because it is more widespread use off the 16 ounce cup and a 5 ounce cup versus the 4 and 12. It's easier to get the packaging and easier to source. Also in the minds of the consumer, it is easier to assimilate the 16 ounce pint versus a 12 ounce. What is this? Is it big? Is it small? How many servings?

Brett:

Yep. Yep.

Kelsey:

Sixteen, people are like, "Oh, like an ice cream pint?" They get it.

Brett:

Exactly. Yeah. The pint really clears it up, for sure. Yeah. Curious. I noticed you had Shop Pay on the site and I buy from a number of Shopify stores. Of course, I enjoy using Shop Pay as a consumer. When you guys added that when that came out. Did you guys see a bump at all and do very many people utilize that?

Kelsey:

Yes. A lot of people utilize it. I think we're 70% Shop Pay checkouts, and then the probably 20% is PayPal, maybe 25%. Maybe a little bit more on PayPal. Yeah. PayPal does the Store Cash Campaign. I don't know if you've ever heard of any vendors. But this, they have some comment on our site, like a snippet on there that identifies if someone visiting the site is a PayPal customer or not.

Kelsey:

They'll get an email saying like, "Here's $5 to use, $5 Store Cash to use it to have cookie dough if you want to go back and make your purchase."

Brett:

Nice.

Kelsey:

That's fun. Pretty amazing.

Brett:

What does that call?

Kelsey:

Store Cash Campaign. Yeah. PayPal's Store Cash. I remember just by chance, seeing it as an option like, "Oh, do you want to turn this on?" I'm like, "Sure, whatever, five bucks. Go for it, seems cool." Then when I log in, it's like, 1,128% row as. Like, "What?" It's pretty cool. Yeah.

Brett:

Yeah. When you get 20% of your shoppers are using PayPal anyway. That only works ... If someone visits the site, it's detected they use PayPal, they leave that buying. It's almost like a remarketing campaign, then they're getting the $5, or it's regardless what they do on the site?

Kelsey:

It also does it if they have purchased and it's incentivizing them to come back. It's like, "Here's $5 to come back to Doughp." Yeah.

Brett:

Beautiful. Which is great for you guys, because consumable, sending a coupon after the fact is great, too.

Kelsey:

Yeah. We have to think about all the different ways to incentivize that repurchase, different ways to use the product. We're working on a digital cookbook to send out. Being able to offer this probably as a post purchase upsell, but a digital cookbook, here's all these recipes to go through ..

Brett:

Increase consumption. Absolutely. Yeah. Gets you even more. You start ordering more. Yeah. I want to get into some traffic, too, where we just have a few minutes left. But what about other loyalty things you're doing? Are you looking at subscriptions? Are you doing anything else special to get that repeat purchase? What are you doing there?

Kelsey:

Yeah. We have a rewards program, our Spoonlicker's Club.

Brett:

Spoonlicker's Club. Yeah. I love that.

Kelsey:

Yeah. In February, it's only as good as it's marketed though. It is hidden on our site right now, somewhat of a soft launch, if you will, while we got all the rest of the email flows and everything in place for that. A birthday bonus point email and things that will come out in that regard. There's a little bit more tight knit integration that we need to do to really make it come to life on the site.

Kelsey:

At every point, you're excited about coming back and knowing how many points you're going to get for purchase. Subscriptions are interesting. It's been this debate of how much cookie dough is feasible to get delivered to your house every month. What we did release, it's literally down in the footer. It says Curious with the question mark. It's a secret cookie dough club.

Kelsey:

We've been doing this to our own audience to share out that they can join this cookie dough club. It's going to be a post-purchase email as well for those after their first purchase to know they can get this. It's 29 instead of 39 for 2 pints. It's free shipping. It's every month getting to mystery pints. It's a surprise box. So far, really great reviews.

Kelsey:

We have only one person gave a four star, the rest of them five stars, which is super awesome. They're like, "I love the mystery of it." Someone literally said, "I've been wanting to order Doughp for six months, but just could never decide which flavors to get. This mystery box was perfect for me." I'm like, "Yes."

Brett:

Yeah. That leads to consumption and maybe you find, "Hey, it's this s'mores that I love the best. I'll just keep order more of that, or four-pack of that." It's really great.

Kelsey:

Yeah.

Brett:

You'll start promoting that thing in your post purchase email series, or you considering the idea of putting that in the cart as an upsell or mentioning it elsewhere, or you still working through that?

Kelsey:

I think it'll be after your first purchase. We like this idea of, "Okay. They've gotten to try it. Now, here it is a little bit broader." Then it's also we're open about it on our social media. If you're starting to feel, you'll see it. Then if you're on our email list at all, you'll get occasional updates with that, still available.

Brett:

Awesome.

Kelsey:

We did a fun, very mysterious email blast for that. It was 20% of people who opened the email clicked through to the link. We put just full on Curious and all this mystery and stuff. Take a look. You had to like click into that and understand what it was. It was pretty fun. We doubled our ...

Brett:

... people up to I got to find out and ...

Kelsey:

Yeah.

Kelsey:

Doubled our subscriber base that single day. It was pretty cool.

Brett:

Wow. Let's transition and talk traffic just really quickly. What are some of the traffic wins you've had over the last year or so? What's working and what do you kind of excited about for the future?

Kelsey:

Physical traffic, we're stoked to be in Vegas because it's much lighter than traffic in San Francisco. We have leaned on ads to really drive traffic to our site, historically, since we started ... It's late 2019, it's historic now. But the real game changers have been organic stuff that's happened. Jason Derulo posted a TikTok with us.

Kelsey:

For seven days in a row, we had 25,000 in sales. It was just really got this crazy push. We were seeing it was all from search people leaving TikTok, Googling Doughp, finding us. It's really neat to see when you're feeding this funnel, how effective everything else works. It does take that push on organic stuff that takes place like that, which is awesome. I don't know how you found Doughp. But that's super cool.

Kelsey:

Chrissy Teigen just posted with Doughp yesterday, two days ago? Yeah. I think it was two. Those weeks have been a blur, on Tuesday. It's super cool to see what people are willing to do when they just see someone they love with it, they go out and search for it and do it. I mean, we had way better success with any of the organic stuff that's happened than honestly most of the paid influencer work we've done.

Kelsey:

We're pushing into a bit more with press this year. We just hired a PR agency. I think that's the best thing for us. The driving traffic to the site is getting really interesting things for people to talk about, where it's exciting and unique and gets more eyeballs on our site. Because then Google and Facebook, they can all work their magic, granted iOS 14 is trying to ruin our lives. But ...

Brett:

It is. It is.

Kelsey:

I said on LinkedIn the other day, I'm like, "Does anyone else feel like iOS 14 is our Y2K for eCommerce managers?"

Brett:

Kind of feeling like that. I mean, things are still going well here. Obviously, we're just a few ... At the time of recording, just a few days into the iOS 14.5 release. But things are going to probably get weird for a little while. We'll see what happens there. But yeah, a couple things there. I think your brand is perfect for influencer marketing. We don't do influencer marketing. It's not my area of expertise.

Brett:

But I've interviewed a few people on the podcast that are great at it. One is Sean Frank from Ridge Wallets. He's got an amazing influencer approach that he teaches. But who doesn't love cookie dough? Also it's so fun to talk about cookie dough. I think influencers could be lining up. Is that something you're planning on, is pursuing some influencers potentially?

Kelsey:

Yeah. We are working in that realm. I think one tip I have for anybody trying to do this, find people that are really excited about your brand. I was just talking to a new another eCommerce founder who's literally just goes through the Explorer on Instagram. Someone showing up in reels and stuff, they always have pretty good engagement. Search for your topic related to your store. See some of them.

Kelsey:

He just DMs each of them paid promo, paid promo, paid promo. Some of them, though it's a heavy lift to do this, many of them was pretty good engagement or like, "Oh, how's 10 bucks." He literally is like, "I can't close for $10 or free product alone." They're just willing to talk about it and that you get all ...

Brett:

Just spend me some cookie dough and 10 bucks ..

Kelsey:

Yeah. Way higher ROI than like, "Oh, $15,000 for this feed post." We just sit there praying that enough people go and click the link in their bio. I think there's a scrappier way to do this. I'm also not convinced that landing pages are the end-all, be-all for influencer in particular. I think consumers are getting pretty savvy that you've been sent to this trickery page that you can't click out of.

Kelsey:

It's like, "Here's the code, 50% off, go to doughp.com." This next round of influencers, we're going to try a little bit looser like that, instead of everybody going to a landing page, because we're just not seeing the results we want. But if you've got the time or marketing person on your team that could do the paid promo, quick DMs, and see who's down to talk about your brand. That's awesome.

Kelsey:

Because the people that I've sent free product to and they're willing to post by me, Addison Ray, we got her address to send her some free product by chance. She posts, I've got 4,000 followers in a day ...

Brett:

It's amazing. It's amazing.

Kelsey:

That was great. There is just some ... You got to stay scrappy. Even as you get big, stay scrappy.

Brett:

I love that. Yeah. Even when you're generating some nice profits and growth is there and you have paid channels that are working. Did you ever put anything on autopilot? But if you got your agency running, you don't have to think about it as much. But you should never stop with the scrappy, creative hustle type stuff because it adds a nice extra percentage to the business that compounds over time, that really can be a massive difference maker immediately, but also in years to come.

Brett:

Curious. On the operation side, what's ahead for you guys? Any tips or suggestions or ideas there?

Iz:

Well, great question. Now is actually the time for us to go into a bicoastal distribution model. We got the volume and the demand is there. It now makes sense. We're also in a better cash position to tie up more inventory, to have more cash on inventory. This is what's ahead now. We are actually on the hunt for a co-manufacturing facility on the East Coast now.

Brett:

Nice.

Iz:

Anyone's listening, interested.

Brett:

Co-manufacturing. Yeah. If you're listening, if you know people, Iz and Kelsey, or hit me up I'll connect to you and such we get stuff. Well, guys, this has been a ton of fun. I love hearing the story. I could keep talking to you guys all afternoon. This was a lot of fun. But I'm sure that we've made people's mouth water a little bit. Not just for good eCommerce growth, but for some cookie dough, for some Doughp.

Brett:

If people are listening or watching and they say, "Okay. I got to give this a shot." Where can they go to get themselves some Doughp.

Kelsey:

Yeah, doughp.com. Thank you for spelling it out in the beginning, because people do get confused listening to this. It's D-O-U-G-H-P. It's dough with a P on the dot com. We're @Doughp on Instagram and Facebook. We're on eatdoughp on TikTok, which has been super fun.

Brett:

Oh, man. I would love to hear that some other point, TikTok. Just really quick, 30 seconds. How was TikTok going for you?

Kelsey:

TikTok is incredible if you have something other than just pushing your product to talk about. For us, tons of the mental health stuff, there's sober talk, there's a whole sober community on TikTok. Really leaning into that, I mean, the comical funny stuff has done great, behind the scenes has done incredible. In our fulfillment center will love that.

Brett:

I'm not a huge TikToker, but my oldest son is for sure. There has to be. You guys have to do with TikTok, Iz with you playing the guitar. Kelsey, you baking in the kitchen. There's got to be some concept there that would really work

Kelsey:

Yes.

Iz:

I like that.

Kelsey:

Yeah. It's really a storytelling place. The algorithm rewards you for telling a story and having something interesting that people want to see. Yeah. The ones of ... My story, have done some green screen in front of the Shark Tank clip and stuff.

Brett:

Nice. Yeah.

Kelsey:

People like to know there's someone behind the business. Put your face out there. Get funny. Do weird shit. See how it goes.

Brett:

Exactly. I love it. I love it. Guys, this has been an absolute pleasure and a blast. Thanks for taking the time. Then thanks for being so open about Doughp.

Kelsey:

Yeah. Great to meet you. Thank you.

Iz:

Thanks for having us, guys.

Brett:

Absolutely. As always, thank you for tuning in. We'd love to hear from you. Would you like to hear more of on the show, and if you haven't already, we would love that review on iTunes that helps other people discover the show. With that, until next time, thank you for listening.

‍

Amazon has always been a jungle for sellers.  Battling sabotage from unscrupulous competitors, protecting yourself from listing takedowns, and avoiding account suspensions are all enough to keep you awake at night.  So how do you protect your Amazon business from all the forces trying to kill it?   My advice is to learn from and get to know former Amazonian Chris McCabe. Chris used to work at Amazon in the policy enforcement team. Now he works daily with sellers to mitigate issues and fight suspensions.

‍
He’s been so effective at helping sellers that he’s been awarded the nickname ECommerce Chris. He’s also the host of the podcast Seller Performance Solutions and speaks at leading Amazon events like the  Prosper Show.  Chris is a guy you need to know.

‍
Here’s a look at what we cover:

‍
- Top reasons listings get taken down and what’s in your control.  
- Reasons for listing takedowns that most sellers don’t know about.
- What it was like working at Amazon
- The leading reasons for account suspensions and how to protect yourself
- Top strategies for brand defense and fighting sabotage.
- The best strategies for preventing problems and getting listings and accounts reinstated.

‍

Chris McCabe

Via LinkedIn

ecommerceChris

Seller Performance Solution Podcast

‍

Episode Transcript:

Brett:

Well, hello and welcome to another edition of the eCommerce Evolution Podcast. I'm your host, Brett Curry, CEO of OMG Commerce. And this is a special episode for all of you Amazon sellers out there. This episode will probably both strike terror into your heart, potentially give you nightmares, but it will also bring peace and comfort and give you hope in the midst of the storm. Today, we're talking about listing take downs and suspensions on Amazon, both how to avoid them and/or mitigate them, and then how to get things back up and going when you do face either a listing take down or a suspension.

Brett:

My guest today is an absolute expert in this category. You'd be hard pressed to find someone with more experience on this topic. I have joining me today, Chris McCabe, he's the founder of ecommerceChris. I want to hear how he got the nickname ecommerceChris, that's an awesome nickname and the name of his company. He was a former policy enforcement team member at Amazon. So the stuff we're talking about today, he did at Amazon back in the day, so I want to hear maybe a couple of good Amazon stories while we're at it. And so with that, Chris, welcome to the show. How you're doing? And thanks for coming on.

Chris:

Yeah, thanks for having me. That's an excellent introduction. I loved it. I loved it.

Brett:

Good, man. Yeah, I really appreciate this. I've heard good things about you. I think your nickname/company name alone is a good reason to have you on the podcast, ecommerceChris, you go there. But if you would talk a little bit about, what was your experience like at Amazon? When were you there? And just in general, what did you do? And what was that like?

Chris:

I worked on this so-called seller performance teams, the performance evaluation and policy enforcement teams. What you said about the nightmares that sellers might fear after this episode, I'm numbed to those nightmares. I went through six years on the Amazon side of it, I've been doing this for six years, so about 12 years total at this point of the day-to-day, hour in, hour out of, "How do I appeal this suspension?" That's what all these sellers are afraid of. When I worked at Amazon, yes, we were reviewing accounts all the time, every hour, sending warnings, deleting listings, sometimes canceling all their listings if they hadn't been properly, put together, broke rules, and of course, suspending accounts.

Chris:

The flip side of suspending accounts was we got to reinstate them if we found that they had submitted an acceptable appeal that hit all the right points and addressed whatever shortcomings we had previously identified. So that was the day-to-day of the job. In terms of interacting with other Amazon employees and managers, Amazon's just a heavy duty place to work, there are high expectations, they want you to be quick, they want you to be smart, they want you to be good, and you have to perform. Just the way sellers are evaluated with performance metrics, so were we, and if your number is wavered, then you'd have a little sit down.

Chris:

I ended up getting promoted and mentoring others because my numbers were good and my accuracy was good. That's the shorthand version of why I excelled in my position. Towards the end of my time at Amazon, I got what you've maybe heard from other books and articles about Amazonians getting burned out a little bit. But I think by the end, I already had a sense that I wanted to do this for a living and not stay in Seattle, but also not stay working for Amazon. I wanted to help sellers from the other side of the fence.

Brett:

That's awesome.

Chris:

The pace, I was used to it, but years and years of that pace does grind you down, that's a fact.

Brett:

I could totally see that. All right. Well, I want to unpack a few things. So Chris, tell me about the grind because I hear stories all the time, I know several former Amazonians. I've heard the Jeff Bezos quote that, "Hey, you can work long, smart or hard, but at Amazon, you can't choose two out of three, you just get all three." And so, what was the grind like?

Chris:

Amazon's a company where you're supposed to feel honored and privileged to work there too, so they don't give you a lot of freebies or free meals or they don't coddle you. People know about the Google cafeteria and working at Facebook and all these perks.

Brett:

Yeah dude, I've been to several Google campuses and it's like a playground. And they expect the people to work hard too, but they really take care of their people unbelievably well. The food was just fantastic.

Chris:

Yeah. Amazon is more workplace where it's believing in their mission, being excited with their goals, which has taken over retail. Let's be honest, what are they trying to do here? It's not just about ecommerce, they've already done that. You're there to put your brains to work, you're happy to be there. Their attitude towards a lot of employees is kind of, if you don't like it, leave. So you're not coddled. There's good parts about working there. I wouldn't have stayed there as many years as I had without enjoying most of it, but it's not a place where dissent is really tolerated. And they don't reflect that in their core principles when they say like be open to disagreement and discussion. I never found that to be the case. It was a top-down hierarchy.

Brett:

Oh really? So they were not open to disagreement?

Chris:

Yeah.

Brett:

And that's so interesting. So we're actually, as a company at OMG, we're going through some of the Amazon leadership principles, like the 14 Core Leadership Principles, and they're fantastic, but that's really interesting that they don't... So they preach dissent and disagreement, but they don't necessarily welcome that from everybody?

Chris:

Well, you have to be open to being wrong if somebody disagrees with you, but proves you wrong with either data or experience or examples that I think you have to be willing to admit that you misjudged something, maybe not made a complete and total mistake. But I didn't get that sense from manager or above types, they seem to say like, "We're being measured on these very strict goals, we have to meet them. We've decided how you're going to help us meet them and that's the end of it." A lot of stuff just started not making sense towards the end of my tenure there, especially my last year at Amazon, I was being asked to do things that made no sense.

Chris:

And not only does it kill your morale, but it makes it hard for you to do your job if you don't even believe that what you're doing is accurate or useful or necessary. If it's just like, I don't know what an example would be, somebody who's just asked to push paperwork around but they're not really doing anything with their day, the old fashioned corporate people who were numb to that. And there's just so much room for improvement with what Amazon's doing. As much ass as they're kicking right now in terms of ecommerce and the growth of the marketplace, there's so much they could be doing better with sellers in particular.

Brett:

Yeah. I'm sure there are a lot of sellers listening right now that are giving you a virtual fist bump...

Chris:

Yay.

Brett:

... Chris, that Amazon could be treating their sellers way better. And I'm sure that is true. I know that's true. And yeah, it's one of those things where you can handle long hours and you can handle the grind and you can handle the pressure and the expectations. If you agree with what you're doing and you feel like you're serving a purpose, but then when there's incongruency or being asked to do things that don't really line up or make sense, I can totally get how that would fuel burnout, speed it up and just make you... If you are thinking about doing something else anyway, that's going to likely speed up your time horizon and make you want to exit the whole cluster.

Chris:

Amazon's expecting you to consider your job the number one thing in your life. You can have a family, you can have other things in your life, but you have to be able to juggle them all or balance them all. That's on you, they don't consider it their role to make that juggling act easier on you. That's up to you to figure out.

Brett:

Yeah, that's what I've heard from. so many.

Chris:

It's fairly consistent. Yeah.

Brett:

Yep. So then, where did the nickname ecommerceChris come from? Do you remember the actual story? Obviously, it makes sense, you're in ecommerce plus all that.

Chris:

I didn't want to have Amazon in my company name, just a basic legal angle there. But beyond that, when I first started, I wasn't planning on only doing Amazon, and for the last six and a half years, I have only done Amazon. That wasn't my original intention. So I didn't want to be Amazon centric, I wanted it to be ecommerce, maybe even I would learn about some of these other marketplaces. I was researching Etsy and handmade and stuff like that just to educate myself on other kinds of sellers that I wasn't maybe used to dealing with. But then as soon as I updated my LinkedIn profile and said what I did at Amazon, the flood gates opened and I just had all these Amazon sellers constantly asking me for help.

Brett:

Yep, totally makes sense. Two million Amazon sellers and growing, and the problem you address is a growing problem, it's real, it's painful. And so, yeah, I think you've got all kinds of room to grow and expand just doing what you're doing.

Chris:

And I didn't even know that really at the time. I knew the marketplace was growing, I knew some of the basics. When I left Amazon and took a year off to travel, probably over a year. And when I came back, I wasn't 100% sure what the state of the marketplace was or how they were dealing with sellers. I had to go through some of the messaging that sellers had, which back in 2014, the messages were much higher quality. They weren't great. That was one reason I left, I didn't think Amazon could communicate with sellers anymore, but they were much better than they are today.

Chris:

So I didn't really know that until I started helping sellers with Q&A and writing appeals and, would it be reviewed properly on the inside? I wasn't sure until I tried it, really.

Brett:

Yeah. I want to get into some specific tips and tactics and things to avoid. And I think this is going to be an extremely helpful podcast for people. But I think part of the problem, part of the reason why Amazon doesn't communicate well with sellers is just the growth is too fast and they're not able to cope with it, or is there something else there that's causing this?

Chris:

More specifically, I think they're having trouble marrying their automation to human investigation. Their machine learning hasn't caught up to all the things that are going on. There's a lot of abuse of their tools, of their algorithms. A lot of people gaming the system. I don't think their machine learning's caught up really, whether it's reviews abuse, something like that, or buyers.

Brett:

Yeah, it's just I think such a huge problem. I know people with legitimate reviews that are getting dinged and then you see some listings and you just know that it's been manipulated and they're not real reviews.

Chris:

They're still catching up. They're finally adding more head count. The reviews abuse team is a good example, PRA. Product reviews abuse has by some measures tripled their head count. They finally added more people, but it's not syncing up enough with their automation to make it meaningful. So they're still struggling with standard operating procedures, different systems and processes that they're trying to put in place to make the scalability of the work more within their grasp, and they just haven't gotten there yet.

Chris:

Unfortunately, I think people who are looking to abuse the system or cheat their competitors out of some revenue are aware that Amazon is way behind on some of this stuff and so they're manipulating things for their own ends. And it's unfortunately creating not just bad seller experiences, but I don't know if the wider public understands that this creates more negative buyer experiences.

Brett:

It totally does.

Chris:

You mentioned Jeff. Jeff's number one goal with creating Amazon was to create the best online buying experience-

Brett:

Yeah, the most customer-centric company on the planet.

Chris:

Most customer centric, but no one's really connected the dots to how negatively impacting buyer experience some of these tricks and gaming the system and some of these fake out moves that sellers are doing are hurting buyers too.

Brett:

Yeah. And it just makes you question your next Amazon experience too. If you do get duped, you buy a product that's not as great as the reviews say it is or doesn't really live up to the description and things like that, it really questions your next Amazon purchase. So obviously, Amazon has identified it as a problem, but the AI and the human efforts just are not in alignment yet. Hopefully they'll be able to fix that soon.

Chris:

Maybe this is Andy Jassy's big move when he comes in this summer, he's going to figure out how to take machine learning and combine it with a human account reviews, manual investigations and make them 10 times more effective.

Brett:

He'll end up appearing before the Senate. He's going to be the anti-trust stuff. But yeah, that's a really good point. Andy Jassy, he was the head of AWS, potentially no better person to be running Amazon to work on some of the AI problems and automation problems, so super interesting. Well, let's dive in here. We're going to talk about listing take downs, we're going to talking about suspensions. The two are related, first comes to the listing take down, you get enough of those which will then the suspension happens. What are some of the common causes of a listing take down? And if you can share any of your experiences while you were at Amazon, if that's still really relevant, that's great. But why do listings get taken down?

Chris:

They changed a few things after I left around this concept of product quality, item quality. So the number of investigations and listing take downs around authenticity exams or item condition complaints. Item quality complaints or item condition complaints are the big thing right now. A buyer's complaining that they got something that's not what they paid for, not worth what they paid for, not the same quality they expected, not the way it was described on the detail page, any of those things.

Chris:

Obviously, condition, if you're buying something and you get something that looks and feels and sounds used, you're unhappy automatically. So they're drilling down into those types of complaints. They are unfortunately just copying and pasting things around. A buyer might not understand a product or they might not have read the product detail page closely, but they still might blame the seller for, "Hey, you didn't represent this right on the site," or this word of inauthentic gets thrown around. Items might be inauthentic. Well, that means the buyer probably didn't say that it was fake, sometimes they say that too, but they probably just say it wasn't the quality they expected for the price, or it wasn't the kind of item they expected.

Chris:

Those are the main reasons why listings are suspended and why they're asking for a plan of action. Lesser known causes would be like expired products, expiration dates and compliance issues, which I know you and I have had conversations about compliance before. But if Amazon thinks you don't have the right documentation, whether it's FDA documentation or safety testing documentation to list and sell those products on the site, they err on the side of caution and remove those listings until you can prove otherwise.

Brett:

Yep, totally makes sense. So clearly, if the condition is not what you advertised or if it's not the right quality or people are thinking, "Man, I got ripped off, this was not worth what I paid for," then you're going to be in trouble. It seems though, and I'm part of several ecommerce communities and forums, and of course, talk to a lot of sellers, we're all on the growth side, the ad side, the listing optimization side, things like that, but it also seems like there's some good sellers with good products that get their listings taken down. Is that going to be on some of those lesser known things that you mentioned, the perceived compliance issues? When do good products and good sellers get impacted by this?

Chris:

They've had a lot of trouble separating good apples from bad apples, real problems from fake problems, so they're applying the same principles to all sellers, whether or not they match the situation. That's what's scary. If you want to talk about what's scaring me and our clients it's that people who don't really have that many buyer complaints about the products are sometimes being nudged by Amazon to send in an appeal, maybe not a plan of action, but just, "Send us an invoice, we want to look at your supplier. We want to hear what you're doing for better due diligence, better quality control to make sure the product is sound."

Brett:

And that's always scary. Amazon says, "Hey, send us your supplier." "Okay, yeah. Thank you Amazon."

Chris:

Yeah. That's another thing, they're very interested in your supply chain documentation for a variety of cases, whether it's compliance, whether it's proving authenticity, or it's a buyer complaining that you didn't send them something new or you didn't send them something authentic. Amazon is very interested in letters of authorization and invoices that they can accept. They've tightened the criteria around which invoices they can accept. We have some clients that are their own brands making trademark registered brands, and they're wasting a lot of time trying to communicate to Amazon that they are the brand, they are the manufacturer and the invoices shouldn't be rejected for non verified because of what? They tried to call some factory in China and nobody picked up the phone. That doesn't make any sense.

Chris:

But you shouldn't be spending a lot of time defending the authenticity of your products if you are your own brand.

Brett:

Exactly. Yeah. So let's talk about prevention here. And we talked about this when we were doing our prep call a few weeks ago that the old adage, "An ounce of prevention is worth a pound of cure." Sometimes we think the cure is just easier. I think in this case, we're all pretty scared and we want to make sure we are preventing. So what are some of the steps that good sellers need to take to prevent as best they can or mitigate or reduce the likelihood of a listing take down?

Chris:

In terms of the compliance documentation, make sure you have it and have it ready to go. Some people contacted us when they got these alerts from Amazon and they didn't have any of the tests done, they had to find labs, things like that.

Brett:

Is a good resource your site or somewhere where we can quickly get the compliance-

Chris:

You know what, that's one of the big problems in the space. I can say as a consultant that we haven't had solid bonafide... I made a recent connection to Tyler Israel, I don't know if him?

Brett:

No.

Chris:

He is one of the people I met recently, but over the past few years, there wasn't a go-to person for this. There wasn't a firm that was like, "Yeah, we do all sorts of compliance documentation and testing for all kinds of categories of items." That's what we've been missing. It's not something I do. We handle the appeals process. It's the same as legal issues, I'm not a lawyer, but I handle the Amazon side of the process when for legal reasons, the listing is taken down or an account is suspended, I handle the plan of action, part of the appeals process.

Chris:

Same thing with compliance, you need a compliance expert who understands those types of things. And I had a conversation with Tyler, which was really good. It's unfortunate that it took me a few years to find the right person, but documentation is essential. And make sure wherever you're sourcing it, this applies to any kind of seller, reseller, your own brand, you've got a supplier who answers the phone, describes their business relationship with you if they're called, doesn't act like they don't know who you are. They give you invoices that don't look like they were written with a crayon on the back of a newspaper, really acceptable, clean, easy to read.

Chris:

Because sometimes the appeals that we do for people are accepted but then Amazon will reject it based on the invoice or they don't like the supplier and they say, "We looked at your supplier's website, it doesn't look like they make items like what you sell." And they'll reject it for that reason. So make sure that the supplier... Essentially, you have to prepare now and you can't just wing it because-

Brett:

Prepare thinking that a listing take down is coming, right? That's the way we have to think-

Chris:

Well, because an appeal can be rejected for like four or five reasons now. It used to be they just didn't like your plan of action, there was really one reason that they wouldn't take it. Now, there's at least a few. So there's no point spending all your day, lots of energy and research and writing and rewriting a plan of action and then the appeal and they bounce it back because they're like, "Well, we did a Google search and we couldn't find your supplier anywhere, so we don't think they're verifiable and we can't accept this."

Chris:

It's unfortunate that that happens, but like you said, some people don't take that seriously. They get one listing taken down and they take their time getting it back. I don't know, I've seen a lot of sellers not acting with urgency unless that's their top selling ASIN, but they don't understand. I understand account health and your risk score at Amazon is algorithmic, but they don't understand that if you have a few ASINs that have been suspended and you're taking your sweet time getting them reinstated, your risk score is suffering.

Chris:

And account health now has that dashboard, they finally made it easy for you to eyeball it and say, "Hey, I'm in trouble." In the old days you were just looking at reams and pages of performance notifications and you had no idea where you were or what your status was.

Brett:

Yeah. So, let's talk a little bit about that account health dashboard. Where should we really be paying attention? What are the numbers that may matter more than others? And when should we start to get concerned as we're looking at that dashboard?

Chris:

Yeah. Again, algorithmic, so what's a five for one seller is not the same as a one for you, you want zeros across the board. If you have a policy warning, you want to appeal that with all the links to policy pages you've gone over and new procedures you've put into place to make sure you're enforcing that policy internally. You want to appeal that sooner than later, but appeal it well, of course. They have product, condition, item quality, or authenticity complaints. You want to get those resolved because Amazon doesn't want to believe you've got piles of inventory sitting in FBA that could easily, if left unresolved, result in many more complaints.

Chris:

That's a big part of what the appeal process is all about. They want to make sure that you're taking measures now to prevent complaints later or bad buyer experiences later. And then beyond that, obviously, anything intellectual property related, received IP complaints. You want to follow up with those, even if they look like BS, and follow up with the rights owner. It could be a so-called rights owner, but you want to message them, find out the nature of the complaint, what they want from you to resolve it. If it's not a legitimate rights owner complaint, then there are ways of disputing them.

Chris:

There isn't a lot on the dashboard that I wouldn't take seriously except for some restricted products messages and some like food and safety complaint messages, go out to sellers just so Amazon can tell every seller selling that item, "We don't want this item to be sold on this site anymore." That's really all they're saying. They're not expecting you to necessarily appeal it because it's not specific to you, they don't want products with that particular ingredient sold anymore, so they're just telling you all, or they don't want products for whatever other safety reasons, other reasons.

Chris:

There's a lot that goes into that decision, obviously, product recalls, compliance issues. But the bottom line is they're telling everyone that they don't want that to be sold, it's not something you in particular are in trouble for.

Brett:

Cool. So, what other preventative steps would one take? So we're going to be watching our account health, we need proper documentation, we need to have a good relationship with our manufacturer and they need to be someone that visible on Google through Google search or visible on the web through Google search and they answer their phone and those things. What else can we do to hopefully prevent this from happening?

Chris:

And don't blindly ship product sight unseen from your manufacturer to FBA without having some samples at least sent to you, maybe a percentage of each batch or a percentage number of the units that you deal with monthly go to you so you can open them up and make sure that they're exactly as you described them on the site. Because some people I think get in the habit of not seeing product and they just ship to FBA. This is what Amazon is afraid of, that you're never seeing this stuff and that you're not even familiar with the item quality. So when buyers are complaining about it, if you go back to them, "Well, we have a vendor, we're drop shipping. We never see this stuff."

Chris:

I'm not saying you would phrase it that way, but if they get the impression-

Brett:

You can apply that.

Chris:

Yeah. If they get the impression that you're handing the responsibility off to somebody else for quality control, for auditing, picking and packing processes, what the packaging itself is like, the likelihood the item's going to stay secure in the packaging and show up in FBA still in good shape, if they think you're outsourcing all of that or not paying attention to it, then they more or less believe that you're guaranteeing certain amounts of buyer complaints.

Brett:

Got you. So if they get that impression, they're much less likely to reinstate your listing or to resolve it?

Chris:

Yeah. And also I've seen those appeals that sellers write for themselves. They tend to deflect blame like, "Well, this is our manufacturer. They have an agreement with us and they'll inspect product before it leaves the factory and they didn't do it." And there's lots of them. Sometimes people also rephrase it, like, "Well, we hired the wrong employee and it was the employee's fault. And they're the one who was supposed to stay on top of it, and they're the ones who weren't doing it."

Brett:

And really if you think about this, like just leadership principles or the way it sounds is that to Amazon, to the policy team or to anybody that's thinking with a critical eye, it sounds like you don't know what you're doing. You're in a tight ship.

Chris:

Managerial like taking ownership has to be a part of any appeal. We failed to monitor our employees. We didn't manage this process appropriately. That's what root causes are in a plan of action. We could talk a whole other show about how to write a plan of action, but the bottom line is you have to show that you diagnose the problem from an owner or managers perspective. If you're just finger-pointing, honestly, they stop reading and they kick it away.

Brett:

Yeah. Which makes sense, because if Amazon truly wants to be the most customer centric company on the planet, and I think they do, then you better have that mindset as well. And that means you're taking care of the customer, well, not my fault, I can't be held responsible for this way, then you're not going to be selling.

Chris:

A lot of sellers have been doing this with product reviews abuse, suspensions, "Well, we hired some marketing company, I don't know what they're doing. They said they followed the rules." Or, "We used the messaging sequence and I showed it to somebody who says they know compliance in Amazon, they said it was okay. It's like, you're the one who's in charge, the buck stops with you. So if you hired a service like that, Amazon blames you for not vetting them appropriately. You can't blame the service. So I'm not sure why I'm reading…

Chris:

I still read these appeals where people are like, I'm not going to name companies right now, but, "These guys said rebates were okay. We did 100 % giveaways. We did all these." It's like, "Well, you believed them. Whose fault is that that you believed what they were telling you?"

Brett:

It's like telling the officer, "But my neighbors that was okay if I went 100 miles an hour on the street."

Chris:

Or my speedometer doesn't work, so I don't know how fast I was going. So that's okay, right?

Brett:

Right. It always works. That line always works for sure.

Chris:

Don't try this with cops, it is not going to work.

Brett:

Yeah. For sure. That's great. Super helpful. Then let's talk about suspensions. And I'm sure we'll circle back to some other thing, take downs too, but when do suspensions occur and what do we need to keep in mind there?

Chris:

The easy, short answer is watching your account health, and you see a lot of crooked numbers. They used to say about baseball, fucking numbers on the scoreboard for like a high scoring game. If you're looking at your account health and you're not seeing a lot of goose eggs, then there's a problem. You're either not moving fast enough or you're not taking those indications seriously that there's an appeal that needs to be submitted, you're letting it fester over time. If you accumulate more of those, typically these days, they've got that visual display now, you go from green to yellow, to red.

Chris:

Well, by red, you're probably already suspended. It's the people in the yellow range at risk. You have figure out why you're still there. If you appeal something and they accept your appeal, but the numbers don't change on the dashboard, Amazon's tools are ancient. So sometimes the dashboard doesn't, not sometimes, often it doesn't update in real time.

Brett:

Got it. So you may have successfully won an appeal, things are moving in the right direction, you're maybe actually green, but it's still showing as yellow. That's common?

Chris:

Or you shouldn't be at zero for product condition complaints, because you've successfully appealed to them all, and it still says one, two or three or four or something like that. It's because the visual display hasn't updated yet. The important thing is you've got the notification saying, "Yes, we've reinstated you to sell ACE and blink. That's what matters because if you ever get into a call from account health, which you were saying, what happens? How did these suspensions happen? These days a lot of them, you get a call from account health, they gives you 72 hours to write a plan of action to prevent a suspension.

Chris:

So at least then you're still in the game and you can still appeal to prevent it from happening at all. But what are the account health guys looking at? They're looking at your dashboard. On that phone call, you would have to tell them, "Look again, we've successfully appealed a bunch of these, the numbers haven't updated. Maybe you didn't see that in our account annotations." But they don't always just suspend you out of the blue anymore. Amazon had a lot of heat for that. So you should always put your-

Brett:

So you're saying there are more warnings now, there are more that's 72 hours?

Chris:

The Account Health Services, AHS for short, gives a lot of sellers a call, a heads up, "You have 72 hours. Here are the problems in your account. We're calling to discuss them with you." Sometimes it's in writing, it's not a call, if they call you and you're not home or you don't pick up. But a lot of those do turn into full account suspensions because the plan of action that the seller sends in isn't complete, a lot of those get rejected.

Brett:

Got it. Let's just play your nightmare scenario here. We get the dreaded call, it's AHS on the line. You'd rather like talk to the IRS or somebody else probably.

Chris:

Yeah. Same idea.

Brett:

It's the AHS. You got 72 hours. What do you do at that point, Chris?

Chris:

First, get whatever information from them while you have them on the phone or have to call them back about the ASINs. What were the complaints on the ASINs? We looked in voice of the customer, we looked in return comments, we looked in buyer messaging. We didn't see negative feedback for this agent. What are the complaints that flag these on the Amazon side? You want to get that data, you want to get factual information from them. They also exist to help you write a plan-

Brett:

Are they forthcoming in providing that information? Are there are they trying to hide that from you?

Chris:

Yes and no. It's hit or miss. A lot of these teams at Amazon, the training's very inconsistent, the execution is very spotty, but I think that sellers that are savvy about this stuff can push them a little bit to give you the right kinds of information, and maybe that'll make up for some of the shortcomings on the Amazon side when it comes to sharing information.

Brett:

So, ask good questions. You've got them on the phone, don't leave that phone call without getting all the info you need.

Chris:

Yeah. The reason we can debate whether or not this is a real reason, the reason they're cagey about it sometimes is because either they can't see it, they can't find it or see it themselves for their own chaotic reasons, or they are pushing you to go through voice of the customer that in talking to you, they don't think you've done any research, ASINs level research in your account. And they think you don't know what's going on with buyer complaints or brand complaints. It depends on what they're calling about.

Chris:

Complaints about those ASINs, they think you're behind the curve and that you need to do some catching up and they don't want to just set it all up on a platter for you. They want you to tell them in a plan of action, what you could have done better, what operational or deficiencies you failed to correct.

Brett:

Sure. So maybe as you're asking those questions, you're phrasing it, not in a way that's defensive, but in a way that, "Hey, we take these problems very seriously. We want to get to the bottom of this. We want to make sure the customer's taken care of." Rather than getting combative and getting emotional and being defensive. You might not get as much cooperation at that point.

Chris:

Exactly. And that's the root causes that I was talking about a moment ago, you have to nail the root causes, which causes are just what caused the complaints. They don't care about the causes, they already know the causes. And they probably know that you have a good idea what the causes of the complaints are. Root causes, where did this come from? Why did it happen? How did it happen? Why didn't you catch it? What was the failure that wasn't identified and rectified before there were buyer complaints? That's what root causes are all about, your analysis of what went wrong, but in detail.

Chris:

And a lot of sellers miss that chunk, and then the root causes are generic rapport, and then the rest of the POA doesn't matter. Plan of action in terms of... Yeah. Sorry.

Brett:

Just to clarify, we have the phone call, we ask questions, we try to understand as much as we possibly can from the agent. Then from there, we're now seeing our job as get to the root cause. So the where, why, how it happened and how to fix it so that we can map out from there?

Chris:

You're presuming that they gave you some info on the buyer complaints. The nature of them, maybe not how many they were, because they don't necessarily have to be a lot, but the nature of them. In theory, there were some consistent complaints about those products. If you can't figure out what they're telling you in terms of what went wrong and you address the wrong root causes, then your POA, your plan of action is way off and it doesn't have a chance. So you're using them for information, not so much to coach you through the POA writing process. You can do that too, but that should be secondary to getting facts and data from them. Once you nail the root cause is-

Brett:

Your plan of action to be way off base, so it's clearly going to be rejected.

Chris:

Because some people are just guessing because I say, "Well, there's nothing wrong with my products. And we haven't even had that many buyer complaints and account health reps didn't really tell me anything. And I looked in voice of the customer and I saw the usual scattered random stuff, and we took care of those buyers. What's the problem?" One thing you definitely don't want to be is defensive where you say, "Nothing's wrong, what are you talking about? This is BS. Get away from me." That's like rubber stamp denial. We all have things we can improve. I have things I can improve in my due diligence on consulting side.

Chris:

Every seller has something they could improve or maybe they just had a couple of bad luck incidents where things were damaged in transit. Maybe it's a good opportunity to look at the quality of your packaging to see if items were properly secured inside or if they were just banged around and were defective from the damage. If it's really just about the quality of the detailed page content, your images, the written content on the page, there's loads of services out there that help you optimize by clarifying what the heck it is you're selling and getting you better images, making the messaging very clear to any potential buyer that will reduce the likelihood of complaints on the other side.

Chris:

Amazon knows this, I know it. Brett, you're a smart guy, you know it. But people who have manufactured their own products, they're sometimes missing the forest through the trees. They're a little bit too close to it, they're more subjective than objective. Sometimes that's really what it's about, buyers not understanding this description of the product and you have to amend the detail page and that's what needs to go into the plan of action.

Brett:

Yeah. It's one of those things where, "Hey, my baby's not ugly," sort of thing, or to use the Amazon language from their leadership principles, my body odor doesn't stink, some elite leaders don't believe that, is an Amazon principle. So that totally makes sense. Now, how big of a problem is it? And it seems like this is maybe a growing problem where just like we talked about earlier with review quality, people getting fake positive reviews and sometimes thousands of them and it looks totally phony. Or what about a competitor saying, "Huh, I see your listing, it's having success. I'm going to bombard it with fake negative reviews."

Brett:

We have we have a client that we just launched on Amazon, pretty big brand. They're very successful off Amazon, we help them advertising off Amazon as well. And they got a couple of just, you could tell it was folk fake results. It was like, "Oh, the product was way smaller than advertised. And it ran out too quickly." There's no way they could have even used it all. The listing hasn't even been up long enough for someone to consume all of this particular product. And so how big of an issue is that? And is there any way to combat that, people that are just trying to sabotage your listing?

Chris:

Sabotage is rampant and omnipresent. So how bad is it? It's gotten worse and it's become pervasive. It's become commonplace unfortunately. The good news is there are better ways of combating it. There are more places to report that. There are starter email queues that you can try, and sometimes people get results from those, but often they don't and they have to kick it upstairs and see if somebody, manager level or VP level do something about it. The good news is, again, that there are VPs who are dedicated to reviews abuse, and to this kind of bad behavior.

Chris:

Again, their machine learning and their algorithms and their AI isn't quite up to snuff to just identify that stuff easily and delete it before any buyer see it. Often you have to report it, but a lot of systems work that way at Amazon, they're reactive, not proactive. It's reports based, they don't get to it first.

Brett:

One thing I've heard is that sometimes it's hard to get a bad review taken down, and then I've also heard that you can seen negatively if you complain about reviews too much, or you make too many requests for negative reviews to be removed. Any insights on either of them?

Chris:

I certainly wouldn't spam them, especially if you're just giving them conjecture and casual observation, "We think this is fishy." They'd throw that away, they always have. Trying to determine some patterns. Obviously you can't just throw a bunch of data at them and expect them to say, "Yeah, you're right, the math checks out. These reviews are all fake." They have to do their own investigation, but it's good to give them facts and data. And this is entirely implausible. We can't show you exactly who the people are behind these buyer accounts.

Chris:

I've worked with some sellers who were able to trace back some of these reviews to reviewers and get the reviewers banned. When the reviewer is banned, all the reviews they left are gone too. That's a good approach that people weren't doing last year or the year before, but also sometimes they trace them back to a certain Facebook group, which the entire purpose of the group is just a fake reviews or an entire company.

Brett:

We'll pay you four good reviews or bad reviews or whatever the case may be.

Chris:

Yeah. And some of that is just by doing some research on what your competitors are doing to fake the reviews. Sometimes it's as easy as buying from them, looking at their product insert and following the link back to whatever group they created to help you get free products.

Brett:

Yeah, shop your competitors, which you should be doing anyway. Well, you should be looking at some of your competitors' products just to QA it and to get ideas and to see how they're marketing, but yeah, follow their steps and see how they try to market to you to leave a review or whatnot, and then try to catch them. Any other little insider tips like that you can give related to any of this?

Chris:

For reviews or for brand abuse? Because what we're dealing with a lot, is people have their listings taken down because of competitor hacked into their brand registry. That's a big problem.

Brett:

Let's talk about brand abuse, because it does just seem like, obviously Amazon's always been a bit of a jungle and there's always been things that you're playing whack-a-mole with problems that come up, but this sabotage from ruthless competitors is really popping up. So talk about the brand defense there.

Chris:

Yeah. A lot of backend keyword abuse is happening where people have their listings flagged because an elicit term showed up in their backend keywords, but they're not the ones who put it there, somebody else inserted it there.

Brett:

How's that happening?

Chris:

Somebody overrode their flat files with their own, synced that up to the API and overwrote that listing content, which if you're in brand registry, you would think that wouldn't be possible. Unfortunately, it's entirely possible.

Brett:

Interesting. Just a quick side note, I used to do a lot of SEO back in the early days of OMG Commerce, we were primarily SEO. And for a while, there was some negative SEO practices that would go on, where you learned that, oh, if somebody gets too many spammy backlinks, Google the Index as your hard stop, do that to your competitor. And so it was nasty, well, still is, I guess.

Chris:

Similar concept.

Brett:

Google had to create parameters to not penalize you for that.

Chris:

Similar concepts. And then there's just people who buy from their competition and say, "This is fake." Or, "This is unsafe," just to try to trigger some-

Brett:

It ran out, it's too small, silly things. Got it.

Chris:

But things are turning a corner. I hope they continue along that. Two years ago, there was no way to really troubleshoot this stuff. I didn't offer any services about this two years ago because Amazon didn't seem interested in the reviews abuse or the brand abuse, but now brand abuse is everywhere, and reviews abuse has continued to expand. So they had to do something and they're starting to do things that are helpful. So that's a good sign. What that means for you hopefully is that you've got numerous places where you can communicate what's happening to you so that somebody higher level don't open cases with the support, don't stay in the lower level range with this too long. That's just a big waste of your time.

Brett:

So opening support tickets or staying lower level support is not worth your time?

Chris:

Open one ticket so that you can reference a case number when you start complaining elsewhere that nothing's happened. That's it. Don't expect anything from support. Don't really expect anything from initiating a complaint about something in seller central. They've got mountains of those just resulting copy and paste responses that are very watered down, very murky that have very little meaning. Unfortunately, Amazon is still a marketplace where anecdotally things are escalated and that's where the lion's share of correct work and proper review is done.

Brett:

So you've got to escalate things before any work really gets done, before the solution is found?

Chris:

Right. The good news, more good news, we don't want people walking away afraid waiting for the next nightmare.

Brett:

We want to sleep at night.

Chris:

You mentioned the antitrust investigation and around that, and other public stories have brought to light high-level management at Amazon, people that you'd find on LinkedIn that you'd know by name. They might be somebody who doesn't respond to you personally if you emailed them, but they've got staff that they delegate to... Their email might not be public, but maybe you can send them a message on LinkedIn. So these people are known, they're well-known, and you can find out what they do.

Brett:

These guys are switching trends, now are like big time execs, leaders at companies that are pretty well known because they're famous in some cases. And so that hopefully pushes them to take the right action.

Chris:

And if you testify in front of Congress, then people are automatically going to know your name and be interested in finding out how to reach you and show something to you.

Brett:

Yeah. So this was great. And understanding that the brand abuse and review abuse, that creates negative customer experiences as well, and so it has to be addressed. I'm happy to hear that Amazon is working to address it. Couple things I'm curious about from your perspective, one, I'm going to get the name wrong, but there's a program where you can have like a dedicated rep for lack of a better term from Amazon, like dedicated support personnel or whatever. Do you know the program I'm speaking of? And is that worthwhile?

Chris:

I know the strategic account managers.

Brett:

That's it, yes.

Chris:

And then they call it SAS core, but it's essentially strategic account management. Those are the people who have managers who are supposed to be helping them grow, helping them troubleshoot problems. Sometimes that can help with the abuse related work, sometimes they can help introduce you to a category manager. That's what we're spending a lot of time on now for people who are growing and growing, doubling and tripling every year in a category, but still haven't met or interacted with the person that manages the category. That can pay off with growth, with your sales.

Chris:

And just being in the know. I think we've gotten past the point where brands can just happily sell off in the corner and do their own thing and ignore everything that's going on around them. I don't think Amazon hosts that kind of marketplace anymore. So I think you really have to just be with it on trends and what's going on, and what competitors are doing to each other. Not being in the know can really hurt you.

Brett:

Yep. It is one of those classic scenarios of it's what you know, but it's also who you know, and knowing the right people at Amazon, or at least knowing how to get connected to the right person at the right time is super critical. What advice would you give there on how do people stay in the know? Do they follow you at ecommercechris.com and get all your information? Or are there other podcasts or news sources or group, anything you'd recommend so that people stay in the know on these policy issues?

Chris:

I have my own podcast, Seller Performance Solutions. We're covering a lot of how to, and a lot of hot topics on there. And also having some interesting guests for things that sellers might be interested in, but might not impact their day to day so much, but it shows the overall marketplace and how things are going. Also, yeah, ecommerceChris, I've got my blog on the website and I do quite a bit of videos there just covering how to write a plan of action, what to do if you're stuck in the appeals process. I talk a lot about escalations, and that's obviously because I used to work on the escalation teams, but that's the kind of strategy you need to be clued into. It's not just copy and paste.

Chris:

I think sellers that are out there using templates and generic content are falling way behind the times. That stuff doesn't work beyond maybe a single digit percentage of times. It's just not a good use of your time.

Brett:

Awesome. Well, I highly, highly recommend people go check out ecommercechris.com, get that information, listen to the podcast, understand how to go through this appeals process and the escalation process and all of these things. Any other asks you have, Chris? Or what if someone says, "Okay, this sounds good. I feel more educated, I feel like hopefully if I go check out some of these resources, I can sleep a little better tonight." Or what if they just say, "Yeah, but I'd rather just work with Chris if I have an issue." What does that look like? And how do people get started that process?

Chris:

Again, ecommerceChris, my services page, we have a wide variety of levels of service and also different services on there. Some people just want me for an hour, they want to tune things up, they want to do it themselves, they just want some guidance, coaching, suggestions, and so forth. So I have one hour consults, my calendar is open to the public. People that want to hire us per se, to run the project, I'll work until they're reinstated, there's a flat fee, project rates. It differs of course, whether it's ASIN level or account level. But the concept is the same. We manage your appeals process and we write them up, go over it with you.

Chris:

Of course, there's quite a bit of interaction with our clients to make sure nothing's missed. All the Is are dotted, all the Ts are crossed because you want to reduce the likelihood of a denial of any appeal that you send them. And we're easy to find, we're working most of the time. We're not-

Brett:

Yourself, and not just to make Bezos and team more wealthy.

Chris:

We're running a tight ship, but we're also around and reachable and communicative. So if you have a problem, we can at least give you a sense of what we think you need to do to fix it, whether or not you have us fix it for you, we can figure out later. But we understand it's a stressful, frustrating experience. We also understand that if Amazon ran a tighter ship, you wouldn't have the need to call me as much. So it's a tight spot to be in when you've invested that much in your business.

Brett:

Totally makes sense. And just as a quick plug, we know a lot of people that have used Chris and team, and that's why he's on the podcast because my Amazon team said, "You need to talk to Chris." And had several good referrals and recommendations. And so this has been really good, this has been really educational. I feel better for our clients and we also invest in brands and other things. I feel better knowing this information, better knowing you as well. So Chris, man, really appreciate the time. This has been super helpful. I'll link to everything in the show notes, maybe some of those specific resources as well, but go to ecommercechris.com. And then links to the podcast are on ecommercechris.com?

Brett:

Yeah. Sellerperformancesolutions.com if they want to go there, but yeah.

Chris:

Cool. All right, Chris. Awesome stuff, man. Thank you so much.

Brett:

Thank you. Thanks for having me.

Chris:

Absolutely. And as always, thank you for tuning in. I hope this has been helpful and instructive. And hey, here's my ask for you. If you know someone that this podcast will be useful for, share it with them. We'd love to grow our audience. This is really just so we can connect with the community, and so I can meet smart people like Chris. And also want to hear from you, what else would you like us to cover on the podcast? Any guest suggestions or anything like that? And connect with us on the socials. I would love to chat with you there. And with that, until next time, thank you for listening.

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Tom Worcester is a tremendous success story.  Grit, determination and the ability to pivot he has in spades.  He started his ecommerce business lunchboxpacks.com in 2018 to cater to the festival and event-going crowd.  He hustled and used in-person marketing at events to help his theft-proof hydration backpacks (think a camel back, but with security features).  The products took off.  Then the pandemic hit.  No festivals. No in-person events.  But Tom knew his customers still craved community.  So he continued to build community and he helped build another business - Create with Carousel that helps eComm brands build great video content.  

Here’s what we dive into:

• How to build community online for an ecomm brand in record time with a unifying topic 
• How to positively create echo chambers for your brand
• What hooks you need to use to build community
• Creating incentives to grow your community
• 3 layers of a product to consider when you craft a video ad…most people only think about the first two layers
• How assuming you’re wrong can help you get it right with video ads
• When and how to best use CTAs in your video ads

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Tom Worcester

Via LinkedIn

Via Twitter

Via Instagram

Lunchbox Packs

Create with Carousel

Mentioned in this interview:

Smile.io

Weatherman Umbrella

Episode Transcript:

Brett:

Well, hello, and welcome to another edition of the eCommerce Evolution podcast. I'm your host, Brett Curry, CEO of OMG Commerce. And today, we're talking about two fantastic topics, we're talking about building community and what that means and what that can do for you, and then we're talking about one of my favorite topics, building long form video content, video content that converts. And so my guest today, just really excited to have a chance to sit down and chat with him and pick his brain.

Brett:

I've got Tom Worcester on the show here today. He's the founder of Lunchbox, lunchboxpacks.com, check it out, we'll talk more about that in just a minute. And then he's also a partner in Create with Carousel, a creative agency creating some amazing anchor videos for eCommerce brands. We're going to dive into video content, which like I said, is one of my favorite topics. So with that intro, Tom, welcome to the show, man. How you doing? And thanks for coming on.

Tom Worcester:

Absolutely. I don't have as buzzy of a line as OMG CEO, but I'm definitely glad to be here. I appreciate the time today, Brett.

Brett:

Absolutely, man. Yes, thanks for coming on. We had a great chat, I guess it feels like it's been forever ago now, back in March where we were talking about stuff, talking about Lunchbox, talking about your videos, and like, man, we got to do a podcast. So here we are finally making it happen. And so I'm just thrilled to dive in.

Brett:

So you're a master at creating community, and I want to dive into that, because I believe that in the future, as Amazon continues to grow and as opportunities on Shopify and other platforms continue to grow for people to create brands, those that win, those that really become something special are going to be the brands that create community and they create a true brand, not just a product, but a brand and a community. So we're going to dive into that. But before we do, talk about what is Lunchbox, again, it's lunchboxpacks.com. What is it? Where did that idea come from? And then we'll dive into community.

Tom Worcester:

Yes, absolutely. So back in, let's see, 2018, we're 10 years after the Great Recession, we're seeing a golden age of experiences and events popping up. We're seeing almost 40 million Americans a year going to festivals in the States, we're seeing concert goers increase in volume steadily by almost 8% year over year. And so, almost generationally, what we're seeing is that people, especially Gen Z, millennials, were putting the experience economy first. What's the experience economy, Brett? It's where all of a sudden, instead of aspiring to the Rolex, or the Porsche, or an even fancier watch, instead, you've got people who are investing in travel, their experiences, the memories that they're going to preserve.

Tom Worcester:

This is partially fueled by the rise of social media, people want to show where they are as a form of .. But all of a sudden, people are looking to really invest in their experiences. And so back in 2018, we realized that while people were investing heavily in their experiences, nobody was really addressing the space of ensuring that experiences were great across the board. And so we, as a team, went to a couple different events, festivals in 2018. Over the course of one day in Miami actually, we had our friends get pickpocketed in the crowd, we had people standing in hour long waterline because people use hydration packs at these events and they're not quick refills, it just takes a lot of time, so backs up the whole line. And finally, we encountered different security rules at the security guard letting people into the venue or they'd compensate bags for being too big, too small, that one's purple, what are you going to do?

Tom Worcester:

So out of this experience, we looked around and we saw people who were investing hundreds if not thousands of dollars to get to an event, to a city for this peak moment, this idea of a peak moment. And we realized that they were drastically underserved. So Lunchbox came about in 2018 when we launched the antitheft hydration pack, which was meant to be a cure all to the festival experience. We patented a way to refill the bag that lets you get through waterlines in less than 30 seconds compared to traditional Camelback or hydration packs that takes three, four minutes, we made it very easy to access for you, but we inverted the entire design. So there was no external facing zippers, so nobody can reach in and steal a phone or a wallet, which can strand you at the end of the night. And we basically built this whole thing to be customizable, so to reflect the identity of those people who were looking and seeking for experiences.

Tom Worcester:

And so all at all, we were trying to solve the issues and pain points of the festival event experience outside of the web.. So that was the genesis of Lunchbox. And since then, we've brought together this community of events' goers of people all around the world who are simply looking to invest in experiences. Just like Cannon serves the photography market or maybe Osprey serves the adventure packs market, we were starting to realize that there was this identity forming around experience junkies, people who really wanted to be around people and invest in these very amazing peak moments.

Tom Worcester:

And so since then, we've become a live events company, where we go in and we create antitheft fanny packs, antitheft sling packs, we make it easy to stay hydrated at your events, and we make sure that you have a great event no matter what. And so coming out of that, the brand really attracted a certain type of person into our community, which is I guess our buzzword of today, but it attracted a certain type of person who invested in experiences, who was interested in meeting other people and socializing, and was also interested in making sure that the quality of those experiences was preserved.

Tom Worcester:

And so here we are later with a team of six full time and we're getting super excited to have everything ramp back up as we come out of the pandemic. But yes, we've seen experiences get suppressed for the last year, and so, it actually taught us a lot about how to build community, and how to build loyalty, and how to really build relationships at scale. But I think the thing that you nailed most is that community really separates the difference between product and brand.

Brett:

Yes, it's so true. And kudos to you guys for hanging on and weathering the storm of the pandemic, because I think your timing was perfect initially where that 2018-2019 events and this experience economy was booming, but no one predicted the global pandemic. And so, the good news is though, there's a lot of pent up demand, and you and I were talking about that before .. There are people just itching for that next concert, that next big outdoor event, and they are coming. And so they will need the gear to make those events better.

Brett:

So let's dive in a little bit then, how do you build community? And let's talk about maybe some of the early stages, what you did with Lunchbox in the early days, I'd love to also hear the creative stuff you did during the pandemic too, I'm curious. But what did you do in the beginning to build community?

Tom Worcester:

Yes. So I like to think about this in a couple different phases. I think it was the prelaunch phase in 2018, the first year in market phase in 2019, and then the no physical phase of 2020, which actually I think taught us the most. So in 2018, even when we were validating the product, the way that we got people to respond and look at the actual product was by literally walking around campsites of popular festivals with the next version of the prototype that we had.

Tom Worcester:

So we had something like 11 versions of this thing. And so it was hand to hand combat, right. It was go to every single campsite, hey, put this on, what do you think? How does it feel? How does it fit? And it basically became this giant ball of user interviews as we moved..

Brett:

It's like guerilla marketing from back in the old days.

Tom Worcester:

Yes, guerilla marketing, but even free product. And so what this did was two important things, Brett. The first was that it showed us exactly the features that we needed to have that would drive interest and referral later on. And number two, every single person we met, they were an event goer, they were an experienced junkie, all of a sudden, they were following our Instagram, and they were tagging along with us on Facebook, and they were keeping up with us. So this actually formed our initial push of the people who were interested in prelaunch. So that was phase one, right. Going around, getting feedback, getting people invested and co-creating this. And so even through the events later on, by asking people what they thought, and this is going to be an important hallmark of community, they actually now became materially invested in the outcome, which is really an important element.

Tom Worcester:

Now fast forward to 2019, so we've got product in the field, we distribute the first couple thousand units into the season, pre-May and debuted at a major festival called EDC Las Vegas, which has hundreds of thousands of people attending from all over the world. And so we finally had all of our product in the field for the first time and we needed to try to find a way to connect the dots of all these individual customers who had followed us on social, who had backed our original Kickstarter campaign, who had been with us since day one.

Tom Worcester:

So what we did was that we said, okay, we need to come up with a way to identify Lunchbox owners in the crowd. And the packs, they light up, they are distinct, you can tell one person who's wearing it from the next 10 people who aren't. So that festival, over the course of three days, hopped up on a lot of Red Bull, we ran and found every single Lunchbox in the ground, and to every single person we walked up and we said, "Hey, every single time you see another Lunchbox, you gotta go, hey, what's up Lunchbox fam?"

Tom Worcester:

And so after hitting, I kid you not, over 200 people at this event, tapping them on the shoulder like, hey, I love your pack, where'd you get it? Thanks so much for supporting us. By the way, the next time you see a pack like this, you gotta yell, hey, Lunchbox fam. And so-

Brett:

And talking about all the other people that are hearing this standing next by and what is this little community of crazy people yelling lunchbox, oh, and that is a cool pack, really brilliant marketing, yes.

Tom Worcester:

100%. And there's nothing quite like when you hit somebody in a group, a tight group standing in a circle of eight people, you hit them like, hey, Lunchbox fam. You walk away, and then all seven people in that group turn to that person and they're like, oh, so what's lunchbox? What just happened? And they're looking for an explanation.

Tom Worcester:

So weirdly enough, that turned into an immediate countrywide trend where almost every festival in the States or in the ensuing months, had some form of that Lunchbox call out. And so all of a sudden, what this did is this created the ground floor of people identifying each other in our community, and then building relationships on top of that. And then once that happened, you saw people sharing photos, tagging posts the people they met, talking about the music they had experience, Alex from Los Angeles meets David from Colorado, they went to go see an amazing house set together. And so they started to facilitate this sharing.

Tom Worcester:

This is where we started to say, okay, we want to hit as many events as possible in 2019, it's the first year that this is really in the market. So what we started to do was we partnered with local influencers who were going to the event and started to host meetups of people who had Lunchboxes incentivizing them with accessories. And we've got these little panels on the front so you can change the design. So we got free skins. But we would do all these little games to make it more fun. And so all of a sudden, people were now going to a festival, identifying with other people in the crowd, going to a meetup that was hosted by us, getting the group photo, sharing the group photo on social media, bringing all their friends in as natural followers. And so we start getting bigger, and bigger, and bigger, right. Identification, now we have group coagulation, and then we have the formation of digital identity, which is where we are at the end of 2019.

Tom Worcester:

So here we are in November, the meetup that we're holding at EDC Orlando is hundreds of people, everyone's got a Lunchbox, everyone's excited. And at this point, we're active on Instagram, we treat our purchasers' email list like an events newsletter, where's the fun been this month? And so going into 2020, we had a lot of momentum, and we had people who were willing to host meetups, and a lot of people would be creating content, a lot of people are genuinely excited about being a part of it.

Tom Worcester:

So fast forward, pandemic hits. So now all these people who have had an amazing first year of experience, who are telling their friends about, you got to bring Lunchbox to your next festival, they're going to drop the link to the brand in their group chats. All of a sudden, we're in March 2020 and then connection goes haywire. The whole world shuts down, COVID started slipping out of the East in December, January, and boom, the event season is done.

Tom Worcester:

All these people, these experience junkies, needed somewhere to go. All of a sudden, that physical meet up and that physical connection needed to go somewhere. So over the course of 2020, we really defined our digital community. And so we have a Facebook group of 100, I think now thousands of VIP members where they will plan and meet up. And at this time, there were a lot of online concerts, so people were having viewing parties together, people would get on Zoom happy hours, we were hosting a regular happy hours just to check in on the community. We hosted and actually threw a live stream two day event with almost 48 hours of straight music on Twitch raising money for two amazing charities in Canada and New York.

Brett:

Amazing idea. It's amazing because people that love events, that love obviously doesn't go away when you can't travel, and so shifting that digitally totally makes sense. And even if they maybe didn't need to buy a Lunchbox right then, I bet that still had an impact on the business even last year.

Tom Worcester:

Yes. And so I think what we saw is that people needed connection, we gave them a safe place to be, we made sure that they were okay. I think just showing that we cared was a pretty big element. And then while everyone was looking for connection, we were also still developing new products, bringing them in, getting them excited about what was still to come. And I think the most exciting part about all of this is that even in the middle of last year, people are planning meetups together a year from that point.

Tom Worcester:

And so this started when we started to realize that we had a such an engaged community that we wanted to really be intentional about rewarding them. So this was where we started to start to build out our infrastructure for loyalty programming, you get rewards for referrals, rewards for attending meetups, rewards for engaging on social. And so all of a sudden, on the back of this digital community we were starting to see coming together, we were building incentive structures to really drive specifically organic referral, which is one of our most important and track metrics.

Tom Worcester:

So then leading into 2021, finally, the modern day, you've got a community with a big identity behind it, there's real action you can take, we have a way to pair people up at peak moments in their lives, there are people really happy at events, this is their vacation, this is the thing they've been looking forward to, and then they come back and they associate that with the brand, at which point then they're rewarded for sharing the brand with more people, and so the organic flywheel continues. So it was a really iterative process from 2018 to now, and community is one of those things where it's like, you can't build it overnight, right? You can't build it in just a month, it's a grassroots game, and the earlier you accept that, the earlier you can build a community that's going to last.

Brett:

Yes, I think that's what a lot of people just aren't willing to do is some of the grassroots hustle, going from 10 to 10 at the live event or whatever, and then talking about Lunchbox, and having people try it on, and getting feedback. Some of those things that I've mentioned on the podcast before, but sometimes to scale, you have to do things that don't scale, right? You have to have that one on one with individual prospects and customers to get feedback to help you improve the product to build community, and things like that.

Brett:

But you mentioned another one of my favorite concept, the flywheel, right. So if you've got the right components of this flywheel, you will build momentum over time and the community will really hit a tipping point and take off. And so let's unpack that just a little bit. So when you talk about this organic referrals being a big KPI for you, a big focus for you, how are you driving that specifically? Can you talk about some tips or some tactics there?

Tom Worcester:

Yes. So I think the organic referral element, at least for us, comes from a couple different things. So there are things that drive people talking about your brand and then the ways that you capture that value in a business sense. So the ways that you can drive organic referral is a lot of, actually, content creation, right. What questions does your customer have? What problems are they running into? How can you both validate and answer that? How can you be a resource for them? What are the unexpected or unintended question that they have, that you can answer, where they relate that back to you?

Tom Worcester:

So that gets them talking about you, right. They've had a great meetup, they've had a great experience, they maybe watched a video on how to prepare, you've been a material part of their experience getting better. And then on the back end of that is coming up with mechanisms that make it really easy to share, right. One click sharing, or pre-populating text messages, or WhatsApp messages, or Twitter messages, making it really easy to refer with one click, making it really easy to share a link with one click, making it really easy to forward an email and say, hey, you guys should get this. So it's all the mechanisms on the back end that actually help you to convert on all the value driven content.

Tom Worcester:

So when we think about our email marketing and our social channel, we think about, how much value can we drive? And then how can we put little asks embedded within that where you're opening the email because of value? You know you're going to learn something, you know you're going to see something fun, but then through that is, share Lunchbox with a friend, would you like to expand this? And would you like to simply welcome somebody new to the fam and get rewarded for it? So again, having mechanisms on both sides to drive and capture is the main tip and trick here.

Brett:

So cool. And it's critical, obviously, that you have a brand that's fun, and that people want to share, and you built this personality that people connect with and stuff, but then you got to make it easy, right? And then can you talk a little more about incentives? How are you incentivizing the sharing?

Tom Worcester:

Yes. So we basically built an interesting loyalty program where we've got different tiers, and at different tiers, you unlock different levels of engagement. So one of the things that we're constantly focused on is that all members of our Lunchbox fam, as we call it, they're all the same, but the levels of engagement are different, so that becomes a differentiator. Somebody who has joined in the first month and maybe hasn't hit their first meetup yet is pretty different in terms of how they engage and interact than somebody who has been to 15 meetups, and has hosted a meetup, and has submitted 10 pieces of UGC, and so it's different.

Tom Worcester:

So we basically paired our loyalty rewards with different tiers that distinguish those people, while still making sure that everyone is still valued within the community. At our bronze tier, you get birthday gifts, you get some early deals, but that's it. And moving up to our silver, builds on that a little bit, early access to products. Our gold tier is where it gets interesting, you actually are invited to group camps with the team at major camping festivals around the world, you get Zoom happy hours with the team where we talk about new products. And then my personal favorite, if you have enough referral points, where again, you get something like 200 points, which is equivalent to a minor marketing cost for us, but 200 points for referring a Lunchbox, if you accumulate enough of those, you can actually spend that on concert tickets.

Tom Worcester:

So now, we've connected you being part of Lunchbox to you getting to that next event. So if you're an experience junkie, so the flywheel continues to spin.

Brett:

Yes, I love that.

Tom Worcester:

Yes. And then finally, then our Platinum tier, you've got all the above, now you can spend your points on actual festival ticket and you get to join our product testing lab where we send you early access to beta products to give feedback. So at every step, you're getting free product, you're getting value, you're getting access to content, you're getting access to the team, you're literally camping with us. We'll see what happen in three years when the group camps grow to thousands of people, but that's a problem for 2023.

Brett:

Yes, cross that bridge when you come to it.

Tom Worcester:

Yes, but I think a lot of loyalty programs are just, okay, refer for a discount, and I think we wanted to add a much deeper layer to that, and it's like, how do we reward the community members who are the most engage? And for us it's like, how do we get them to more of those experiences that they're really happy about?

Brett:

Yes. And I think that's the key, right, is you're coming up with incentives and rewards, how does your market want to be incentivized or rewarded? And for your market, it's events, right, it's experiences, it's community. And so you're pairing the preferred activity, the desired activity you want the customer to take with some rewards that they're going to absolutely love.

Tom Worcester:

Mm-hmm (affirmative).

Brett:

So any tips on how to structure that, because I know as you get into loyalty rewards and stuff, if it's too complex, how are you accumulating points and things like that, then it becomes almost demotivating or just too confusing for people to want to think about, too much work.

Tom Worcester:

Mm-hmm (affirmative).

Brett:

And then you also need to automate it. So any tips on how to make it simple and any tools you use, any recommendations there?

Tom Worcester:

So I think loyalty programs are not created equal. Like any channel needs to be evaluated as a channel that works for your business, you're selling a very niche car part that somebody is only really going to need to buy one time in their entire lives, you probably don't need a loyalty program.

Brett:

You don't want to create a meetup with those people, they probably don't want to ..

Tom Worcester:

Exactly. Like, hey, guys, does anybody else have a crankshaft from their 2017 Chevy Tahoe?

Brett:

This is brake pad group over here. Okay, that's fun.

Tom Worcester:

Exactly. But so I think step one is evaluating whether it makes sense as a channel, right? Are you either seeing repeat purchases or are you seeing recurring engagement with the brand that justifies it? And then on the backend, working ... I mean, right now, there's so many different providers out there that provide great loyalty program, I'm a big fan of smile.io for affordable ..

Brett:

Yes, I know those guys at smile.io, yes, it's a great product.

Tom Worcester:

Yes, they're really becoming the loyalty layer of the internet. I think you've got a couple expensive options like Yapo, where they're trying to make it simple as well. But what you fundamentally see is that you see these apps enable shareability, I don't think you need to go build this up from ground zero. And then in terms of structuring, it's really making sure that you understand, what are the things you can give away and what are you getting back for what you give? So if you're giving away a 20% discount on something, is that because you expect that the discount plus the underlying profit on that next order is still going to be profitable for you? Is that customer going to refer a recurring customer or is it one off? I think it's understanding the math behind it.

Tom Worcester:

And then in terms of keeping it automated, I go the other way is like, this is my channel, right? I am in loyalty more than anything else, right? And we do annual budgets, we've got a big block of funds that just goes right into loyalty, it's not necessarily an automated thing. So I think while some brands can look at it as an automated endeavor, the fact that we do get so many meaningful one on one touches is almost like hand to hand combat at scale, provided you have a team behind it. So I think it just depends on the business, is it viable? Does it make sense? And do people want to also be together and engage together? Are some of the three key question, but it's hard to generalize when it comes to loyalty because it is a case by case basis.

Brett:

Yes, I love that. I want to make sure we leave time to talk video content and long form video content, and your company, Carousel. But just any last tips on building community, either tips on how to do it or tools to use. I'm assuming you're probably relying heavily on Facebook groups to facilitate some of what you're doing here with community.

Tom Worcester:

Yes. So I mean, Facebook group for us is just because everybody who buys one of our packs has a Facebook account. And one of the things that I think it's important to realize is, especially if you've ... There's two elements, right. There's the first of, does your company or brand have a uniting topic? So maybe for a way, that's travel as your uniting topic. Is it magnetic blanket boards that teach your kids how to build things? And can you build a community of moms around that? Is that the uniting topic? For us, it's music and events.

Tom Worcester:

So first off, do you have the presence of a uniting topic that gets people excited and engaged? If not, I'm not sure that this is for you. If you do, okay, lean in. The second part of it is deciding where it's going to live. And so if you are a community that improves people's business lives and they actually see a growth in their income, then they're more willing to join a Slack community or a discourse community because of what you're offering. If you are offering something that's a lower touch where, maybe I'll join, I'll use an existing Facebook profile to join and talk about music, but I'm not going to create a whole forum profile for it. I think it's understanding like, how far do you think that ask can go? And where can you create a critical mass of people where it creates an echo chamber of people talking about your brand? So I think determining those two things is important.

Tom Worcester:

And then finally, building on that, what are the hooks that you have pulling into your community? Right. How do you post purchase flows, post somebody in? How do your in person events recruit more people? What are the ways that you are socializing that this community exists and it's worth being a part of? Because the more people that you bring in, the greater the echo chamber grows, and the more likelihood that you're going to be able to discover people who are real super contributors to your community. So with those three pieces in mind, you knock all those down and have a solution, and hey, you may have a community that's going to keep growing.

Brett:

Yes, that's fantastic. I love it. I know we can talk a lot more about community, but I want to make sure we dive into our next topic for at least a few minutes. So let's talk about video content. And obviously, anybody who's been listening to the show for a while, you know I love video, big YouTube guy, we do this all the time. But talk to me a little bit about, why did you start Carousel and what do you guys do? And then we're going to get into some of your tips for video creation.

Tom Worcester:

Yes. So during the pandemic, we started to run into our own problems at Lunchbox where we historically have always had our team meet up and create a month's worth of content, then the next month, we meet up and we create a month's worth of content. And the pandemic completely halted that. And for other eCommerce owners, even though their businesses were growing, they couldn't get to a local photographer, local studio, local videographer, it was impossible. But all of a sudden, we were seeing people work from home through Zoom and other digital tools, so we asked the question of, could creative production go remote too?

Tom Worcester:

So Create With Carousel is a bunch of eCommerce experts that have gotten together both on the marketing and production side to figure out, number one, what is the content that is most likely to convert for your brand? And number two, how do you produce world class shoots without having to leave your computer, especially in the video space? So that was the underlying foundation of how we wanted to establish Carousel and how we wanted to grow that.

Tom Worcester:

And where we quickly found ourselves pulled was actually towards more difficult video where it was highly narrative and like anchor ads that brands could use to really explain a product, but really do it in a long form and engaging way. The brand that's holding 90 seconds of your attention on a three minute video, that is a lot more of a purchase intent behind it than somebody who watched three seconds of a 10 second video.

Tom Worcester:

So the person who's the better storyteller around an already great product is creating this opportunity for conversion. So we very quickly gravitated towards these more complex narrative anchor ad that were fun, and goofy, and interesting, but most of all had layers of call to action through them. So we had not just one shot to convert customers, but three or four shots to convert a customer. And then you would click on it, hit on the landing page where all the assets on the landing page corresponding to the ad, so it's just a very tight campaign through and through followed by, of course, retargeting assets that nailed specific objections.

Tom Worcester:

So we started to think about the full funnel of marketing for eCommerce brands rather than individual, here is your ad, good luck. And so I think combining the ease of production without having the stress of having to do all the things that make a production great, as well as thinking full funnel strategy, emphasizing long form content, especially in a world of iOS 14.5, which Brett can tell you about, we realized that there was an opportunity for us to just tell product stories but better.

Brett:

Yes, I love that you guys did this. And like I mentioned, I'm a big YouTube guy, big video guy, supporter of that for sure. And what we're seeing on YouTube is that long form content does work. That the videos that are scaling from 10,000 to 20,000 a day in spend are typically 90 seconds or longer. And I'm even hearing from some of our clients who saw on Facebook that even though Facebook is pushing for shorter form videos, we have one big client, great friend of mine, where they're scaling on Facebook now with a three minute video. So I think it goes back to what you said, storytelling, and are you keeping someone engaged in? And do you have multiple layers of CTAs? And we've got a whole formula we talked about, I want to dig in and get your formula or philosophy as well.

Brett:

But yes, and you mentioned an anchor video, we would call it a manifesto, where it's this video that really tells the story and separates the product from all the other competitors, and that's what works great at the top of the funnel, and then you have other videos that you can run at other stages of the journey and whatnot. So how do you guys approach creating an anchor video? And I think this will be useful because there's probably some tips in there that people can grab hold off.

Tom Worcester:

Yes, so I think there's obviously a couple of components here. The first is that we assume we're wrong. And what I mean by that is, it's not our opinion as a marketer if a video is great, it's not your opinion as a founder if the video is great, it is ultimately the market that determines whether something's great.

Brett:

100%.

Tom Worcester:

So what we do is we build everything with modularity in mind. So when we write our introductions, we don't write one introduction, we write four introductions and you're going to run the one that's going to perform the best based on who's watching the first three seconds. When we write our main body, like the main meat of it, we write it so all the blocks are interchangeable, so that we can deliver editing variations where maybe if you're selling great umbrellas, for example, maybe block one is that, it's a sturdy umbrella, block two is that you've got Bluetooth tracking, and block three is that it's reflective at night. You can interchange those blocks based on what different consumers are going to respond to and make the content itself more modular.

Tom Worcester:

And then finally, we wrap up with conclusions and CTAs that hit at the end of each block. So hey, if you care about reflective, yes, after this block, we're going to put a CTA that says, oh, so if you don't want to get run over tomorrow, get this umbrella at website here, or if it's, hey, if you don't want to get blown away in the wind and keep throwing away crappy corner store umbrellas, get this. And so you attach CTAs to specific benefit statements rather than at the end of a video where most people aren't getting there anyway.

Tom Worcester:

And so I think on top of that, after we've come up with a bunch of different introduction to get into the video, a bunch of ways to recut the middle of the video so you have the most options, we also think about, what happens after the video? And what we mean by that is, why is somebody not going to buy this product?

Tom Worcester:

So for example, one of our recent clients had a standing desk, great standing desk, goes up and down, automated, it's got lights, got speakers, this whole thing is souped up. But what are some of the reasons that somebody may not buy that? So in the same shoot that we're doing the anchor, we'll shoot these mini assets where it says, okay, worried about the cost, well here are all the reasons that the cost is worth it, or worried about the setup, here's how you set it up really simply, or worried about how it's delivered, here's how it's delivered. And so we think about not just the ad, but the response to the ad that basically builds on top of that, making sure that you're hitting each individual objection.

Tom Worcester:

So I think the big first part of it is, think holistically and assume you're wrong and give yourself enough variability to then edit and adjust. And then the second part of it is, don't just think the ad itself, think about the response to the ads. If you've got somebody on the hook, how are they going to go from on the hook to a fish in the barrel? But I think those two things are pretty big parts of our strategy when we're thinking about how to properly construct this type of narrative.

Brett:

I love it. And then I've talked to a few other video production companies or at least one other that thinks that way where we're saying, hey, we're not just going to take a chance on one hook, right. There may be one hook, one opening that you as the founder like, and that we as the video people like, or the media buyers like, whatever, we're not just going to base the whole thing on that, because what if it doesn't work? What if we're wrong? A lot of times we are, right?

Tom Worcester:

Yes.

Brett:

In general, we're going to find something that works, but having this modularity or these different blocks that you can stack and change I think is critical. And the beautiful part about what we do here with digital marketing and anything that's Facebook or YouTube or whatever, is we can test it, right. We can test these different mashups of a video, and we may find that, hey, this opening A with problem solution statement C, that combo really works for this audience, but another combo works for another audience, or this combo works for a top a funnel but another combo works for lowering the funnel. And so I love that you guys approach it that way, that's just awesome. Cool.

Brett:

And then what are you thinking about as you look at a product? And this is cool you mentioned the umbrella, is that a real product by the way, or did you make that up on this one?

Tom Worcester:

No, that's a real product that my friends over at Weatherman Umbrella, which unbelievable DTC company based in Brooklyn.

Brett:

Nice. Nice. Very cool. So what else are you looking for to bring out the best story about a product? Any tips or ideas you have on, how do you uncover the golden nuggets in a story behind a product?

Tom Worcester:

So I think there's three layers to any product use, and I think a lot of people get trapped in the first layer. So obviously, when you're looking at a product, you've got the product features, right, the literal descriptions of what this thing does. And then you can bring those features to life in the next layer, which is your benefit layer, right. So back to the umbrella thing, well, if the feature is, it can withstand 55 mile an hour winds, right. And then the benefit is that, if it's an awful rainstorm, your umbrella isn't going to invert.

Tom Worcester:

So the consumers generally relate to benefit statements far more than a feature statement. But the next layer, and I think that you can take it even further, and again, we've talked all day about the experience economy, but the next is the experience layer. So what is it like for someone to experience that benefit in the real world? And so that's where we really like to focus on our narratives, where it's like, we like to build scenes that don't just say, hey, your umbrella is going to blow away in the wind, we're going to show you that scene of a 40 year old woman who just finished a 12 hour day at work and her umbrella is fly away, and then in the next shot we're going to show you the comparison. It's not about highlighting the feature necessarily, it's about showing, what is the end user experience of that benefit.

Tom Worcester:

And so I think that really bringing those benefits to life through a variety of different experiences helps you to hit a wider target market and also just really bring the story to life. Show, don't tell. And the experience layer is the best way we found to really bring that.

Tom Worcester:

Now, if somebody is comparing a product, if they're looking at two different mattresses, Casper versus Purple, they're going to be looking at the feature, they're going to be looking at the price point. But if you're introducing a product, you want to make the case of, how is this going to make your life better? Why should you care? And you do that at the experience layer.

Brett:

Yes, it's so good. And it's one of those things where you want a prospect to envision themselves using and benefiting from the product. You want them to feel that experience like, hey, that could be me. And so I really like how you broke that down. And you're right, if someone's comparison shopping, then future benefit that's going to probably win the day, but if someone's just being introduced to it ... And I think even if they are comparison shopping, they still need to experience it, feel it and picture, okay, this is what it's going to be like when I own this umbrella, or this mattress, or whatever the case may be.

Tom Worcester:

Yes. And that's why you see unboxings do so well, because people are like, what it's like to open a package. I know what it's like put that in for the first time. And that's why testimonials do so well, because they see themselves in the person.

Brett:

That's right.

Tom Worcester:

I think the term is almost visual empathy, right. How do you get that person to stand in somebody else's shoes through video storytelling? I mean, that's the goal, right?

Brett:

Yes. And it's so interesting I think a lot of times, and this used to be, probably is till today with some big ad agencies is they think, oh, unboxing, that's a tired idea, right. We don't want to do that idea, it's played out. Or testimonials, everybody's on testimonials, that's old school. No, we're going to do something super new and creative. But that stuff just works, right, good testimonials properly executed from real people that are saying compelling things, they work. Unboxing videos at a certain stage of the buying journey, they work, people want to see it, they're interested. That's why there are a few search for the latest iPhone unboxing videos, some of those have 12 million views, people want to see unboxings.

Brett:

I think there's this pull or this drive to make something super creative when that's not really the point, right. It's about telling a good story, and in some cases, following formulas and setting yourself up for testing like you mentioned.

Tom Worcester:

Yes.

Brett:

And so, we're just about out of time, I want to wrap up. If someone's listening and thinking, all right, I need to talk to Tom or the crew at Carousel, how do you guys work and where can they find out more about you?

Tom Worcester:

Yes, so you can reach us on www.createwithcarousel.com. We've got a bunch of different services ranging from mail in photo shoots, to studio sizzles, to my personal favorite, which is anchor ads just because they're the most fun. And we can get in touch at the bottom of that website. And if you're looking to stay in touch on social, I am, TZWOR on Twitter, or realtomwor on Instagram. So I'm one of those guys where I love to D2C, I love community and I love talking about this, so always be willing to take the conversation a little further.

Brett:

Awesome, man. And I will link to all of that in the show notes. And then also, mention Lunchbox as well, because I think two reasons people will want to visit that, one, maybe you're listening and you're dying to go to the next music festival and so you want to get a Lunchbox, or two, you're another eCommerce store owner and you want to watch someone that builds a great community and does great marketing. So how can people find out more about Lunchbox?

Tom Worcester:

Yes, so we're at Lunchboxpacks on all channels, you name it. And then our website is lunchboxpacks.com. And then we have our Facebook groups are private to members only which, again, part of the whole thing, but we often cover our community on our YouTube channel. And again, our website features everyone that you'd be interested in checking out, so lunchboxpacks.com.

Brett:

Awesome. Tom, this has been fantastic, man, been a ton of fun. Thanks for taking the time. Thanks for coming on.

Tom Worcester:

Awesome. Thanks so much, Brett.

Brett:

Yes, absolutely. And thank you for tuning in. Hopefully you enjoyed this as much as I did. And hey, I would love to hear from you, lets connect on the socials, let me know what you think about the show, would love any feedback, any guest ideas, topic ideas, fire them my way. And with that, until next time. Thank you for listening.

‍

We’re all but guaranteed to see another record holiday season on Amazon this year. But that does not guarantee that you will have a banner holiday season. This year is sure to be challenging for online sellers. More shopping will take place in stores than last year during the height of the pandemic. Ad cost are also on the rise. Combine all of that with increased competition and you see why success this holiday season won't be easy. Getting the most from the Cyber 5 and beyond will really boil down to three things:

1. Covering the basics. Proper inventory levels. Understanding  key selling dates and Amazon’s deadlines. Getting the right badges. Having listings optimized.  Without the basics in place, you’ll be seriously behind this holiday season. We’ll help you get ready.  
2. Getting an edge. This year is sure to be uber competitive for Amazon sellers. Do you have your lighting deals and coupon strategies ready? How’s your storefront, A+ content, and Amazon posts?  Is your Amazon ad strategy primed and ready? We’ll uncover the tips you need to get an edge.  
3. Going full-funnel and leverage what’s new. This is the year to go full-funnel with your Amazon advertising efforts. It’s also the year to fully leverage new offereinces from Amazon including new sponsored brand video targeting, Amazon’s customer engagement  beta, new display options and more. Plus, it’s time to consider a few off-Amazon strategies that only a tiny percentage of sellers are leveraging.  

We cover it all in this episode. Check it out and then share this with your team and other sellers you know who might find it helpful.  

‍

Chris Tyler

Amber Norell

Mentioned in this episode:

Amazon Posts

Amazon DSP

Amazon Customer Engagement

‍

Are you fully prepared for Holiday 2021?  This year is sure to be unique.  While eCommerce is still growing, it’s growing at a slower rate than last year.  Stores are opening, and, for now at least, shoppers are spending more money on experiences than they were during the height of the pandemic.  So how can you maximize your online holiday sales this year?

In this episode, we listen in to the recording of the recent webinar we hosted that covers 7 ways to have a record holiday season including:

• How to leverage the latest YouTube ad formats to get more exposure and more conversions at a lower cost.
• What you’re likely missing with your current search and shopping ad structure and how to fix it.  
• Why now is a great time to consider Google Smart Shopping Campaigns
• How to deliver the right holiday message at the right time
• How to combat rising ad costs
• Plus more!

‍

Matt Slaymaker

Via LinkedIn

Vanessa Carvajal

Via LinkedIn

Mentioned in this episode:

The Ultimate Guide to Google Shopping

eE 157 Arri Bagah

eE 170 YouTube Virtual Event

Groove Rings

Original Grain Watches

Native Deodorant

BOOM! by Cindy Joseph

Eddie Bauer

Google Smart Shopping

Google Discovery Ads

TrueView for Action

Google Merchant Center

Wicked Reports

Rocker Box

Northbeam.io

‍

With iOS 14 and privacy updates throwing advertisers for a loop and increased ad costs making reaching your ad goals harder than ever, scale on Facebook may seem illusive. 

On today’s episode, I wanted to hear from an up and coming Facebook ad manager and co-host of the Rich Ad, Poor Ad podcast Dyland Carpenter.  Dylan specializes in eComm media buying and is fanatical about testing, experimenting and finding ways to scale ad accounts.  Here’s a quick look at what we cover in today’s episode:

• Common mistakes keeping you from scaling with Facebook ads
• Why creative is everything and how to approach creative testing
• Finding the winning campaign formula - learn how Dylan uses controls and tests to always be leveling up.
• Thoughts on iOS 14 
• Budgeting for scale and how to be aggressive without breaking the algorithm 
• Plus more!

Dylan Carpenter

Via LinkedIn

Via Facebook

Via Twitter

Koality Media 

Rich Ad Poor Ad Podcast

Mentioned in this episode:

Zach Johnson

FunnelDash

Google Unskippable Labs

Promo

Billo.app

Animoto

Nick Shackelford

Geek Out

Billy Gene

Neil Patel

‍

Episode Transcript:

Brett:

Well, hello and welcome to another edition of the eCommerce Evolution Podcast. I'm your host, Brett Curry, CEO of OMG Commerce. Today we're talking about scaling on Facebook ads and how things are shifting and changing and how you should be scaling right now with your e-commerce business. I've got a guest today that I think you're going to absolutely be blown away by, both in terms of his podcast skills and in terms of his Facebook ads skills.

Brett:

I'm delighted to welcome to the show, he's the co-host of the Rich Ad Poor Ad Podcast. Love that title. One of the greatest podcast names out there right now, in my opinion.

Brett:

He's also the owner of Koality, and that's like the koala the bear and TY, Koality Media. Does a ton on Facebook. With that, Mr. Dylan Carpenter. What's up, Dylan. Welcome to the show and really stoked to be chatting with you, man.

Dylan:

Yeah. Brett, man. Thanks for having me on. I'm getting sweaty listening to that intro. I'm like, "Man, hype."

Brett:

I love throwing out a good intro. You've earned it. You've got a great business. You've got a great podcast. So, yeah, I'm excited about this chat. But you and I, we get to record a podcast. I'm going to be on your podcast either in the future or in the past, depending on when someone's listening to this. But we had a blast with, "Hey, let's flip this. Let's get you on the eCommerce Evolution Podcast and talk Facebook ads." So here we are.

Brett:

But tell me, Dylan, just a quick background, how did you become a podcast host and how did you become a Facebook ad specialist in e-commerce? And so, just the quick story, if you can.

Dylan:

Yeah. So for the podcast, we just fell into it. Zach and I were looking for something to do, to be honest, and he had a huge audience already. So we..

Brett:

Yeah. Shout out to your business partner, Zach, and a quick plug on Zach.

Dylan:

Zach Johnson, FunnelDash. But yeah, we had one called The Benchmark first. It was really metric-oriented. We wanted to know your CPA, your CAC, your RoAS, break even points. But it was a little too personal for businesses to share. So Rich Ad Poor Ad came out. It was a lot harder than I thought it was going to be to launch a podcast. But luckily, we have a good team behind us. We've got three people who do the video editing, the transcription, the website, the blog posts, the copy for all of us. It's pretty -

Brett:

It's pretty labor-intensive, man. It really is a lot more work than I thought. When we first started, we were like, "Oh, you just hit record and then post it and then see." He's like, "No. If you do it right, there's a lot that goes into it."

Dylan:

Yeah. So we fell into it. Luckily, is we've got 115, 116 episodes recorded right now. We've launched about 60, 65-ish. It's getting good traction. We've had Billie Jean on, Neil Patel. So a lot of big names. For Zach, it's a good funnel for FunnelDash. But I mean, on my side, I just love to talk to badasses like you and network myself further and get more out there to build my authority, essentially.

Brett:

Yeah.

Dylan:

But yeah, it's about 80 to 100 bucks an episode to cost us right now. It's slowly racking up, and we're fixing to launch some ads for the podcast actually too.

Brett:

Nice.

Dylan:

That'll be cool. But when it comes to my bread and butter, Facebook ads, I actually randomly fell onto it on indeed.com. I graduated from Texas State here in Austin May of 2017. I did marketing with a sales concentration, and I almost moved to Orlando, Florida to be custom suits tailor at Tom James to pitch suits and sell suits. I played ice hockey. I loved suits. They looked fly.

Brett:

Which, by the way, for someone watching rather than just listening, two things. One, you're rocking a killer stache right now. So I've got to give respect to the stache. You need to watch it to see that. And then also, too, if you look in the background, you've got a picture of the Miracle on Ice, which you've seen the movie. Miracle writes a great one. You play hockey. Is that your favorite movie of all time? I mean, you've got the mural thing, so it's obviously important.

Dylan:

It's up there. My dad won that in a poker tournament, to be honest, and I just loved it. But it's signed by the whole team.

Brett:

Wow, that's awesome.

Dylan:

I couldn't sell it for a hundred K, but I'm probably never going to sell it. It's so sentimental at this point. I'm a hockey-

Brett:

1980? When was that?

Dylan:

Yeah.

Brett:

Okay.

Dylan:

yeah.

Brett:

That's amazing.

Brett:

You were going to move to Orlando, be as suit tailor. Then you thought, "No, I'm going to do Facebook ads instead."

Dylan:

Yeah. They flew me out. I didn't like it. My brother worked at Accenture. I looked on Indeed, Accenture sales job, a random sales job popped up. I applied, got a call. It was for Facebook. I went to interview there, got a job literally two hours after my interview. So I started as a marketing expert. Knew nothing about Facebook ads. I'd boosted some posts in college just to get people to come to our hockey games, but I didn't know what I was doing.

Dylan:

Yeah, after three months there, realizing what I was learning, I was like, "Oh, this is lucrative." I became a sponge, took like 10 pages of notes and journals and stuff, and really just asked a ton of questions. After being there for a year, I left. Started Koality Media, and do a lot of freelance work. It's been history ever since.

Brett:

Yeah. I love it. One of the reasons I want to have you on, one, you're an awesome podcast host, also an awesome guest. But I love getting different people's perspective on how to run Facebook ads. As you know, I'm a YouTube guy and a Google guy and also Amazon ads. I don't play in the Facebook ad space, but I understand it decently well. It's obviously a huge part of most of our clients' media mix.

Brett:

We will get into some of the new changes and iOS 14 scares. Depending on when you listen to this, it could be heating up or it could be all in the past. But definitely want to address that as well. But I love getting different people's perspectives. And so, as we look at scale, because that's what every e-commerce brand wants, whether they're looking to sell their business or hold it and just grow it, increase the value, you want to achieve scale. How do we achieve scale on Facebook?

Brett:

Like you and I were talking about, lot of people listen to the podcast, already running Facebook ads. They're just looking to take it to the next level, or maybe things have stalled out, or maybe they are dealing with iOS 14 issues. From a creative perspective, so the ads themselves, what do we need? What do we need to be thinking about so that we can really achieve scale?

Dylan:

Yes. Creative's everything. I know we're going to talk about ad account structure, campaign structure, which will tie into this at some point, but creative is everything. It's not about the audiences, the bids. It's all your creative, basically. What's really helped us scale, I think is, creative -

Brett:

Just one quick thing I think I'll add to that. Sorry to interrupt. Google put together study. They've got a group called Unskippable Labs and they study YouTube ads that people don't skip and stuff. But they came up with the statistic that 50 to 80% of your success on YouTube is driven by the ad itself, and then the rest is media bids, budgets, stuff like that. Obviously, it's hard to quantify. Some been made up, but I don't know.

Brett:

So you think that's probably somewhere on Facebook, like 50 to 80% of your success is the ad itself and then the rest is media? Your expert opinion, how would you frame that?

Dylan:

It's a really good question. Now, this is where it gets tricky. It depends on your product and your conversion cycle. If I have a quick product that's pretty cheap, under maybe 30 bucks, then I want my ad just to... It's terrible to say. We always optimize for purchase, but I want my ad to make someone click to go to the website to learn more and then buy the product.

Dylan:

Now, there are other brands we have that are a little bit more high ticket, to where we have to go more in depth on the ads themselves, to more or less... Not seldom in the ad, but just reel them in. Then of course we have other hefty ways of retargeting. But it varies, to be honest with you, because it really depends on that conversion cycle. What was the question again? I'm sorry.

Brett:

What percentage of your success is determined by the ad itself? You said the ad is everything. I was just giving a little quantification there from Google's perspective that they say 50 to 80% of your success is the ad and not the media and the campaign structure and stuff like that.

Dylan:

I would say the same thing.

Brett:

Yeah, yeah, yeah.

Dylan:

I have so many accounts that I even run ads for where the click-through rates were killer, the cost per clicks are killer, but hey, there's a product page issue. So I would say it's probably similar to Google there, to be honest.

Brett:

Yeah. Yeah. Okay, cool. Awesome. Sorry, I derailed you, but ad is everything. What do we need to be thinking about in terms of getting our ads to scale?

Dylan:

What kind of budget you have basically, because, I mean, for the account we have spending 70K a month, I'll dive into, versus somebody spending 10K a month. For the 70K a month, we test 10 new creatives every single week. That could be three or four different creatives, different thumbnails, and then mixing some copy there. But I want 10 different creative variations every single week being tested, basically.

Dylan:

If somebody's spending 10K a month, I would probably say two to four creatives a week to test out, because everything dies. It's like life. Your creative's going to die, so you always need to be testing. Depending on your budget, I always allocate 10% of our budget strictly for testing. That way, I'll have our winning ads, testing ads. I feed our testing ads into our winning ad campaigns, which will go more into the structure side. But it's just having a control versus a variable substance for the most part. So it's case by case there.

Dylan:

But what you need is not crap loads of content, but relevant content. I've gotten myself in trouble here before. It's where I was telling clients, "Send me as much content as possible. The more the merrier," when in reality, that wasn't really the case, to where I just had a crap load of content to really go through and it wasn't the most relevant. So I had to take a step back and rephrase everything I was pitching to clients more or less and be like, "Cool, we want a lot of constant, but it has to be relevant to the angle of the product and the audience themselves."

Dylan:

It can't just be, "Hey, we got 10 different images here. They're all the same. One's black and white, one's colored. One's got a red button. One's got a green button." I want different angles there in different actual creatives where it's not just a color change, and I want to see how it impacts there. That's probably the biggest piece of it, is actually properly testing.

Dylan:

I always do this down rabbit holes, but I love creative testing campaigns versus control campaigns. Our control campaigns, they have all of our winning creatives in there basically. Those take up probably 70, 80% of the budget because I have retargeting, creative testing as well. But I like to have two or three control campaigns, which I just scale up the budget with. I don't even touch the budget, basically.

Dylan:

Then for the other campaigns, it's simple there to where I'll have a campaign for each creative test. Maybe it's every single week, maybe it's every single day, to where we just do broad targeting tests, two different creatives per ad sets, maybe three, to gauge what works best there. After it's spent to statistically relevant amounts, it's gotten some sales, we'll then bring our creative testing ads into our control campaign, because the control campaign, it'll die off at some point, just because the ads get creative fatigue. So this will be swap it out there.

Dylan:

But it's very important to keep those separate, because there's no reason to... If it ain't broke, don't fix it. So I would say it's more of how you're structuring these creatives versus throwing an abundance out there and seeing what sticks, because another point of this is... And I had a call about this earlier, but with one of my clients, is we had two ads. We were testing them both. One was getting really good sales. It had like maybe 20 sales and a terrible click-through rate, a terrible cost per click, but it was profitable.

Dylan:

The other ad we had wasn't profitable, maybe only had three or four sales, but it had a way better click-through rate and cost per click. Now, in Facebook's eyes, it was pushing more budget to the crappy ad because it had better front end metrics when that wasn't the case. So you had to go micro -

Brett:

Because that's what Facebook looks at, right? They're measuring more of the engagement, depending on the goal you get of campaign. But-

Dylan:

Spot on. Sometimes Facebook's not always right, and I'm sure it's the same with Google and YouTube.

Brett:

Yep.

Dylan:

But it's good to have some spend thresholds and actual goals to say, "Hey, I'm not touching this until we get 10,000 impressions," to gauge if it's relevant or not. Eight to 10,000 impressions is our sweet spot to gauge, does this work or not, for the most part.

Brett:

You're running an ad almost regardless of performance in terms of generating sales to about eight to 10,000 impressions to really give it time to show what it's going to do.

Dylan:

Yeah. That can range anywhere from probably 250 bucks to 500 bucks per actual creative, to tests.

Brett:

Yeah. Yeah. Totally makes sense. Okay.

Dylan:

If it's a lower price product like for a cosmetic brand, AOV is 40, 50 bucks, that's perfect. Now, for the other brand I'm spilling right now, our CPA goal's $140, which is a lot more than hoping for a $20 CPA. For them, I'd simply give them a lot more time. I look at our creative differently versus impressions to gauge... Our goal is $140 CPA. I multiply that by three or four. And if we don't have a sale by that spend, I'll shut it off completely, because I know it's a little bit pricier. It's going to take a little bit longer. So I like to give it a little bit more lead time, I should say.

Brett:

Makes sense. We're talking about, and depending on budget, and it does make sense that the number of creatives you need is somewhat dependent on your budget because more impressions, the more you spend on an ad, that the quicker it's going to potentially burn out. How do you approach that though? How do you approach, man, that 10 new ideas a week, 10 brand new ideas, or is it 10 variations? When you work with a client, where do you start, and how do you set up this testing structure, and what are you thinking about in terms of the creative part of the ads?

Dylan:

Yeah. Luckily, I have a better team now to help me align this because it was getting messy with folders of hundreds of assets. I had my team helping me out to where he'll find five of his data creatives, he'll match those up. Then I have a copywriter who writes 10 pieces of copy every single day. They actually mix and match these together and said, "Hey, here's for this week, here's for this week." And that's been the biggest game changer because I hate saying it, but I mean, I didn't have accountability. So maybe a week, I didn't want to do it, unfortunately, but now I'm sticking to my guns there. So it helps us -

Brett:

you don't feel inspired or something, and so you just don't get the headlines written and... Yeah. Yeah. Makes-

Dylan:

Exactly. But you need to have some sort of framework. I don't keep track of tests in an Excel sheet, but that probably would be helpful. But all of our creatives are so different in different angles where I can gauge. But if I were to hand over all of our work to another agency, they would have no idea. But I'd be able to give them a layout of what's working right now. If I get a new brand or account, it depends if they're established or not.

Dylan:

If they're established, they'll typically have a creative team in-house where I can work with them hand in hand. Also, in them, I have a drive, about 500 ads that I've made with other brands and I'll be like, "Cool, here are the best converting ads. We can take any of these, replicate them, use our product, et cetera, et cetera." That's one good way, while also...

Brett:

Love that.

Dylan:

Oh yeah. If they're already doing good, I'll reuse their ads. I mean, there's no reason to reinvent the wheel. I'll get traction with their ads, better structure, get better profitability. And then I'd incorporate my ideas to where I'll be scrolling inspiration ideas. I'm never like, "Hey, we need three more ads that convert." I'll send them actual examples like, "Yo, I saw this one. Let's totally test this one out."

Dylan:

They really don't come up with too much, to where I usually provide the inspiration there to an extent. But they usually have some assets to get the ball rolling.

Brett:

Makes sense.

Dylan:

Now, if they're brand spanking new, that's a whole nother ball game. All refer them to Promo or Billo. It's where we can send a product, get a free influencer video for 60 bucks for something. I kind of-

Brett:

What were those resources you mentioned, and are those good for a brand that has a little traction too? Or are they just mainly good for startups?

Dylan:

I think they're both killer for either, to be honest, and they're really cost-effective. Promo is stock video footage. You can add overlay tag. It's pretty cheap too. I wish I used it more, but I just have a lifetime membership, so I'm stuck with it. That's a great option there. But then Billo, B-I-L-L-O, I think it's dot app, I would jump on this train. We're testing two of their creatives right now and it's working really well. The reason I say that is user-generated content, where it's at, it's different for YouTube probably-

Brett:

Sure.

Dylan:

But people love seeing a guy like you and I on an ad versus, shit, Tom Cruise. I mean, it's more relevant to them. User-generated content is where I think the platform's going. So you don't always need to have professional footage. I mean, on our podcast, we had Truff Hot Sauce. We had a 20K video versus a free video. The paid video, substantially when it comes to actual sales and whatnot. So you don't always need to have professional quality stuff, as long as it's relevant. You can just do iPhones-

Brett:

Billo is going to allow you get user-generated content?

Dylan:

Exactly. You send a product to somebody, they record it for 60 bucks, and boom, it's usable for ads.

Brett:

Nice. Yeah. We see, on the YouTube side, we talked about this one when you interviewed me, but you can still use user-generated content. You just can't use one 15-second UGC video by itself. You need to do a UGC mashup or a UGC mixed into a slightly higher production value video. So it does look different, but yeah, I love that resource. I'd never heard of it before. Yeah, we talk to clients all the time. You need good UGC.

Dylan:

It's nice. Yeah. Because, I mean, creatives, it's what moves the needle. I mean, a good way to put this, and I talked about this a little bit earlier on a separate podcast, but you don't always need new creative. It could be new angles, to where we have a sleep product. I think I may have talked about this on our podcast together, but what we're currently doing now is, hey, fall asleep faster. Boom, that angle's hidden. People love it. People have so much trouble falling asleep.

Dylan:

Now that's going to hit a cap. At 3K a day, we really can't scale past that. So what we did, exact same creative, but two new angles. Angle one is fall asleep and stay asleep and no more tossing and turning. That's pretty scalable too. Exact same audience, different subsection within the audience, essentially. The third angle is tired of getting up in the middle of night to go pee. That's a fricking huge one. So rather than us trying to get innovative and have different crazy creatives, the creative tests for that specific week, we're just testing different copy angles.

Dylan:

I'll be honest, when it comes to creative tests, I picture creative as more of the ad itself versus the static image or just video, to where it sometimes is the copy side of things. That's a great example of diversifying the different angles with the existing and creative we have that's already working pretty well.

Brett:

Yeah. And then, so first of all, love those headlines, those, really directed at a problem-solution type of structure. And so, that's just a proven winner as well. That's always worked in advertisement. Problem-solution has always worked. I love that, and this is something important to remember, is that sometimes you get these audiences that convert. But there are subsets of those audiences where one angle really works better than another. And if you're not testing and not properly testing, you don't know that.

Brett:

Sometimes you may have, oh, hey, the fall asleep faster like, "That's working. Let's just do that." Well, but if you hadn't tested the you're already tired of getting up in the middle of night to go the bathroom, then you wouldn't know that, hey, actually, there's a subset that that converts a lot better for. So yeah, really thoughtful.

Dylan:

Yeah. I mean, what's working best is broad targeting. I'm not going in for sleep interests or snoring interests. While those do work for quick wins, I don't think they're scalable and consistent, just depending on how Facebook looks at it or even we look at it. But I love having three or four active ads per audience, and I'll throw in different angles there because depending on who's clicking on the ad and converting, Facebook knows that.

Dylan:

I mean, somebody who clicks on the one from peeing in the middle of the night, to having tossing and turning, those are complete different people. So Facebook will find people similar to them based off those ads. So it's not only optimizing at the campaign ad set level. It's also the ad level, depending on who's clicking on it.

Brett:

Yep. That's awesome. Let's talk a little bit about campaign structure then. You alluded to a couple of things a minute ago, that I want to dive into. You talked about using 10% of your budget for testing and 60 to 70%, I think you said, to controls, and you've got remarketing in there. Break that down a little bit. I know every client's going to be a little bit different, and when you see results, you're going to push or shift or whatever. But what does that budget breakdown typically look like?

Dylan:

Yeah. Basically, if we're spending a thousand bucks a day, 30K a month, I would... Trying to think what those ratios are. It's a shitty one. We'll say a hundred K a month, basically, to make it easier. So if we're spending-

Brett:

Yeah. It's way easier to do percentages when you're based on a hundred of something. Yeah.

Dylan:

I know. I was like, "Why would I pick 30K?" But yeah. If we're spending 100K a month, I'll easily allocate 10K of that to testing, and those testing campaigns, those maybe a hundred bucks a day, and I can have multiples of those. So it's pretty snazzy there to where you have enough wiggle room to... Because if I'm spending a hundred bucks a day, that's 3K a month. I could have three or four hefty tests with that basically.

Dylan:

That's typically my sweet spot. Now, with the retargeting, I'll push 20% of my overall budget to that. We've got a hundred K. We took 10K for testing. Let's take another 20K out for retargeting. This depends on the conversion cycle, of course, and how much volume you are bringing for your colder audiences, because I do have one account where we only spend 10% for retargeting just because anything more will break it pretty much. So it's case by case. But I think a good rule of thumb is 20% of your overall spend. Then, of course, the other 70%, I would say all for cold audiences.

Brett:

Yeah. Very similar when we run YouTube as well. Then the re-marketing could vary if it's a long sales cycle versus couple of days sales cycle. Then those re-marketing percentages could shift a little bit. So yeah, that's really cool. We got the budget breakdown. Then what are you doing now in terms of campaigns structure? What would you add to that, now that we've got our budget parameters laid out?

Dylan:

Yeah. I typically have two or three control campaigns, and one will be... I'll put one in the ad set in it, to be honest. I'll test out one, which is wide open, maybe age breakdown. If it's no one buys under 25, I'll just make it 25, 65 plus. I give the algorithm full room to just do its thing. It's really just creative at that game. We just input every other week, depending on what hits for the creative tests. The control campaigns, I don't touch ever. The only thing I ever do is bump the budget up 20% or add in some fresh creative from our creative testing campaign that's proven itself.

Dylan:

With those control campaigns, they have really big audiences. As mentioned, we'll go broad with literally zero. So it'll be 70 million plus. We'll do 10% look-like audiences. Those are really, really fat. Those are like 20 or 30 million people. Then we'll use an interest-based campaign which could have one or maybe two or even three ad sets with interest stacked, based off what we're looking at. But those are all 30 million plus audience size as well.

Dylan:

So the bigger the audience size, the more consistent and scalable it is from what we've noticed. We don't even really touch those as mentioned, unless we're doing 20% budget increments daily, which I love to do daily. Anything more, it usually breaks it to an extent for a couple of minutes.

Brett:

So maybe scaling up budget as much as 20% a day. If you go faster than that, you're probably going to break something.

Dylan:

That's per campaign. If I have three top of funnel control campaigns at 500 bucks a day each, I could easily add on an extra 300 bucks that day. If you're doing that every single day, that you can scale pretty quick.

Brett:

Yeah, yeah, yeah. For sure. That compounds pretty fast.

Dylan:

Exactly. I mean, a good example. I had one account I launched last July. Month one, they spent 5K. Month two, they spent 10K. Then 15K, then 18, 24, 42K. We got the ad account shut down, only spent 40K the next month. But then this past February, spent 70K and then we're planning to spend 140K this month. That's how we're scaling it up. I can make those bigger increments hinges now that we're spending 70K plus a month. But it's a little bit more risky with the smaller spends because Facebook fluctuates so much.

Dylan:

That worked really well for us. So if you are looking to find a scalable model, and this is a subscription, by the way, so it's not like a three X or anything. It's like a 1.2X, just because -

Brett:

That's all you need when you've got long lifetime value and good recurring monthly revenue.

Dylan:

Exactly. That's how we're scaling up that account. The biggest way we're doing it is I'm straight up duplicating every campaign and just adding in new creative, basically. I'll just have creative tests week three one, and then that will just run for the week. Sometimes it works, sometimes it doesn't. If it's working, I'll scale that baby up. But I started out at a hundred bucks a day, and still go to 120, then 140, then 160, and then all the way to 200. Then I go to 240, 280, and vice versa there.

Dylan:

And so, you can't scale it up somewhat fast. But if I just get a little thought that this could be a really good one, I will start testing. But it's at 500 bucks a day, just to see what happens so it gets that data faster. Then I'll shut it off in two days if it doesn't work. So it depends on how much wiggle room I really have.

Brett:

Sure. Totally makes sense. When you encounter a prospect or a client that's plateaued or stalled a little bit, what are some of the common mistakes, some of the common reasons that you find that, hey, these are the reasons why this account is not scaling like it should be?

Dylan:

I would say retargeting and exclusions. The retargeting should always do way better than your top of funnel. So, I mean, whenever I see a top-of-funnel campaign getting a four or five X, I'm like, "They're not excluding." I can almost guarantee that.

Brett:

Yeah. The funnel campaign is actually there's a section of it that's remarketing.

Dylan:

I see that a lot.

Brett:

I do too on the YouTube side. Yeah.

Dylan:

That's a big one. I think even ad formats. The amount of accounts I audit to where they're only using carousels, only using videos or only static images, I'm like, "You're throwing all your eggs in one basket, praying for the best," to where I could have the same copy, which I love to do, and I'll have that same copy with a video static and a carousel ad. But these different ad formats have different placements in the ad auction. So sometimes adding in a different creative format could lower your CPA like 10%. It's fricking bananas.

Brett:

Really? Do you have any rules of thumb for, "Okay. We're running this percentage of carousel ads, or this percentage of static ads, this percentage of video," or it's just all dependent on what's working?

Dylan:

It's depending on what's working, I would say 5% carousel ads though, 30% video, and the remainder being static ads, because I'm supposed to see-

Brett:

Yeah. I was going to see, and I'm not on Facebook, a ton. Not always a fun place to hang out these days. Great place for advertisers though. Static... I mean, I'm sorry, carousel ads, I don't see them that much anymore, like re-marketing mainly. But not beyond that necessarily. Okay. Super interesting.

Dylan:

Good little case study for that is I literally audited somebody last week and all they're running are carousel ads for their food. I just straight up said, "Make a slideshow using the same images," and that lowered their CPA 15%. And it took two days. So that was a quick win. Didn't change anything. Just took those images, turn into slideshow, and boom. Now it's converting like crazy.

Brett:

Nice. So slideshow. That's the type of thing that doesn't work on YouTube at all. But so, when you do that, are you using something like Animoto or another tool like that, just create a slideshow or...

Dylan:

I don't do it very often because I don't like the Facebook creative tools. But yeah, you would just select the images and you can make a slideshow with it, within Facebook natively. So they didn't even have an editor or anything, and it's like, "Hey, just take those five images in the carousel and put them in here." It did it for them basically.

Brett:

Nice, nice. Very interesting.

Dylan:

It's cool. But ad formats, exclusions, and I wouldn't even say too many campaigns.

Brett:

Okay.

Dylan:

Facebook pushes 50 conversions a week. I think that's blasphemy. I don't believe it personally. But I do think you can spread yourself too thin to where those cosmetic-

Brett:

Facebook, yeah. Can you explain that really quickly? They push 50 conversions a week. What do you mean by that?

Dylan:

50 sales. If you have a campaign, if want it to get-

Brett:

At the campaign level, so a campaign needs to be doing 50 sales a week?

Dylan:

Exactly, when using campaign budget optimization. That's when you set your budget at the campaign level. But if you're setting it at the ad set level, the ads, it has to get 50 conversions a week. A conversion can be anything in Facebook size, depending on what you're optimizing for. But of course purchases where it's at.

Brett:

Interrupt and talk about that for a minute. So 50 conversions, are you saying you actually think it could be less than 50 and does well or ... Okay. Got it. Yeah.

Dylan:

Yeah. We have like $20,000 products and we only get like three or four of those a month.

Brett:

Yeah.

Dylan:

I mean, the learning phase is a myth, in my opinion. But with those 50 conversions, where I was going with that, is if you have 20 campaigns and they're all getting five conversions, it's going to take forever to get out of that learning phase and longer to optimize, which isn't that big of a deal. But if you ended up having three campaigns instead of 50, where they had 50 conversions in each one, you're going to get a way better bang for your buck. Facebook will optimize faster.

Dylan:

It's basically, if I had some campaigns that's 10 bucks a day, or I could have two campaigns at 50 bucks a day. The 50 bucks a day ones are going to do way better any day of the week, just because they're getting data faster. You can optimize faster, make decisions faster, versus the others.

Brett:

Yeah. I agree. Then sometimes having fewer campaigns and you're really pushing and scaling, it's just easier to manage and easier to pull levers on. I think there's a lot of benefits that go into that. That's awesome. All right. Let's pivot a little bit. Let's talk about everybody's favorite topic, or depending on when you're listening to this, it maybe the worst topic that you could ever have imagined, or it could be like, "Oh, this is no big deal." I don't know. Let's talk about iOS 14. What are you telling clients now related to iOS 14? How are you preparing? Let's walk through that a little bit.

Dylan:

I changed up all my pricing because of that, basically. What we're seeing on Facebook, I'm only seeing this in one account right now, but I mean, we're getting a hundred sales a day, and we used to show 85 to 90 sales attributed to Facebook, but now we're only showing 45 to 50, if 50. So it's dropped about 40, 50% in tracking for that specific client when everything is business as usual. So I don't really have an explanation for that except this, but there's no way to gauge if that's it or not. So it makes it tricky.

Dylan:

But what we're telling all of our clients is, hey, we're going to be looking at Google Analytics a lot more now, to look at seven-day windows and day-to-day spend in revenue versus-

Brett:

Are you guys using UTMs to track, or you're just not going to-

Dylan:

Exactly.

Brett:

Okay. Yeah.

Dylan:

We went way harder with UTMs where we implemented it for everybody, basically, just because Facebook's not showing the true monetary value of most things. So rather than even doing reporting in Facebook, we do it all through Google Analytics. The other part of this is we're probably going to see less results than we typically do because Facebook looks at 28-day click one day view versus seven-day click one day view.

Dylan:

Now, that's not much. It could result in a few extra sales. A lot of people don't convert too quick. To combat this, shouts out to Nick Shackelford, this is two for the day for you.

Brett:

Yeah. That guy's awesome, man. He and I have spoken at the same event, some events. Nick Shackelford, real deal. I believe, I believe a good soccer player too. So anyway, for what that's worth.

Dylan:

He's a goalie, I think, because I'm a goalie, and I think-

Brett:

Oh, is that right? Okay. Okay. Oh yeah, yeah. But you're a hockey goalie. I'm getting totally sidetracked here. My daughter's playing lacrosse. None of these sports I've ever played, but lacrosse, soccer, hockey. I was a basketball guy. I always had that. But fascinated by these other sports that I have less experience with.

Dylan:

They're fun. But yeah. Nick Shackelford, I'm meeting him in a couple of weeks coming to Austin for Geek Out, shouts out, Geek Out. But yeah, he created a 28-day click multiplier. Essentially, I would go in through all of our ad accounts, look at six to eight months of data, gauge what's our revenue on a one-day click window, seven-day click, 28-day click? And that's for cold and warm audiences. So you're basically looking at past data to gauge, if I had a 2X on a seven-day click window, what would I be on a 28-day click?

Dylan:

You would have to multiply this by 1.23, for example. So we have all those figures of what it could be. But what I've actually found is that the last year has just been a fricking mess, so the COVID, the elections, the freeze that hit Texas. I noticed sales were down 40 to 60% in Texas, and some of the weeks.

Brett:

Yeah, yeah, yeah, yeah. No away around that.

Dylan:

So there are a lot of other variables involved to make it trickier to gauge if that's really the case there. But the 28-day click multiplier, that's one part of it. But I think the biggest thing is we're looking at more blended metrics, ecosystem metrics, with UTM codes, to gauge, hey, Snapchat's doing this, Facebook's doing this. There's probably going to be some overlap here, but not too much.

Dylan:

So we just changed our whole reporting model to stick with percent of ad spend versus return on ad spend and CPA because we just don't have that info like we used to. I'll probably go to it in the future once all the kinks get worked out. But we haven't seen much change on our end. I usually always look at stuff on a one-day click and seven-day click window. I mean, for those accounts that have that, nothing's changed pretty much.

Dylan:

I think the hardest part is for how I'm relaying it to clients, is having to have them get their domain verified, set up specific pixel events and stuff to where it's a pain in the ass. So it needs to be done in order for the Facebook pixel to attract this stuff. But Facebook didn't make it easy. I think the hardest part of all of this is the grunt work I have to deliver to my clients to be like, "Hey, you just put this [inaudible 00:35:50] tag code in your website somewhere. I don't know where, but it's supposed to go there."

Dylan:

I think the implementation side is probably the hardest part, but we were just proactive. We had a lot of resources involved and had calls with all of our clients to give them expectations, to play it safe to say we're proactive. But at the end of the day, the big stuff hasn't even been released yet. I mean, I think it's just the beginning.

Brett:

It totally is. And then, we're doing a similar thing. We're sending out news information from Google to our clients and helping them get ready. We're not seeing any major changes yet, but I really like a few things you talked about there, one, blended metrics. We're going to have to get more creative about how we track and attribute and how we look at overall sales lift because, yeah, there's going to be some cases where Facebook maybe isn't given all the credit that it deserves, or YouTube is not given all the credit it deserves, but we need to be able to get some blended metrics to get a better idea.

Brett:

I love that 28-day click multiplier. We do something similar, but reverse where we're looking at like, "Hey, based on a one-day CPA, here's what we expect that CPA to be in seven days or in 30 days." So it's similar thing like, "Hey, if the CPA today is a hundred, well, that's cool because we're expecting it to be 50 by the time we get to 14, 15 days," based on what the historical data and stuff.

Dylan:

The other cool part with this is I have access to every channels marketing efforts now. So I get all the reports from the Google Teams. If I start noticing some discrepancies, I don't like throwing people under the bus. But when someone's not transparent and unethical about it, I have no problem throwing them under the bus there to where... I've had it happen twice where they were totally looking at the wrong KPIs, and turns out, they burned over 70K in cash and thought they were profitable. They weren't.

Dylan:

I was like, "Dude, they have been giving you the complete wrong figures. Let me do this for you. I'll take it over." It got me some clients. It's helped out in a way there, but I like seeing other people's marketing efforts. I mean-

Brett:

Yep. Yep.

Dylan:

It's interesting.

Brett:

Sure. Yeah. The blended metrics and digging in and yessing all the channels tied together, that's super important. I think it's actually going to reinforce one of the first points you made, which is the ad is everything. As privacy issues become tighter and there's less transparency or less ability to track, the ads are just going to become more and more important, like what you say, how you say it, how you deliver that ad is going to be more and more important. So get it right now. That's for sure.

Dylan:

Oh yeah. Something I spoke about in another podcast is I didn't know this would affect our ads, but what words you're using. If you're using, "Hey, buy this today," you could be like, "Hey, grab goodies today," or something. So specific-

Brett:

"Buy this today," sounds salesy and pushy, but "Get your goodies today," sounds fun.

Dylan:

Exactly.

Brett:

Like playing around with that. Yeah

Dylan:

But yeah, it's an auction. If a million ads with "Buy this today" versus "Get your goodies today," you could convert better at "Get your goodies today". What I've noticed is whenever we're using different lingo, our CPMs are about 10 to 15% cheaper, which on a massive scale, that's fricking huge.

Brett:

That totally impacts the rest of the math down the line. So if you're worried about RoAS and CPA, which you should, impacting your CPM can definitely impact all the rest of it because that's the leading metric there, leading versus lagging. Awesome. Dylan, this has been fantastic. We are officially running up against time here, so want to wrap up a little bit.

Brett:

But two things. One, plug the podcast. Why do you enjoy doing the podcast? If you have any recent takeaways from the podcast, and we've already shared some, so no worries if nothing else. But talk about the podcast a little bit. And then, I want you to tell people about your company and how they can learn more about you there.

Dylan:

Yeah. For the podcast, Rich Ad Poor Ad, check it out. I think you just go to Google and type in Rich Ad Poor Ad. It's all under FunnelDashes network, essentially. We have a lot of great guests who spend 50K a day, a dollar a day, organic affiliate marketers. We have brand owners talk about their brand directly, agency owners, media buyers. We have literally a bit of everything on there and it's not from beginners, Billie, Jean, Neil Patel, for, again, Brett Curry.

Dylan:

We have some legends on our podcast. I mean, there are a ton of actionable things, because we talk about what's working, what's something that crashed and burned, and some financial tip. So it's 20 or 30 minutes of good, valuable golden nuggets to be dropped. As mentioned, I do it just to network. We're probably going to monetize it. I didn't think I would ever say that, but I'm doing it strictly meet people like Brett and just level up my personal game as well.

Brett:

Sweet. Love it. Love it. So yeah, check it out, Rich Ad Poor Ad. Then your company, Koality Media, how can people learn more about your company? Any resources? Anything you want to plug there?

Dylan:

I would say find me on Twitter at marketerdylan or Facebook, you're going to search Dylan Carpenter. The website is called Koality Media, K-O-A-L-I-T-Y, media.co. I had an intern a free three years ago. I don't use it, but there may be some goodies on there.

Brett:

Hey, that's often the sign of the like, hey, you're just a practitioner. You're just doing it, man. You're running the ads. You don't care about your own website. You're out there making it happen.

Dylan:

Exactly. Yeah, if you have questions, I'm an open book. Ask me anything, but not too crazy, hopefully. But yeah. Find me on Twitter or Facebook and I love having conversations.

Brett:

Sweet. All right, man. Dylan Carpenter, ladies and gentlemen, rocking it. Thanks for taking the time. This has been a lot of fun. Really excited to see where everything goes with iOS 14 and all these changes. But you dropped some amazing golden nuggets that are going to help people no matter what happens here in the future. So really appreciate it, man.

Dylan:

Nice. Appreciate it, man. I loved it. Thanks for having me on.

Brett:

Absolutely. As always, we appreciate you tuning in. Hey, we'd love your feedback. Let us know what you'd like to hear more of, what you'd like to hear less of. If you have not done so, and you feel so inclined, we'd love that review on iTunes. With that, until next time, thank you for listening.

‍

Are you ready to crack the YouTube ads code?  Ready to learn how to win now and into the future even as privacy issues are causing media buyers to pull their hair out?

Here’s the Audio from a recent, wildly popular webinar I presented at.  We had just over 2,000 people attend to hear our Winning Formula for Scale for YouTube ads for eCommerce.

This presentation is fast-paced and full of practical tips and examples.  Here are 3 reasons to listen:

Learn how top eComm brands are profitably spending $500k per month on YouTube ads.  Many were spending $0 on Google ads just a few months or years ago.
Diversity.  In a world of tracking issues, algo updates and constant uncertainty - you need to diversify your customer acquisition channels.
Understand how creative, campaign and audience strategies work hand-in-hand to deliver stellar results.

‍

Brett Curry

Via LinkedIn

Via Facebook

Via Twitter

Via Instagram

Via YouTube

Mentioned in this episode: 

Kurt Elster

Ethercycle

Smart Marketer

Molly Pittman

Ezra Firestone

John Grimshaw

eCommerceFuel

Andrew Youderian

Spotlight Social Advertising

Wavebreak

Conversion Crimes

BOOM! by Cindy Joseph

Grammarly

Volvo

Harmon Brothers

Poo-Pourri

William Painter Sunglasses

YouTube Ads Guide

‍

Episode Transcript:

Brett:

Hey, what's up? Brett Curry here. Welcome to this virtual event, YouTube Ads for E-commerce: The Winning Formula for Scale. I am absolutely delighted that you chose to spend a couple of hours with us, and I'm excited because I've seen the power of YouTube for good brands. And now is not the time to be dependent on just one traffic source. Now's the time to diversify. And if I may be so bold, you need YouTube ads to grow your business.

Brett:

And whether you're just starting on YouTube ads, you're just considering it, or maybe you're running YouTube ads but you want to step your game up, our commitment to you is we want to deliver the goods with this event. We want this to be practical, helpful, actionable, and hopefully we can have a little bit of fun along the way. Hey, I know what a commitment it is to join a virtual event. And so I want to keep this fast paced and make it well worth your time.

Brett:

So with that, I want to dive right in and get to the good stuff. This episode of the eCommerce Evolution Podcast is brought to you by OMG Commerce Resources. That's right. Here at OMG Commerce, we want to help make sure you're educated and in the know to capitalize on the latest tips, tricks, and strategies to help you grow your e-commerce business.

Brett:

So if you go to omgcommerce.com and under resources, click on guides, we have some cutting-edge free information for you on things like how to dominate with Amazon DSP ads or how to use Amazon sponsored brand video ads and how to craft the perfect ad. We have several guides on how to capitalize on YouTube ads, from creating the perfect ad to knowing when you're ready to scale. Plus there's the newly updated Google shopping guide plus more. Check it all out at omgcommerce.com and click on guides under resources. And now, back to the show.

Brett:

So we're really looking at three steps. This is a three-step formula, this winning formula for YouTube ads. And just to break it down really quickly and then we're going to dive into each of these. It comes down to creative strategy, and then audience strategy, and then campaign strategy. And you need all three of these and you need all three of these working in harmony together and that's when you get fantastic results.

Brett:

And we've done this dozens of times now, taken brands from zero on YouTube ads up to a thousand a day, 10,000 a day, 20,000 a day, all while hitting a CPA target. And that's what I want to show you how to do today in this event. Now, you might be asking, why are we doing this event? Well, first of all, we want to help people. We are an agency. So we run these campaigns for clients. We also enjoy helping people.

Brett:

And this kind of came from an in-person event, if you remember what those were like, just before the initial lockdown. So we were invited to the YouTube LA office. This was me speaking on stage at the YouTube LA office to a packed house of e-commerce brands and laying out here's how you grow on YouTube if you're an e-commerce brand. Quite a bit has changed since then. A lot has changed favorably for e-commerce, but a lot of shifted with YouTube.

Brett:

So this is an updated presentation. That event went so well, we had people saying, "All right, when are you doing your next event? Where's the next event going to be? We got to attend." So this is the next event, right? We still can't meet in person fully and so we're doing this event virtually. But this is part two to that event. It's updated, it's expanded, it's deeper, and it fits now for where we are with e-commerce and YouTube ads right now.

Brett:

So just a little bit about OMG Commerce and we're diving right in to the good stuff. So we are an e-commerce agency. We focus on Google ads, YouTube ads, and Amazon ads. I'm very proud of our team. We've hit the Inc 5,000 list. Now, the last three years in a row, we've made Inc Best Workplaces and Local Best Workplaces in one of our main cities where we work. We've got about 50 on our team, so we're expanding and growing. And then we have both the media side, so the campaign structure side, and the creative side in our agencies. We can help with both.

Brett:

And we are one of the top spenders on YouTube ads. So everything I lay out here, not based on theory, not based on ideas, it's based on stuff we're actually doing for clients on a daily basis. And so you can rest assured that this stuff actually works. So let's talk about YouTube just really briefly and set the stage. I'm talking like 30 seconds here then we're diving into the content.

Brett:

So 2 billion plus users. I started speaking about YouTube ads probably four or five years ago now. And at that time, it was not even a billion users. So YouTube has experienced tremendous growth. It is the world's second largest search engine. And it's not a search engine. It's a video sharing site, a social media site. But more searches are conducted every day on YouTube than on any search engine not named Google.

Brett:

It's also the world's second most visited site, again, right behind Google. So you want scale, Youtube absolutely has scale. And that's what I want to do. We want to help you scale on YouTube and reach your goals and really expand. Now, what's interesting is adults 26 to 35, 77% of them use YouTube on a regular basis. And 80% of parents of young children. I fit this category. We have a lot of kids at our house. My kids only watch YouTube. That is the social media platform that they want to get on.

Brett:

They love YouTube influencers. They always want to watch YouTube, whether it's on a tablet or on one of our TVs. They want to watch YouTube. And viewers 18 plus on YouTube, 42 minutes per day on the platform. That's huge. According to several studies, that's even a little bit more than what most people spend on Facebook. Now, I'm not going to just stop with YouTube ads because YouTube ads certainly it's super duper important, but you also need to have a good landing page.

Brett:

So I invited my friend, our buddy, Kurt Elster, the man. He runs The Unofficial Shopify Podcast. He also runs an agency called Ethercycle. He has a presentation here during the event, talking about how to optimize for ROAS with better landing pages. I love this presentation. It is absolutely good. It's amazing. And so it's going to be fantastic.

Brett:

Also, you're going hear from Vanessa Carvajal directly from Google. This presentation rocks as well. The ABCDs of creatives for YouTube, all based on research, all based on Google's data, show you exactly how to approach YouTube creatives. And then you're going to hear from our expert panel. We debated on whether we're going to do this or not because, hey, our experts are busy, man.

Brett:

They're out running campaigns, they're getting stuff done on a daily basis. And so, do we want to have them all free up their time to record? And we decided we did, one, because we want to showcase how awesome they are. And two, because they're going to deliver great value to you. But these are six of our best. These are OMG Commerce team members. And so I'm going to grill them with questions, all the burning questions you have about budgets and ads and what to do if things go wrong and all kinds of stuff, and they're going to lay it all out there.

Brett:

They're going to share with you their examples and lessons from their experiences on YouTube ads. Also, a big thank you to our sponsors. We could not have done this without our sponsors. A special thank you to Ethercycle. Kurt Elster, smart marketer, my friend and our friend at the agency Ezra Firestone and Smart Marketer, Molly Pittman, shout out. John Grimshaw, that place is awesome. eCommerceFuel and our buddy Andrew Youderian, thank you as well. And all of our sponsors, Gorgias, Spotlight Social, Wavebreak, Conversion Crimes. Awesome sponsors. Thank you so much.

Brett:

So let's dive in. So let's talk about step number one. Step number one of the formula to scale on YouTube, it's creative strategy. And I got to say, guys, this is the most important step in the formula. If you get this wrong, nothing else matters.If you nail this and do really, really well, you can actually do okay on the other elements and still be all right. But you get this wrong and you are toast.

Brett:

So this is a stat from Google and from a group called the Unskippable Labs. But they say, hey, 50% to 80% of the ROI of a YouTube campaign comes from the ad itself, comes from the creative. We've seen this over and over again, where we're really good with campaign structure. We're really good media buyers. But if you have a junkie ad, it's not going to work, right? Where you take the same structure with a mediocre ad, campaign limps along, you inject the right video and that structure takes off. So super important.

Brett:

Well, we found, and I believe this is the present of digital marketing, it's also the future, and that is the machine, Google's SmartBid algorithm and their AI and machine learning and Facebook's machine learning plus smart humans. That's where it's at. Bringing our creativity and our strategy, business savvy, combining that with AI and ML. And that's where you have a powerful combination.

Brett:

So I want to walk you through six must have elements of a winning YouTube ad, and this will help shape the way you think about creatives. I want to preface this by saying one thing to keep in mind, and there are multiple differences between YouTube ads and Facebook ads, but one is the video has to do all of the heavy lifting on YouTube. There isn't these blocks of copy around the ad like you have on Facebook. It's the video.

Brett:

The video has to do everything. Everything that you need to do to convince someone, the video itself has to do that. Okay. So let's talk about these six elements. The first one, it is the golden thread or your one thing. I went to this copywriting course years and years ago, and they talk about having a golden thread. What's the one thing you want to keep going back to again and again? It's a combination of what you do best and what your audience wants most. And then you highlight that.

Brett:

So let me give you a couple examples. So let's talk BOOM! by Cindy Joseph. Ezra's company, we've been the Google and YouTube ads partner for BOOM for about four or five years and I've seen tremendous success with YouTube. But their one thing is they're pro age. It's look your best, but embrace where you are. It's not anti-aging. Don't try to look like you're 20. No, you are a powerful woman.

Brett:

We want to make you look your absolute best, but embrace this stage in your life, right? Cindy Joseph, the founder, co-founder, silver hair, but absolutely stunningly beautiful. So look good how you are. Don't try to turn back the clock, just look great the way you are. Grammarly. Spelling and grammar errors can sabotage your success. We fix those errors for you automatically as you go.

Brett:

One of the examples I thought of earlier, and we talk about this at the panel, actually. But Volvo used to, and this is an old example, but Volvo would just talk about safety. Always they would go back to safety. These are safe vehicles. That was their one thing. So what is your one thing that should be weaved throughout the video? Number two, the hook. This is super duper important. Those first five seconds, that's magic moment.

Brett:

After the five second mark, the magic skip ad button appears and likely when your ad comes on, someone's hovering. They're hovering over that skip ad button and they're about to press it. And so you've got five seconds to convince them otherwise. You have five seconds to talk them off the ledge and get them to stay and watch your video. And so this is a screenshot, of course, from the Harmon Brothers class. Shout out to the Harmon Brothers.

Brett:

Poo-Pourri, you got get the petite, cute British ladies sitting on a public toilet, in a dress, and she's talking about bathrooms smells. Now, you don't have to use shock and awe and humor, but if it fits your brand and it fits your product, it can work really well. You see her on a toilet, you hear what she says, you're hooked, and you're likely paying attention from there.

Brett:

So the idea is we want to hook the right audience and repel the wrong audience, because there's actually a benefit if the wrong audience skips. If someone who's not going to buy your product anyway, if they skip, that's actually good for you because you don't pay unless someone sticks around for 30 seconds of your video or unless they click through to your ad. So you want unqualified prospects, you want people that are not likely to buy, you want them to skip. Move along, right? We're not going to pay for them anyway.

Brett:

So what else could you hook with? If you're not going to use bathroom humor, which you probably won't want to, what is your biggest benefit? Bring that right to the front. What is the reason someone buys your product? Highlight that right up front. This was the beginning of an ad for a leg bronzer. And so it opens with, "Hey, did you know you could get gorgeous, flawless legs in a matter of seconds?" Big promise, gorgeous legs, matter of seconds. Okay. If this was what I'm wanting, then I'm maybe going to stick around and watch.

Brett:

You could lead with the biggest problem. What's the biggest problem that your product helps overcome? This is actually the opening to the Flex Seal infomercial. It's a pretty great opening. Again, a New Jersey accent, "This repair would cost thousands of dollars to fix." And so it's like, hey, what is the biggest problem? Let's lead with that. Or it could be, what's the biggest question your prospects are asking?

Brett:

We're advertising for a percussive therapy device that has become all the rage over the last couple of years. But we started with a question. This was a question people ask if they're looking to buy this is, "Hey, have you seen one of these devices and wondered, do they actually work? And if they do, why do some cost $600? What's the difference?" So what are the biggest questions someone's asking related to your product and related to your industry? Lead with that.

Brett:

Lead with that question. Let someone know you're speaking directly to them and you're going to answer their questions. Number three, the supporting cast. We don't just have one benefit. There's not just one main benefit. You buy a product, you should focus on one thing, like make the one thing the thing that everybody remembers, but you can have supporting cast.

Brett:

What are the other cool things that support that one benefit and maybe tip the customer over the edge and cause them to say yes? So my buddies at William Painter sunglasses, the glasses are titanium and they're basically unbreakable and they look just cool, man. You wear William Painter sunglasses, it ups your cool factor big time. But they also have the hook. The hook helps you pop bottles and look like a model. And it's just fun. It's an extra thing and it's an added benefit. It's supporting cast. It makes the other stuff come to life and makes you want to say yes.

Brett:

Number four, objection busters. People are watching your videos and they've got their arms folded. They're saying, "Yeah, I don't know. I've seen this before. I've heard this before. And I don't know that I believe him. In fact, I probably don't believe him." I'm from Missouri. Missouri is the show me state. We're very skeptical people, I guess, in Missouri. But it's like, hey, you got to show me before I believe. You need to think like a Missourian as you're building your YouTube ads.

Brett:

But what resistance does your prospect have to buying your product? And you have to overcome those objections. So if you end your video and you haven't addressed properly the big objections in someone's mind, or at least indicated that you will overcome those objections, if they click through to your site, then you're going to really face them severe headwinds. You're going to have some headwinds facing your videos. So people are thinking, "I've seen this before. I've been let down before. I doubt it."

Brett:

You can say things like, "Hey, you may be thinking X, Y, Z. You may be thinking this is too good to be true. You may be thinking this will never work for you, but here's what we found." So address those objections head on. My buddy, Peter Goodwin at Groove Life, awesome rings. I'm wearing one right now. They talk about, hey, it's silicone wedding rings. You're worried it's going to snap, break, you're going to lose it, whatever. No BS, 94-year warranty. Just overcome that objection right out of the gate.

Brett:

Number five, proof. We want some proof that this is going to work. So credentials, testimonials, endorsements, reviews. We want to see these proof elements to make us confident, confident to at least say maybe, maybe I'm going to believe you. But this should be fun. This shouldn't be like a term paper. It shouldn't be like a legal case. It shouldn't read or feel like a term paper. It should be fun.

Brett:

Again, this was Harmon Brothers. But this was Purple Mattress. Goldilocks lowering the 300 pound sheet of glass onto the bed frame and there's raw eggs in between, but the eggs don't break because the mattress supports it. So think fun. Think visual. But we need proof. And then finally, number six, the offer. What is the offer? Why should I say maybe? Why should I say, "Okay, I'm going to look a little bit further?"

Brett:

So what is that offer going to be? You can think of bundles or discounts, especially if you got a product that people consume over and over again, supplement, skincare, beauty products, food. Anything that's consumable, think about bundles or discounts. But also think about, hey, just click here and see it in action. Learn more. See if this is right for you. Let's take that next step. But some kind of offer that's pretty irresistible, but tell someone to take action.

Brett:

If you don't tell someone to take action, guess what? They won't. They'll just keep watching. They'll stick around for the YouTube video they came to watch if you don't tell them to take action, if you don't make it compelling for them to take action. Now, I'm really just scratching the surface here on creative strategy. There's so much more we could talk about. Vanessa from Google is going to talk about creative strategy a little bit more.

Brett:

I also created this resource and I highly recommend you download it. It's totally free. On our website, under resources and guides, this is the top YouTube ad examples and templates. It's like 16, 18, something like that, of our favorite YouTube ads with links to them explaining why they work. So check out this guide. I think it'd be a huge help to you. And then also a serious X-Factor in your videos are testimonials and video testimonies from customers.

Brett:

I'll show you how to get those testimonials that they give us on the guide section of our site, a guide to authentic customer testimonials on video, whether you're remote or in person, eventually we'll be back in person again. But here's how you get them. That's free as well. I highly recommend you get it. Okay. Step two, audience strategy. Who are we speaking to? So the creative is super important.

Brett:

But let's face it, if you've got a brilliant video and you present it to the wrong people, you've got this boom video that's aimed at it's a pro age cosmetic and you're targeting teenage girls, they're not going to buy. The message doesn't line up. So audience strategy is really, really important. And audience strategy is also different. It's different on YouTube than it is on other platforms. And I think in a lot of ways, it's better on YouTube.

Brett:

You've got more options on YouTube. Really, the possible audience combinations are limitless on YouTube. So let's dive in. So I do recommend you start with remarketing. You need that foundation of remarketing. If you want to fill in a lot of people at the top of the funnel, you want to hit a broad, cold prospecting audience, it needs some remarketing there to help seal the deal, to help close the deal and get someone to take action.

Brett:

Because when you're reaching someone at top of the funnel, it's probably the first time they've ever heard of your brand. The first time they've ever seen your product. And so the likelihood is they're not going to buy it right then, but you want to get them back through your remarketing efforts. So I highly recommend you set up remarketing audiences first as a foundation.

Brett:

But then you want to go beyond that. That's what this event is about, it's about scaling on YouTube. So we recommend some of your first prospecting audiences to scale are intent-based audiences. So what does that mean? What does it mean by intent-based audiences? Well, YouTube really has the ability to tackle and target intent-based audiences like no other platform. And here's what Google has seen. So when you target an intent-based audience versus just a demographic based targeting, 40% higher purchase intent.

Brett:

Now, that 40%, that's going to maybe translate into hitting your CPA goals versus not hitting your CPA goals. So starting with custom intent or with intent-based audiences is huge. So what do these audiences look like? Really, two main audiences. The first is custom intent, based on someone's YouTube and/or Google search behavior. The second is keyword. Keyword is actually more of a contextual targeting, but at least indicates what people are watching on YouTube.

Brett:

And that's going to indicate, hey, if they're watching videos about this, then we know what they're interested in. We know what they're researching, we know what they're planning, we know what they're trying to do. And so now's the perfect time to sneak in our message and hopefully get them to click to our site and eventually become a customer. So customers intent. This really is the precision of search with the power of video.

Brett:

One thing that's really increased in recent years is people shopping on YouTube, people looking for product reviews on YouTube, or hey, I'm looking for best fill in the blank, best noise canceling headphones. That really shot up in the midst of the lockdowns and things like that. But best noise canceling headphones, best hypoallergenic pillow, best whatever. People are searching on YouTube. They want to see reviews. They want to see unboxed things. They want to see influencer content. They want to know what to buy. People are shopping on YouTube. So looking at keywords very, very powerful.

Brett:

So our advice is start with intent-based audiences. Start with people where you know what they're in the market for, what they're shopping for, what they're researching for. Start there and then go broad. And YouTube gives us all kinds of examples, all kinds of ways to go broad. They have kind of some off-the-shelf audiences. They'll auto create some audiences for you after you start getting conversions, you start to some data in your account.

Brett:

And then you can continue to build some other custom audiences. There's a type of audience called custom affinity, which is sort of like a lookalike audience. You give Google some inputs and then Google's going to say, "Ah, we know kind of who you're looking for. Here is a lookalike audience kind of based on those inputs." Once you have those intent-based audiences and you start to get conversions, that's when you can begin to open things up a little bit and go broad and really hopefully start getting some volume.

Brett:

All right. Let's spend some time on campaign strategy. So this is where we're putting structure around everything, right? We know we got to say the right thing. We got to be compelling. We know we have to reach the right person. But what's the structure we put around this thing so that we're hitting our targets, and so this makes financial sense, and so we're building our bottom line, and so we're actually growing?

Brett:

And so this is where we're looking at leveraging smart bidding. So again, we're using the machine. We've got our smart humans. We've got our machines learning and AI that we're leveraging. And it really comes down to three things: campaign structure, bids and budgets, and then measuring and optimizing. You do these three things and price is part of your campaign strategy, good things are going to happen.

Brett:

So we're going to kind of break that down. One thing I will mention, it is required. It's not a maybe, it's not a this was better. No. It's a must. It's a requirement. You need to use the Google Ads conversion code, just like on Facebook you use the Facebook Pixel. You're not using Google Analytics for Facebook. You're not using Google Analytics for YouTube either. Now, you may cross-reference with Google Analytics. You may look at some of the user metrics and on-site engagements, a few other things with Google Analytics.

Brett:

But tracking conversions and feeding your campaigns, you need the Google Ads conversion code. It's a must. You just absolutely have to use it. What's cool, though, here is now you can create different conversion actions, add to cart, purchases, other things, and then you can specify at the campaign level what you want that campaign to focus in on. That's really quite cool.

Brett:

Now, we've developed an approach that we call AMP. So this is our approach, is we've been thinking about, okay, how do we build the best YouTube and Google ad campaigns? And not thinking about campaigns as silos, but thinking about campaigns like a team, like a portfolio that work together to deliver amazing results. And that's what AMP is, Accelerated Marketing Portfolios. These are a portfolio of campaigns that work together to really grow your business.

Brett:

Because you're going to run into trouble if you think about YouTube the same way you think about Google search, or think about YouTube the same way you think about Google shopping, or if you think about top of funnel YouTube the same way you think about remarketing YouTube. They all serve a different purpose. They're all reaching someone at a different stage of the shopping journey.

Brett:

They work together and we got to hold them accountable, but they all are doing different things at different stages of the journey. So you need better ads. That's what we talk about it with our AMP approach. You need better measurement. You need better campaign structures. Let's talk about this. So we hear this a lot, right? Well, a lot of people come to us, D2C e-commerce brands, and they want to hit a portfolio ROAS of 200 to 350. Maybe it's higher. Sometimes it's higher.

Brett:

But that's what they want to hit as the return on ad spend as a whole. Now, when we come to them, and what a lot of people think is, okay, I need to be at 300% return on ad spend. So I need YouTube top of funnel to be at 300% return on ad spend. But that's not the right way to think about YouTube. That's faulty reasoning because 80% of people that say they watch a YouTube video in the shopping process say they do it first thing. They say they do it early in the process, not later in the process.

Brett:

So it's going to be very common for someone to click on a YouTube ad, watch a YouTube ad and then not buy for a few days. And maybe they're going to click another ad before they actually purchase. So the way we like to look at it is, hey, top of funnel YouTube, the ROAS there may be like a 0.5 to a 1.5, maybe even as high as a two. Mid-funnel ROAS, so that's like search and shopping, and there's maybe a couple of YouTube campaigns that are mid funnel, three to four ROAS.

Brett:

Bottom of funnels. So branded, remarketing, some real bottom of funnel campaigns, those are maybe going to convert at a 400% to 800% return on ad spend. So then when you put it all together, total money spent, total return, yeah, you're going to hit that 200% to 300% return on ad spend, and we would aim to hit whatever goal you have and that's what you should do as well, whether you're doing it yourself, from a media buyer, however you're doing it.

Brett:

But here's the difference. Do you want that portfolio to be big? Like, we're getting a big total return, right? We're getting a lot of volume at that 200% to 350%. Or do you want a little return? Still the same percentage, still hitting a 200% to 350%, but do you want it to be small or do you want to be large? And that's what YouTube can do. And that's what we see time and time again is when we inject YouTube at the top of the funnel of those early stages of the shopping journey, then we can blow that thing up.

Brett:

YouTube itself might not hit that 2X to 3X goal, but it's going to feed other campaigns. And collectively as a portfolio, they're going to hit that 2X to 3.5X or whatever your goal is. We can get there. And so one thing I will mention is your optimizing in the platform or you're optimizing in Google Ads, you're running your YouTube campaigns in Google Ads. So you're measuring there, you're optimizing there. You're optimizing there, so you need to measure there as well.

Brett:

But consider a little money in and total money out. And I'm about to talk about a topic that's a little bit too big for this event, and we could get super nerdy and it could take three hours and you don't have that kind of time for a virtual event. Attribution. Well, isn't YouTube and Facebook and maybe Google Shopping all taking credit for the same conversion? And the potential answer is, yeah, it's going to happen.

Brett:

So at a very simple level, we have to look at performance in the platform and we have to look at total money in and total money out. And that's how we can determine success. There are other tools, other ways to look at attribution, but at a base level, this is what you got to look at as well. So you need to know your KPIs in platform that translate into the total money in and total money out goal.

Brett:

So maybe you think your goal is a 2X return, but maybe it's like a 2.5 and that's going to get you to the global numbers that you want to be at. Now, let's talk about something. I geek out about this stuff. It's super fun and interesting for me. I'll try to not make this super nerdy. My wife's sometimes, when I'm talking to her and explaining what we did this today on YouTube and I'm explaining some of these concepts, she just looks at me and gets kind of sleepy and dozes off. Hopefully I won't do that for you, but I want to talk about brand lift, lag, and lifetime value.

Brett:

So let's dive in. This will be really helpful for you, I think. So brand lift first. This is a screenshot from an actual client who was doing a lot on YouTube. Now, prior to them starting with us, they were a six figure a month Facebook advertisers. They were doing a lot of volume on Facebook, multi, multi six figures a month on Facebook. This is a screenshot from Google Trends showing the number of people searching for their brand name.

Brett:

Okay. That little arrow, that's when we started YouTube. And we dialed up YouTube pretty fast for them. And you can see search volume for their brand almost doubled. And this was an established brand in the automotive space. And we helped really create some brand lift. So that's powerful because a lot of people will see that YouTube ad and think, "Hmm, that's interesting. I like that product. I like that brand, but I'm not ready to buy right now." And they're going to buy several days later, several weeks later, whatever.

Brett:

But this showed kind of this brand halo effect, brand lift effect for this company. All right. So that's brand lift. We get that. We get that that's going to happen. There are a few ways to measure it. One is by looking in your branded search campaigns and looking at Google Trends and things like that. But one of the other things I want to mention is lag. And so let's talk about the way Google Ads handles when they attribute a conversion.

Brett:

When does the conversion show up in Google Ads? Now, if you have an aversion to being nerdy, and this was like, "Man, I like talking ads. I want to see campaigns." Okay. You don't have to totally understand this, but I think you will. So let kind of use this as a scenario. Let's say that today is day one. So today's day one, a user is served an impression of your YouTube ad. Now, today, the prospect's busy, man. They see the ad, they're a little intrigued, but they move on because they're not quite ready.

Brett:

Day two, all right, now they're seeing it. They're hooked. They've maybe got time. Not only are they hooked with the ad and they watch it, but they click through to the site. But busy, they were doing other things, they don't purchase. Day three, they don't purchase. Day four, nothing, not purchasing. What's happening, then, if you're running these campaigns? You're starting to panic. You're starting to ring your hands a little bit. You're watching Google Ads. You're thinking, "Okay. Is anybody going to buy?"

Brett:

Finally, on day five, the person says, "You know what?" And then they're another impression. They're served to think, you know what? I do want that product. I do want that supplement skincare, product, device, whatever, new microphone, whatever the case may be. Okay. I want it, so buy it. All right. So then on what day does that campaign show up in the conversion column? For which day of campaigns will that conversion tracking show up?

Brett:

This is audience participation part. I can't actually hear you. But when does it show up? It actually shows up on day two. Day two is when the click happened. That's when Google's going to give credit. So click happened on day two. Conversion happened on day five. Credit is given back to the campaign on day two. So we're swimming along here. We're at day four. We're looking back at day two's performance and we're thinking, "Eh, not so great." But we just wait a day or two and the performance on day two looks way better.

Brett:

Let me show you a couple of other visuals to really help this come home for you. This is a view that's available now in Google Ads. So you look at any time window in Google ads and you can drill in and see this data. This is for an actual client. I won't show you who it is or what the vertical is. But looking at a couple of week window or so and Google will tell you, hey, for that window, we expect an additional 130 conversions to come in for the window you're looking at right now for a total of 505 conversions for that window, another way of saying it.

Brett:

You're looking today at this particular moment in time and we're saying only 74% of the conversions are in for that window. So we're looking for the last two weeks and Google's saying, yeah, that's only 74% of what we think is going to be attributed to that window. You wait another two or three weeks, it's going to be at the 90%. 29 days it's going to be at the 99%. We started creating these reports for our clients and they absolutely love them. Super helpful.

Brett:

This is for an actual automotive client. So if you look at their account today, direct conversions from YouTube, 97 conversions. You wait a day and look back at yesterday, in this case, you looked back at that day, 115 conversions. You wait seven days, now that 97 conversion day has now grown to 127. You wait 14 days now, 97 has turned into 129. The reverse is true for CPA. You look at the day of performance, $30. You go back in seven days and look at today, well, it's all the way down to 23. 14 days and it's all the way down to 22.

Brett:

So now maybe we were a little bit outside of our range initially, day of, but you wait a little bit of time and these numbers look fantastic. And think about it, this is the way people shop. It's the way people buy. It's the way you shop. We see an ad. We're intrigued. We don't buy it today. We buy in a few days. But Google gives credit back to when the click happened or when the view happens, depending on how you have view conversions set up. Okay.

Brett:

So as we look at our AMP approach, Accelerated Marketing Portfolios, we talk about these stages of the buying process. We talk about awareness, consideration, purchase, loyalty. Those first two stages, that awareness and consideration, that's prospecting, right? We're reaching new people. We're reaching people that have never been to our site. They've never joined our list. They've never bought our product. So those are prospecting audiences.

Brett:

Below that, at the purchase and the loyalty stage, a lot of that is brand traffic or remarketing traffic. So this is the type of traffic that something else had to trigger it. Something else had to introduce someone to your brand and now you're just sealing the deal. Now you're just closing that initial sale or you're closing that repeat purchase. So this remarketing and branded and the like.

Brett:

So what should the budget breakdown be? This is something that people ask us all the time. And there's not a one-size-fits-all answer here. It does depend on your brand. Let me just give you kind of a breakdown. Typically, if you look at a YouTube budget, whatever you're going to be able to spend on YouTube top of funnel or on YouTube in general, 70% to 85% of that YouTube budget should go to prospecting. That's where YouTube shines. 80% of people that they interact with YouTube on their purchase journey, they do it early in the purchase journey.

Brett:

So 70% to 85% of your total YouTube budget should be on that prospecting stage. And then depending on kind of the way your business works, if you look at your total Google budget, then maybe YouTube is 20% to 50% of that, right? Maybe higher. But 20% to 50% of your total Google budget is allocated to YouTube. Now, what about remarketing? Well, I think you can overspend on remarketing. I think remarketing is very important.

Brett:

If you sell multiple products, loyalty campaigns, cross-sell, upsell, bought X not Y, those campaigns are super important. But we say, hey, about 20%, maybe as low as 15% of your YouTube budget, on up to 30% of your YouTube budgets should be set aside for remarketing. And that's probably going to be about 10% to 15% of your total Google budget. When I say total Google budget, I'm talking search, shopping, display and YouTube, right? So looking at that total budget for the Google ecosystem. Okay?

Brett:

And then another thing to think about is, hey, if our goal is to grow, if our goal is to scale with YouTube, then 10% to 20% of your YouTube budget, it should be spent on experimenting. It should be spent on trying new things and going after new audiences and testing new creatives. You need to set aside some of that budget where you say this budget may fail. This budget may be a complete die or maybe a winner, and it's going to unlock scale for us.

Brett:

So one of things to keep in mind is that for any brand, for your brand, you have dozens, if not hundreds, it's almost always hundreds, of audience combinations to test. So as you launch, or if you work with an agency and as you launch, maybe the first few aren't going to be home runs. We're just looking for wins. We're looking for successes that we can build upon and really scale upon.

Brett:

So have dozens, more likely hundreds of audiences that you can scale with, and also you always have new creatives to test. So we have new prospecting creators we want to test. You want to build a manifesto. We try and outline that in that guide or an explainer plus UGC. Or maybe on the remarketing side, it's more user generated content or a longer explainer or quick reminders. There's more content that you need to test in the process as well.

Brett:

And so one thing we recommend is you should always be testing five ads per ad group, different CTAs and different headlines as part of those ads so you can always be optimizing and growing. And then as a bonus, we'll talk about this because it's a YouTube event. But people will watch your YouTube video and then if they don't buy, one of the next things they might do is search. And so then you want your search ads, your shopping ads to show up.

Brett:

And so one of the things you can do, and this is what we've done for BOOM! by Cindy Joseph, is we'll target people, specifically who've watched a YouTube ad, we'll target them in search and shopping. Just check this out super quick. This is a shopping campaign where we target only people that have viewed a YouTube video but have not purchased yet. $5.78 CPA, about a 863% return on ad spend.

Brett:

You can kind of see how this campaign can really bolster your portfolio performance and help you scale and reach those goals. So we do have Q&A in the chat. We're going to keep kind of moving right along because we have a lot to cover. And I know virtual events, it takes energy to listen. And I appreciate you listening and being so engaged. But do type in questions into the chat.

Brett:

We'll answer that now or we'll get to it very quickly. Or go check out the guide that I've mentioned. Or, hey, if you want to chat, like even if you just want second opinion, if you want to just see how our agency works or bounce some ideas off of us, if you go to the website, click on the 'let's talk' button, fill out that strategy session request form, and we'll be in touch.

Brett:

We'd love to look at your account, potentially do an audit, potentially take a closer look and see how YouTube could work for you. And as I mentioned, we actually handled this soup to nuts. So from creative strategy, building out, shooting new videos, editing existing videos, to audience, to campaign structure. We manage that all. So we'd love to chat with you.

Brett:

But we also want to provide great education. So if you do this yourself or do this with someone else, we want you to win too. We want you to succeed that way as well. And so with that, thank you so much for tuning into this session. But we are just getting started. And so just a really quick transition here, and then we're going to move into a session with my buddy, Kurt Elster, on landing pages that I think you're going to absolutely love. So let's get started and let's get...

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Several of my successful eComm friends are selling all or a portion of their businesses right now.  It makes sense.  Ecommerce valuations are at an all time high.  Also, when you consider that entrepreneurs make 50% or more of all the money they will EVER make from their business when they sell it - you have to be thinking about when and how you want to sell your business.  

In this episode, I interview my friend and expert M&A advisor, Joe Valley.  Joe is a partner at Quietlight Brokerage, one of the leading online-focused M&A advisory firms in the world.  Before joining the team in 2012, Joe sold his own business through Quiet Light. Since then, he has helped facilitate nearly a half billion in online exits and now is the author of the bestselling book, The EXITpreneur’s Playbook - How to Sell Your Online Business for Top Dollar.

Here’s a look at what we discuss in this episode: 

• What is an EXITpreneur and why it pays to think and operate like one
• Why you should start “training” for an exit now
• What if someone says - I love my business…I don’t want to sell.  
• Top mistakes to avoid when selling your business
• Real life business selling horror stories
• Plus more!

I do highly recommend Joe’s book. You can get your copy today at EXITpreneur.io and begin to understand the true value of your business - and how to get maximum value for it whenever and however you decide to exit.

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Joe Valley

Via LinkedIn

Via EXITpreneur

Quiet Light Brokerage

The EXITpreneur’s Playbook by Joe Valley

Mentioned in this episode:

Gino Wickman

Traction by Gino Wickman

Ezra Firestone

Andrew Youderian

Peter Lang

Episode Transcript

Brett:

Well, hello, and welcome to another edition of the eCommerce Evolution podcast. I'm your host, Brett Curry, CEO of OMG Commerce. And today, man, I could not be more excited about both the topic and the guests. The topic is extremely relevant to me, although maybe not in an immediately obvious way, which we'll get into in just a minute. But my guest is a friend of mine, guy that I've gotten to know over the last several years. And he's the real deal, and he's an expert in his field.

Brett:

So I'm delighted to welcome to the show today Joe Valley. And Joe, he's a partner at Quiet Light Brokerage, which really if you've ever looked at buying an online business or selling your online business, you've heard of Quiet Light. Everybody talks about Quiet Light Brokerage, but more exciting than that, and more timely than that, Joe just released a new book that's already hit the Best Seller list. And the name of his book is The Exitpreneur's Playbook, How to Sell Your Online Business for Top Dollar. It's received endorsements from the likes of Gino Wickman, author of Traction, which is also a great book, Ezra Firestone, Andrew Youderian. The list goes on and on. I endorse the book, not quite finished with it, but I've dug in, and it's absolutely fantastic. It's not only interesting and enlightening, but it's also extremely well-written. So we're going to talk today about what to think about if you're going to sell your business, all the planning and the things that go into that, or what to do if you're in my boat we're looking to buy some businesses. And so with that, Joe, how you doing man? And welcome to the show.

Joe Valley:

Fantastic, Brett. Thanks for having me, man. I appreciate it.

Brett:

Yeah. Thanks for coming on the show. We go way back. I think we connected at one of Ezra's events, I don't know, maybe three, four years ago.

Joe Valley:

At least, yeah.

Brett:

I'm bad with dates, but it's been a long time. And so Joe is just the guy who everybody like looks up to, wants to have a beer with, wants talk to, just really trust your insights. And so, Joe, I got to ask, because I know this process is painful, I know from being an author, not of a book, but of other things, of guides and of courses and things that I've done, that's hard work, man, like blood, sweat, tears, sleepless nights. So why write a book?

Joe Valley:

It had to be done, man. It had to be done. And I had so much information, or misinformation, out there about business valuations in the online space, what the process is like, and all this stuff. Historically, it's just been information from investment banking and private equity firms, but never from somebody who's sort of been an entrepreneur first and foremost, like myself. I sold my last e-commerce business in 2010. Since then joined Quiet Light, touched about a half a billion. And I can't believe I'm doing that with a B now, bruh, but I have billion-

Brett:

Amazing.

Joe Valley:

In online exits over the last decade. And I just had to write it. I've had 5,000 plus one-on-one conversations with entrepreneurs, and you know there's a lot more out there than that.

Brett:

Absolutely.

Joe Valley:

And I can't reach them all, and I can't talk to them all. And even when I talk to them one-on-one, it's a limiting conversation. So I had to put everything I knew and everything the team knows and put it in the book so that it's, as Sam says, you mentioned Sam says, "It's the definitive guide to selling an online business."

Brett:

Yeah. I love it. And what's so cool about it is, yeah, you can only have so many conversations, but there's so much misinformation or lack of information on how to get your online business ready to sell and how to do a proper valuation and how to train for exit, which we'll talk about in a minute. And I know from our perspective, as I look at creating content, and I create a lot of YouTube ad courses or Google ad courses or other things, my thought is hey, I want to help people, but also then if somebody who wants to work with us and they've already gone through the training, they're ready, they understand game and it's smooth and it's easier from that standpoint. Yeah, so the book is fantastic. Kudos to you. I was telling you before we hit record, it's not just informative, and I've read a lot of business books that are informative. It's well-written. It's an enjoyable read. And I like the written word, so I'm a bit judgy when it comes to things like that. And you did a fantastic job.

Joe Valley:

I appreciate that because writing a book about selling a business could be pretty damn dry. There could be details in there that could just make your eyes bleed. And that was the biggest challenge in writing it, was making sure that it was fun and interesting and something you'd want to come back to because you keep getting such good nuggets out of it.

Brett:

Yeah, yeah. Yeah, absolutely.

Joe Valley:

Thanks for that.

Brett:

Yeah, absolutely. So let's dig in just a little bit. What is an exitpreneur?

Joe Valley:

Well, that's a good question. I guess I had to define it, and I think did somewhere in the book. An entrepreneur is what we all are. First we just bootstrap and say the heck with it, man. I got to work for myself, and I'm going to go ahead and launch this business because I want a different lifestyle than going to work and working for somebody else every single day. An exitpreneur is that, but they also understand that the greatest value that they get out of their business monetarily is actually when they sell it. And so they've always got a mind towards selling the business eventually. And look, let's not pretend that we're not all going to exit our business someday. It may not be... For you, you love what you do. You might be doing this for another 30 years or 50. Who knows? But you're going to exit it someday.

Brett:

Yeah, at some point, right?

Joe Valley:

At some point. So you want to put it in the position of being ready for that well in advance of when you decide to do that so that in your situation if you're going to pass it onto your kids someday, that they're inheriting something that is a well-oiled machine and growing and not full of problems, and if you're going to sell it elsewhere, to somebody else, that it's got an incredible value so then it will help you and your family on your next adventure as well.

Brett:

Yeah, that's fantastic. And right, and I'm in a place now where I love running OMG Commerce. I enjoy the industry and the business and the team. And so yeah, no plans to sell, but you still got to get ready. And I remember one of the things you and I talked about before is even if you're not selling for a decade, preparing your business for sale now will make it a better business. It's just going to run better, and you're going to get more from it.

Joe Valley:

That's the absolute truth. That's so true. Well, you understand what the current value of your business is and what makes it more valuable. And we're not talking more clients and more revenue. We're talking about the other aspects of it that really blow up the value. Those really tough days that we all have as entrepreneurs get a lot easier because you know you're building towards something. So I think it's really important. Whether you're ready to sell or think you might sell or think you may never sell, I think it's really important to go ahead and put an exit goal out there and say look, in 10 years I want to exit for X amount of dollars. And then the next thing is you've got to understand where you are today so you know how close or far you are from that, because as our buddy... You're friends with Mike Jackness. I think yo know Mike, right?

Brett:

Yeah, I know Mike. Mike's a great guy.

Joe Valley:

Right, so Mike said to me, "Look, Joe, I knew what to do, and I was just going to get to it some day. And then I woke up, and some day was here." And by then it was too late to exit the way that he wanted to. He had four brands in one account, wanted to sell them all, wasn't able to sell all of them. So preparing for it, or as we say, training for it... Because nobody wants to do exit planning. That's just boring as hell... training for it is what the book is doing and getting you ready for.

Brett:

Yeah, it sounds like doing your taxes or something like that.

Joe Valley:

It's awful.

Brett:

Nobody wants to do their taxes, right?

Joe Valley:

It's awful.

Brett:

So what does that look like, then? What does it look like to train for exit?

Joe Valley:

Well, I had to put it all in writing so it's something that you can absorb over time, because if you're going to go out and run a marathon, Brett, most people are not going to be able to just go out and go to the gym or get out on the road and start running and just do it without any plan or focus. So the first thing we're doing is helping you understand what's going to be left over after the sale. And it's ballpark numbers because it always changes, changes every four to eight years with the political environment, because we're talking about capital gains taxes here.

Brett:

Yeah, yeah, exactly.

Joe Valley:

You may be paying more or less. You're not paying personal income taxes. So when you do the math on that potential exit, you got to figure out what's left over. So we're doing a little bit of that. So you're setting an exit goal, and then you're figuring out where you are today. And that exit goal, you can say 10 million bucks, but really it's what are you keeping is what the objective is. So we're talking about that. And then we're going through absolutely every aspect of the preparation and sale of a business, from valuation ranges to what buyers want to what scares the hell out of them to LOIs to deal structures, negotiating with aggregators. What the hell is a stability payment? Look it up. You're never going to find it. Now it's in the book. They made that up. All these different things that-

Brett:

that was made up by the aggregators?

Joe Valley:

Yes, made up by the aggregators. It's really an earn-out.

Brett:

So quick side note. What is a stability payment?

Joe Valley:

Stability payment is an earn-out, if you really want to just call it what it is, but they do earn us... And they do the stability payments. They call it a stability payment because FBA businesses are so risky that we're worried it's going to fall off a cliff after closing, so therefore, we want to hold back 10% in escrow, and we'll pay you that in 12 months if we're within 90% of the revenue at closing. It's pretty smart on their part. It lets them keep more of their money and buy more businesses.

Brett:

Yeah, yeah. Very interesting.

Joe Valley:

So just like if you are going to go run that marathon or just a 5K... Let's start with that.

Brett:

Okay, that sounds much more attainable. Thank you.

Joe Valley:

Right. I think you and I could both get up and go run a 5K tomorrow morning.

Brett:

We could survive it, yeah, yeah.

Joe Valley:

Exactly. We'd survive it. It would hurt a little bit, and then for the next few days it would hurt a lot more because we'd be recovering, right?

Brett:

Exactly.

Joe Valley:

It's the same thing. If you train for it, you're going to do well, and the recovery is going to be nothing. Same thing with a business. When you get prepared and you train for it, when you were in the process of exiting, it's going to be a whole lot smoother, a whole lot easier. You're going to get more money, a better deal structure. And then when it's all done, you actually will sleep at night, and you'll sleep better, as opposed to having lots of pain and a terrible deal structure where you're worried if you're going to get paid on the back end and all that sort of stuff.

Brett:

You'll experience the business equivalent of the runner's high. You'll be basking in the glow of the success.

Joe Valley:

I can't tell you if I've ever had a runner's high, to be honest with you.

Brett:

It's been a quick minute for me. I did run cross country, not well. I ran cross country in high school because my basketball coach made me. And so yeah, but I-

Joe Valley:

I was number five.

Brett:

What's that?

Joe Valley:

I was number five on the cross country team. And my kids hate the story of-

Brett:

Dude, that's intense.

Joe Valley:

No, no, no, no, no. I was the fifth runner on the team and only the top five score, Brett. Let's get this clear. I was not a good runner. And the coach... I was running too slow one day, and during a meet, he was like, "Valley, we need a number five." And I picked up my hands, and I started running faster, and I became number five.

Brett:

I'm number five.

Joe Valley:

And I've told my kids. My kids hate that story, and everybody else here does now too. But anyway, yeah, I'm not a runner, but you got to train.

Brett:

You too could be number five. This is awesome. So let's talk about what are some of the mistakes that are made? So let's take someone who's the opposite of an exitpreneur, because you've experienced lots of horror stories, sadly enough, tales of woe, which you've experienced firsthand as an advisor, but what are some of the common mistakes people make that you're trying to help them avoid?

Joe Valley:

Yeah. A lot of these are detailed in the book. And just for the record, I do change the names, yeah, and I use first names only. Look, the first one is really easy. People are not using proper accounting software. They're just winging it. They bootstrap the business. They're thinking about themselves. They're pulling enough out to get by, to grow, to buy a boat, whatever it is they want, but they're not using QuickBooks or Xero. And they're doing the accounting themselves. For the cost of a really, really nice car lease, you can get an e-commerce bookkeeper to do all that ugly stuff for you.. And that's what you should be doing. That's what you should be doing.

Brett:

Skip the car. Get the-

Joe Valley:

Skip the car. Exactly, exactly. And actually, you know what? If you get an e-commerce bookkeeper, you'll probably be able to afford that car a lot more quickly.

Brett:

Yeah, that's true.

Joe Valley:

So that's the number one mistake. And they're doing cash accounting instead of accrual. So it's impossible to initially at a glance calculate their discretionary earnings, because you got to take the time to flip it to accrual instead of cash. And that's true for content and SAS businesses as well as e-commerce physical product businesses.

Brett:

So in order to get ready to sell, you need that accrual-based accounting system?

Joe Valley:

Yeah.

Brett:

Yeah. So just to clarify, does that need to be the way someone files their taxes and does their taxes? Or it's really just they need to be able to have those reports, those-

Joe Valley:

You know I fell asleep in accounting class. I'm not going to tell you how to file your taxes. I'm pretty good at it now though.

Brett:

I did too. That was almost one of the only classes I fell asleep in in college. jazz class, astronomy, but I slept regularly in accounting class, yeah.

Joe Valley:

I think you're supposed to fall asleep in jazz class, just for the record.

Brett:

Well, yeah, and so quick side story. We had this professor who was great, passionate about jazz. And I actually liked after the class too, but we were in an auditorium. Lights were low. Jazz is playing. How can you stay awake?

Joe Valley:

Exactly. Yeah, yeah. So your tax advisor's going to do something differently.

Brett:

So that part doesn't matter. It's just can you produce accrual- based accounting reports?

Joe Valley:

Right. And look, most people... And I'm going to say most now is only probably 51%. It used to be 90%... people are growing up in this industry and get getting much smarter and much better and much more sophisticated. But half the people can't. So when I get a P&L and it's in cash and they have not done accrual accounting inside of QuickBooks or Xero, you just don't push the accrual button and have it flip. That's not the way it works. But it can be done after it's exported to Excel, as long as you've got beginning and ending inventory by month, quarter, or year, preferably by month. So beginning and ending inventory is ideal for that.

Brett:

Got it. Got it. Okay.

Joe Valley:

We got into the weeds there, folks. Sorry about that.

Brett:

Yeah. It's okay. Hey, we'll stay high level. Occasionally we'll we'll swoop-

Joe Valley:

Dip down.

Brett:

And get really into detail.

Joe Valley:

Okay. As long as we get our snorkel on. We got to breathe.

Brett:

Exactly. So what other big mistakes do you see people making that you highlight in the book?

Joe Valley:

They wake up and they just say, "I'm done, man. This is too much risk. I got to move on." And then they call me, and they say, "Hey, I want to sell. Hook me up."

Brett:

And you're like, "What?"

Joe Valley:

"Really? No, we can. What are you looking for? Ah, yeah, it's not worth that." So they wait until they're emotionally exhausted, worn out, tired, stressed, and just have to move on to sell instead of getting trained for it, planning for it a little bit. Six, 12 months out and thinking, you know what? I'm going to have a conversation with an advisor. I'm going to see what my business is worth today, and I'm going to march towards a goal. And then when you do that, you're happier, you're better, Your business is stronger, and you have a better exit in the future. But if you're not ready in 12 months, just move the goalpost. That's all you got to do.

Brett:

Just forget the business. You've been making these changes. It's probably going to be healthier, so-

Joe Valley:

You're going to love the business more too. I see that all the time. When they go through the process, they're ready. We go through the entire process, go through all the weaknesses and strengths of the businesses and get it prepared to sell and ready to list, and then I hear, "Joe, you know what? I feel like I'm leaving so much money on the table. I should've done X, Y, and Z, like you talked about. I'm going to hold it, and I'm going to come back in a year." And I think Good for you. Smartest move ever.

Brett:

Yeah, absolutely. And do you ever find like when someone... So somebody maybe comes to you, and they're a little burned out or maybe on the borderline of losing the passion for the business, they've started to implement some of the things that you advise them on, some of the strategies, do you ever find that that almost rekindles they're enthusiasm?

Joe Valley:

Absolutely.

Brett:

And then they're like, "Hey, maybe I should hold this for another year or so and get a bigger, a multiple."

Joe Valley:

Absolutely. I was at a e-commerce fuel event years ago and-

Brett:

Shout out to Andrew Youderian?

Joe Valley:

Shout out to Andrew. So I was sitting down with somebody. We talked about the deal, the deal structure. We got it all under LOI, going through due diligence. And this individual decided to be really difficult in due diligence because this individual... You notice I'm not saying he or she... decided they didn't want to sell because they were so much more excited about the business because of what they learned. And this was five or six years ago. That individual still owns the business today, and it's killing it. So it was a good decision for that person. And they've learned a lot. Eventually, that person just moved the goalpost much further down the line, but it's still in view.

Brett:

There's a really interesting concept. Do you know Peter Lang, by chance?

Joe Valley:

I know the name. I don't know him personally.

Brett:

Uhuru Network, I believe. Anyways, he was referred to me by a friend of mine, Tom Shipley, but Peter does a lot of teaching and training for people that want to acquire businesses. So he calls it systematic or programmatic M&A. And one of the things he talks about, which I really like this phrasing, he says... I don't know if it's originally him or not, but he said, "You always hear people talk about do you want to work in your business, work in it or work on it?" And so people talking about, "Hey, you don't get stuck in it. Work on it." And he said, "Really, what I think you should do is work above it, work above it like an investor. Think like an investor would think." And I thought that's a pretty interesting way to look at it. And if you look at your business like an investor would, you remove some of the emotion and you can begin to look at it objectively and say okay, I still love parts of my business. I can't fully detach the emotion from my business, but I'm seeing it and thinking about it now like an investor would. And I think in some ways that makes the game more fun for you now, but it also prepares you for that exit.

Joe Valley:

Yeah, I love that. I thought you were just going to stop with working on your business, not in your business. And I'd be like yeah, I've heard that. But now I love that. Think about it-

Brett:

investor. That's good-

Joe Valley:

Go above. I like Peter Lang. I need an intro.

Brett:

I will make that happen. I'll make that happen for sure. Cool. So then I want to talk about valuations for a minute. And you know this, and I mentioned this maybe on the podcast a couple of times, I know I have, we're looking to buy some businesses. I'm on the other side. I want to acquire some businesses potentially. But the valuation game is tricky. That's the thing where the seller thinks the valuation is one thing. The buyer thinks that it's worth another thing. What are some common valuation mistakes that are made? And kind of what are some tips on proper valuations?

Joe Valley:

Yeah. So for buyers... I wrote this book for sellers, but if buyers read and absorb the material in this book and they go out and they find a business on their own, they're probably going to find some pretty serious, what I call ignorance discounts, meaning the seller didn't do a proper job in calculating seller's discretionary earnings. These businesses are listed as a multiple of SDE, seller's discretionary earnings. And the biggest mistake that sellers make is they don't properly calculate that. The number one thing that, aside from being truly underinformed, misinformed... Ignorance discount is not the proper phrase, but is when somebody lists their... It's a rapidly growing e-commerce business, and they list it for sale using cash accounting. That's going to depress the age out of discretionary earnings.

Joe Valley:

And if you're a buyer and you can find a business like that listed by somebody individually, you're going to get some pretty serious instant equity, because discretionary earnings is probably a heck of a lot higher. The other one, Brett, that so many people don't do when they list the business on their own or with an inexperienced advisor is if the owner of that business is using a cash back credit card, and they're not having it put on their P&L, which so many don't, they're like that's a nice perk. I'm going to take that. And it's sliding over, or they take the rewards... We get the rewards here... that's an owner benefit. And that goes to the bottom line. If it's not in the P&L, you can put it in the add back schedule. So if you're getting a hundred thousand reward points every month, that's a thousand bucks a month? Or is that 10,000? Yeah, it's 1% on American Express.

Brett:

Yeah, it's thousand, yeah.

Joe Valley:

So if you get 12,000 bucks added back just because of converted reward points, it's black and white, math and logic. It's no trickery. It is what it is. It's an owner benefit. And if you're at a four-time multiple, a three-time multiple, it's $36,000 to $48,000 added onto the list price of the business. So as a buyer, if you're looking at a P&L, look for cash back or converted reward points. If it's not there, find out if they're using it. If they're spending money on advertising, odds are they're using their credit card. And then that credit card has some points. So that's instant equity that I see most people when they sell on their own, they give it away. They give it away.

Brett:

Yeah, that's awesome.

Joe Valley:

You know what's tricky... I don't want to get too far into the weeds here, so stop me, but one of the things that you can look for as a buyer, or make sure you don't do as a seller, if you've renegotiated your cost of goods sold in the last 12 months, let's say six months ago, and your cost of goods sold went down by, let's do simple math, a dollar a unit, and you sell 10,000 units a month every single month, you've got six months where that new price, that lower price, is not on the books. That benefit is going to carry forward to the new owner of the business. So you need to take 10,000 units a month times that dollar. That's a $10,000 adjustment or an add back, because that's going to carry forward, that reduction. So it's 60,000 bucks right there that should in the add back schedule. 60 times, again, that's $360,000, $480,000 legitimately added to the list price of your business. You got to look for that. And as a buyer, you want to look for the opposite. You always-

Brett:

What are some add backs that are likely missed, or some of that carry forward that was potentially missed by the seller?

Joe Valley:

Yeah. Well, you always want to ask, I would say as a buyer have your cost of goods sold gone up or down in the last 12 months? And you really try to find out if they went up, because if they went up, you've got to make an adjustment too.

Brett:

Yep, yep. Super, super interesting. That's great. And what have you seen... So you mentioned aggregators for a little bit. I have some friends that work for aggregators, and it's really an interesting thing in the space right now, not that consolidation is a new thing by any means, but there has been definitely a rise in aggregators in recent years. In fact, I just recorded a podcast the other day with an aggregator talking about the rise of aggregators, but what have they done? So your and others, what have they done to valuations of e-commerce businesses? Have they shifted the landscape at all?

Joe Valley:

Absolutely. No question about it. And they're so well known, and they're getting so much press that FBA business owners are realizing, going, "I can sell this thing." So I remember being at an event maybe six years ago when I had a little booklet. Now I have a real book, but my little booklet was called 10 Steps to Selling your Amazon Business. And the person that was putting on the event got up on stage, and he talked about the survey that he did with his group. And it was like 80% weren't even selling on Amazon. They were so proud. They were Shopify and WooCommerce sellers. And who needs this Amazon stuff? Well, he did it again last year, and it was just the opposite. 80% of them are selling on Amazon. That's where most of their revenue comes from. Now six years ago, the the perceived risk, I should say, of buying an Amazon business was incredibly high. So therefore, the multiples were lower. Today people that are a lot smarter than you and I, that have raised billions of dollars, have proved that it's not as risky as you think. And the multiples are climbing because of that, and because of the competition among them, the multiples are climbing too.

Joe Valley:

So it's a great opportunity to sell an FBA business, because these aggregators are fighting tooth and nail over each other. Brett, we've had an average of four and a half offers on every listing year to date.

Brett:

Wow.

Joe Valley:

Every one of them. 62% have gone at or above asking price because of the competition-

Brett:

That's crazy.

Joe Valley:

When it's an FBA business among the aggregators.

Brett:

Yeah. But it makes sense a lot of these areas have raised $400, $600 million to be investing in other businesses. And they can't just have that cash sitting there. They've got to go acquire some stuff to create the return. And so that, yeah, maybe they're going to pay a higher multiple than would've been expected a few years ago.

Joe Valley:

Yeah. They don't like to. When first started out, they were buying them at two times at best. And now Brad just put one under LOI yesterday. I think it was 5.4 before inventory, like a 6.3 with inventory.

Brett:

And this was an FBA-only business? Or was-

Joe Valley:

Yeah, it was, well, I call it FBA business when it is 85% FBA. Yeah, so, yeah. Yeah, and it was a substantial business. The larger the business is, the lower the risk, therefore, the higher the multiple. If you've got an FBA business doing $100 thousand in revenue, I'm sorry, you're not going to get that five and a half time multiple. But if you're doing a million and a half in discretionary earnings and you're growing like crazy and it's fully transferable and all these other things, it's possible. It's possible.

Brett:

So once you exceed the three, three and a half times multiple, it's because you're diversified. It's because you've got larger SDE, which is perceived as more valuable, and because you've got a growth trajectory as well, I would assume.

Joe Valley:

Yeah. It's all because the growth, the transferability of the business, the documentation, it's all great, great branding, maybe some recurring revenue. Buyers love recurring revenue. Whether it's B2B where they're constantly buying your product or supplements of some sort, it's trackable, and it's just money that shows up in your account every month.

Brett:

Yeah, Which is beautiful for sure. So I think everybody gets hung up on multiple. They want to-

Joe Valley:

Way too much.

Brett:

They want to brag about the multiple. They want to talk about the multiple. They get all upset if they don't get offered the multiple. But there's more that goes into that, right? I even heard a savvy buyer say one time, "I don't care what the multiple is. If they want to hire multiple, I'll just figure someone else out to make the deal work in my favor." So when I heard that, I was like all right, well, there's something there. It's almost like the car dealers like, "Just tell me how you want your monthly payment to be, and I'll figure out a way to make it work So anyway, what needs to be considered other than just multiple?

Joe Valley:

You want to look at... We're talking about a buyer or from a seller standpoint?

Brett:

From a seller standpoint, yes.

Joe Valley:

From a seller standpoint. So we've got a couple of chapters, probably three chapters, 13, 11, and 15, I think they are, on negotiating with the aggregators, what they're looking for and how to work with them. They're all good people. And I say that-

Brett:

Yeah, yeah, yeah.

Joe Valley:

Most of them are really good people.

Brett:

Good people, yeah.

Joe Valley:

They're smart.

Brett:

but good people.

Joe Valley:

Yeah, yeah. Look, they're not bad people. They've managed to raise $500 million, they're probably pretty likable.

Brett:

pretty smart.

Joe Valley:

So we go into the different types of deal structures. So there's a total of six of them. Or really it's 11 because cash is one, and then it could be cash plus cash plus a stability payment, cash plus the seller note, cash plus a working capital peg, inventory seller notes and all these different things. So understanding the different types of deal structures that you could possibly have as a seller. Most sellers want to say no to anything but all cash, but oftentimes having an or seller note or an equity role can give you some peace of mind and some income after the sale. Maybe if this exit isn't enough for you to be done and stop working, you still need some income after the sale. So rather than take a smaller all cash amount, you may be able to get more for the business.

Joe Valley:

Like the one I just mentioned. The cash wasn't 5.8, or whatever the number was. It was cash and then an earn out and a consulting a bunch of other stuff. And it just gives peace of mind after the sale. But again, most people want to say no because they don't know who the buyer is. An uninformed, an ignorant, whatever kind of mind, always says no. Once you get to know your buyer, you may say yes, and it may be in your benefit to say yes, but you've got to understand all of these different deal structures before you want to say yes to any of that. And of course, you got to have a very good attorney to make sure that you are locked in and secured and that you will get paid. But we talk about that, and then we talk about how to properly negotiate with the person that's buying your business. You want to work with good people, right, Brett?

Brett:

Yeah, absolutely.

Joe Valley:

As do I. This is not Wall Street, second place is for losers or whatever.

Brett:

Yeah, not cut throat. It's not like a winner and a loser. You're trying to come to some agreement where it's-

Joe Valley:

It's a win-win. It's got to be a win-win. What I talk about in the book and what I've learned over the years through trials and tribulations, my own successes and failures, is that you don't just build a great business for yourself. You got to have the mindset of building a great business for great customers and a great buyer to eventually take over at a great price. And that great price has got to be for both of you obviously. there's a lot of greats in there. There are no losers in it. So you've got to shift your mindset a little bit and think of your buyer and giving them something that's amazing. And they're going to pay you a higher price for that if you give them something amazing. If you give them a house of cards, they're going to figure it out.

Brett:

Yeah, yeah. So in looking at these deal structures... And this is kind of top of mind because you and I have a couple of mutual friends who have recently done partial exits, so they've equity. They've taken some chips off the table. They sort of sold a portion of their business. They're retaining some equity. They're still working in the business for a period of years, however many that is, two, five, whatever. And then they're going to exit again. Why are deals like that potentially pretty attractive and maybe worth thinking about right now?

Joe Valley:

Yeah, they can be very attractive. They're unattractive if you need to get all of your chips off the table, but if you get 75% of your chips off the table and roll the dice on the other 25%, it could be a much higher exit for you. I think what we're going to see with some of the aggregators, and whether it's an FBA aggregator, somebody rolling out just Shopify sites or whatever it might be, is that they're going to try to do more equity roles. And so if you've got, for example, I'm going to try to do simple math here.

Brett:

And the reason for that is because they want to retain that founder, that visionary, that operator to some of the work, right?

Joe Valley:

Strangely enough, no. They just want to get the deal done. That's what they're fighting for now. Most of the time, they've got the in-house expertise and staff.

Brett:

Got it. Got it. Okay.

Joe Valley:

doesn't need me...they don't need me to operate it. They want me to go away, but if-

Brett:

They want to get a deal done.

Joe Valley:

They want to get a deal done. So let's just simple math though. If I've got 400,000 in discretionary earnings, and let's just say that I'm going to sell it at three times for simple math. Folks, I'm not telling you folks that your business is worth three times here. I'm just giving you an example.

Brett:

Easy math.

Joe Valley:

Easy math. So that's 1.2 million. But if I sell 75% of it, what is that? 85? Now it's not easy math, right?

Brett:

Yeah, it's-

Joe Valley:

I'm going to hold back a hundred thousand of it, 25%. I'm selling 300,000 of it, so I'm getting 900,000. I'm rolling the hundred thousand into the new co that is a bigger company, that's worth a higher multiple. So I'm getting a 300... Sorry... getting a three time multiple on my 300,000. But the moment my hundred thousand goes into the new co, that company's probably worth 10 to 20 times on their exit, like, right?

Brett:

Mm-hmm (affirmative).

Joe Valley:

20 times easily, right?

Brett:

Yeah, yeah, yeah.

Joe Valley:

So my 100,000 now becomes worth a million. It's worth on paper more than my 300,000. That's the benefit of an equity role. The problem most entrepreneurs have with it is the concept of I have to go to work for someone? I don't want a job. And we just saw an-

Brett:

And a lot of entrepreneurs, let's face it, are unemployable.

Joe Valley:

Totally unemployable. I'm unemployable. There's no question about it. But what you can do is just become a strategic advisor to the company, which just means you're going to sit in on meetings about maybe new product launches and share your ideas on where this is going to go. And so you're having a quarterly meeting, and that's about it. That allows the aggregator to put out less of their cash and let you participate in the upside, and they know that they can draw on your expertise and your experience, but you're not working for them. You're just becoming an advisor for them. So I think that is probably something we're going to see quite a bit more of. And if you find the right buyer for your business, whether it's an aggregator or somebody else that you trust, I think it could be a really excellent-

Brett:

could mean a higher multiple. And it's just pretty interesting. And that is another one of those win-win, right, where the aggregator or the buyer gets to put out a little less cash?

Joe Valley:

Yes.

Brett:

They're allowing you to participate in the upside, but it also allows them to win the deals. So, yeah, it totally makes sense. But I love that you outlined this in the book. And what'd you say? Six, seven deal structures?

Joe Valley:

Yeah, I think there's six total deal structures in the book, but when you add cash to each of them, there's now 11, because it can be cash, or it can be cash plus this, cash plus that, or cash plus five of them. It can get pretty complicated.

Brett:

And thousands of different ways to do each one of them six categories of deals.

Joe Valley:

Right, right. exactly.

Brett:

Awesome. Let's just do a couple of quick things here because we're about out of time, but other tips, other little bits of advice for sellers? What should they be doing? Thinking? Now, other than buying a book of exitpreneurs, which I highly recommend, get it on Kindle, hard copy, whatever, what other pieces of advice would you give?

Joe Valley:

Yeah, it's a good question. I would say that you really want to figure out your own level of incompetence, and you want to figure that out pretty quickly.

Brett:

Got to be self-aware, right?

Joe Valley:

Yeah. You got to be, just because we're entrepreneurs. We have an affliction. We think we can do anything. I can do that.

Brett:

And that mindset, that spirit is valuable.

Joe Valley:

It is.

Brett:

But not always. You got to be aware-

Joe Valley:

Not always. So you may be able to get your business to 10 or 20 million, but can you get it to a hundred million? Are you equipped to bring on a staff of 35 and go overseas and work with an overseas manufacturing company once a quarter or once a month? Are you emotionally equipped for that? And do you have the ability to manage a business of that level? Or do you have an interest? Can you? Probably. Should you?

Brett:

Would you like the life that that creates? And you might not.

Joe Valley:

Exactly.

Brett:

Be self-aware.

Joe Valley:

So really be self-aware. Figure out the kind of life that you want to live. Make sure you don't promote yourself to your own level of incompetence, because when you do, your business will suffer, and then the value will go down.

Brett:

Yeah, yeah. It's tough. Awesome stuff. Joe, where can people find the book or connect with you?

Joe Valley:

Yeah, yeah, yeah. I appreciate that. Exitpreneur.io. Exit preneur.io, or just do a search for it on Amazon, exitpreneur, or The Exitpreneur's Playbook. They can find me on LinkedIn. They can hit me up at joe@exitpreneur.io. I keep saying.com, but it's IO. Or at Quiet Light, joe@quietlight.com.

Brett:

Yep. And so huge recommendation for the book. Also recommendation for Quiet Light if you're looking to sell your business. And so just a quick point for Quiet Light as well, Joe. If someone's thinking about it, considering it, at what stage should someone reach out to Quiet Light? An e-commerce store owner, when should they reach out to you?

Joe Valley:

You know what? If they're at least 12 months old, I think it's time. It's time. And the key thing about Quiet Light, just to distinguish who we are and what we do, everyone on the team has built, bought, or sold their own online business. They're all very successful entrepreneurs first and foremost, and then they became advisers. Brad, who you know, rolled up-

Brett:

Yeah, Brad, I know him.

Joe Valley:

With 30 content sites, so the private equity firm. Amanda's been on the cover of Time Magazine for goodness sake-

Brett:

Crazy.

Joe Valley:

For her Pearl importing business. I am a slacker compared to some of the guys on the team.

Brett:

But you got the book, man. You got the book. You can always-

Joe Valley:

I had to write it just to keep up with them.

Brett:

That's awesome, man. All right, Joe, really appreciate you taking the time, man. This was a ton of fun, very informative, and glad we did it.

Joe Valley:

Thanks, man. I appreciate having me on.

Brett:

Yeah, absolutely. And as always, I appreciate you tuning in, and I'd love to hear from you. Give us some feedback on the show. What would you like to hear more of? What topics should we cover? And if you haven't already, I would absolutely love that review on iTunes. And with that, until next time, thank you for listening.

‍

Nearly every day we have eCommerce companies reaching out to us wanting to know how to grow their eCommerce brands using YouTube ads.  YouTube ads are both exciting and mysterious to most store owners.  

In this episode, I’m bringing you insights from some of the best and brightest minds at OMG Commerce. This is the audio recording from a recent YouTube ads expert panel that I moderated.  This was a really fun panel for me because it was made up entirely of my team.  I brought in 6 of our top YouTube ad specialists from team OMG to answer your burning YouTube questions.  I think you’ll really learn a lot and enjoy this format.  Here’s a look at the questions we dive into:

• What are the best YouTube audiences to launch with and what are the best audiences to SCALE with?
• How are YouTube ads different from Facebook and IG ads and different from ads on other platforms?
• How long does it take to start reaching your CPA or CAC goals?
• What kind of scale is possible with YouTube ads
• When things go wrong on YouTube - what’s usually the cause? 
• How important is production value to the success of your campaigns
• What new YouTube features are you most excited about?

‍

Sheila Secrest

Derek Casas

Heidi Sturrock

Greg Maycock

Bill Cover

Matt Slaymaker


Mentioned in this episode: 

Kurt Elster

‍

Brett:

Well, hello, and welcome to another edition of the eCommerce Revolution Podcast. I'm your host, Brett Curry, CEO of OMG Commerce, and today you get to hear from not one, not two, not three, but six OMG Commerce experts and myself, so I guess that makes seven. But today we're doing a replay of a recent YouTube ads panel, an expert panel with six of our brightest specialists and strategists from here at OMG Commerce plus myself. So I'm grilling this crew with questions about audiences, best audiences to start with, best audiences to scale with. We talk about the differences between ads on Facebook and ads on YouTube. We talk about what should you expect as you launch campaigns on YouTube, when should we get our CPAs or our customer acquisition cost really dialed in and all kinds of other burning questions that I know a lot of you have when it comes to YouTube ads. We answer them in this expert panel, so I hope you enjoy this as much as I enjoyed moderating this panel. So check it out, the OMG Commerce YouTube ads expert panel.

Brett:

This episode of the eCommerce Revolution podcast is brought to you by OMG Commerce resources. That's right. Here at OMG Commerce, we want to help make sure you're educated and in the know to capitalize on the latest tips, tricks, and strategies to help you grow your eCommerce business. So if you go to omgcommerce.com and, under resources, click on guides, we have some cutting-edge free information for you on things like how to dominate with Amazon DSP ads or how to use Amazon's Sponsored Brand video ads and how to craft the perfect ad. We have several guides on how to capitalize on YouTube ads, from creating the perfect ad to knowing when you're ready to scale. Plus, there's a newly updated Google Shopping guide plus more. Check it all out at omgcommerce.com and click on guides under resources. Now, back to the show.

Brett:

All right. Well, I know this session is possibly the whole reason you attended this event. You want to hear from the experts. You want to hear from those that are behind the scenes, managing campaigns day in and day out. So I've assembled a dream team here. This is the OMG Commerce dream team. This is the team behind some of our biggest wins, some of our fastest scaling accounts. These are the guys and gals managing things and making dreams come true on YouTube. So I'm going to do quick intros and then we're going to dive into the most asked questions we get all the time from prospective clients and clients we're working with and just people we know that are interested about YouTube ads. These are the hot questions. We're going to dive into them in a minute. But, first, I'm going to do quick intros so you know who you're hearing from and who you're learning from. So, first, I'm going to start at the bottom of my screen. Sheila Secrest. What's up, Sheila?

Sheila:

Hey.

Brett:

And so no relation to Ryan Seacrest, but Sheila is nearly as charismatic and she's way better at YouTube ads than Ryan Seacrest. But she's working with some of our fastest-growing accounts, been with OMG for almost five years. She's a rockstar, got good insights. She's scrappy, and really excited to have her on the panel. Going to move up from there, and Derek Casas. What's up, Derek?

Derek:

Hey. How's it going?

Brett:

You've got almost a glow, angelic almost. Your background is bright white light. Derek also is into photography, so he's got a leg up. He's got a really cool set-up, a nice camera, and all that. But Derek has been working in digital advertising now for some huge brands across the US and Latin America for eight years. He's managing some of our top YouTube ad spenders. Derek and I work together a lot, and so, Derek, really excited to have you on the panel. In the middle, in the middle of all of this, is Heidi Sturrock. Heidi, what's up? How are you?

Heidi:

Hi, everyone. Good, thank you.

Brett:

So, believe it or not, Heidi was the first, the very first, Google Ads specialist at OMG Commerce. We have not run her off yet. And that was a solid 11 years ago, 10 years ago? I don't know. That's an eternity. I don't know.

Heidi:

Yeah, I think it actually might be going on 12. We might be going on 12 years, yeah.

Brett:

12, yeah. So I'll go with that. But Heidi knows Google Ads inside and out. She's helped us recruit other great people to OMG. Really, Heidi's just helped with the formation of who OMG is on the Google Ads side. So, Heidi, glad you're here. Thanks for taking the time, really appreciate it. Next to Heidi is Greg G-Money Maycock. What's up, Greg?

Greg:

Hi. How you doing?

Brett:

Greg is our lead technical strategist. Greg knows the YouTube algorithm. Greg knows Google ad campaigns and YouTube inside and out. Whenever we're scaling a huge account on YouTube, we want Greg's input, and so you'll learn very quickly Greg is very, very smart. He's also an entrepreneur. He's owned businesses. He's worked in the travel industry. He's got a really wide breadth of experience. So, Greg, thanks for coming on the panel. Then directly above Greg is Bill Cover, and Bill is specialist turned strategist. And I don't know, Bill. First of all, you look good. I love the beard. Honestly, we're-

Bill:

Thanks. I tried to dress up for you.

Brett:

.. But I don't know, man, something about that outfit just doesn't feel quite Internet marketing enough. It doesn't quite feel like you.

Bill:

Okay. I can go t-shirt.

Brett:

I think you need to go Internet marketing. I think you just need to adjust just a little bit.

Bill:

All right. Well, these are button snaps, so here we go.

Brett:

Yeah. Going Internet marketing, that's what we're going to call that. But Bill Cover, longtime eCommerce guy, worked in the development side of things, has been a specialist, now a strategist, of great insights. Bill, thanks for coming on, and thanks for partnering with me on that cheesy shtick there for going Internet marketing. Then, last but not least, Slaymaker. The play-maker, Matt Slaymaker. What's up, man? How are you?

Matt:

Hey, everybody. Hey, Brett.

Brett:

So Matt is a client favorite. Everybody loves working with Matt. Matt also has experience on Facebook and other platforms, so he's got a really unique perspective that he brings to YouTube and Google. He's just crushing it. He's got a really cool last name, too, so that's part of why we had him on the panel. Then, of course, I'm Brett Curry. I'm the CEO. You've heard from me a lot today. I'll be mainly serving as moderator. I want the brilliance of the team to shine forward. But I have a hard time not saying anything, so I'll probably chime in a little bit as we go. But with that, let's dive right into these questions. So first one, what are the most important elements of a YouTube ad? We're trying to create a YouTube ad that works. What are some of the most important elements? I'm going to open it up to you guys.

Greg:

I've got three things that come top of mind. I think the first thing is the intro. As you know, you can skip a YouTube ad for most ad formats, and so that first five seconds is very critical. In that first five seconds, we want to make sure that, one, we get a branding impression so that if someone does skip, at least we have gotten our brand in front of the viewer. Second is I think you want to make sure that you tease something that is going to be provided in the video, whether it's an offer, a call to action, or a promise of something that they're going to learn in that video to engage the viewer. So the key there is branding impression and engage the viewer. Then I guess I would transition into the core of the video. The key there is to keep engaging and re-engaging. So you cover whatever you need to regarding the product or explaining the product, and there's always something coming next that keeps the viewer engaged.

Greg:

Then I think the third element, which is really where the rubber meets the road, is a outro that includes a clear call to action. People want to be told what to do. If someone's engaged in the video and watched it to completion, they want to know what to do next. So we want to make sure we provide a clear call to action and then, ideally, an offer. So if this is a campaign for a new customer acquisition, then a exclusive offer or something that's discreet and unique to viewers of that video will work very well in driving conversions. To me, those are the top three elements for a video.

Brett:

Awesome. Love it.

Matt:

Yeah. And to elaborate a little bit on what Greg said, what makes a successful YouTube ad all the way through is going to vary so much based on the type of business that you are, the industry that you're in, and the voice of your brand and the way that the messaging will resonate with your customers. So the way that you are going to engage the user immediately, like Greg mentioned, getting them to stay past that five-second mark, will vary. Some brands do this with a question, so asking a question at the very beginning, "Is this you? Do you have a problem with blank?"

Matt:

Then when it comes to that call to action, create some sense of urgency, so don't just say, "Hey, come to our website now." Like Greg said, have some sort of offer attached to that that makes them feel like, "I got to act on this right now. I got to click on this video ad right now or this chance might not come up again." But all the details in the middle, that's going to vary so much based on what you know about your target market, what resonates most with them. So do as much research as you can beforehand and plan as much as you can beforehand in planning out that video ad.

Brett:

Love it. Anybody else want to chime in? Super good..

Bill:

Yeah. I feel like I see a lot of YouTube ads that do the classic Super Bowl television commercial format, which is like, "Here's the teaser and the meat of the thing," and then it's like, "Budweiser," the brand. But a YouTube ad, you can't move that cursor, and people don't have to stick around. So make sure that you're ... As you said, as Greg said, put that brand impression ... Pull that forward and pull that hook and that message forward. You don't want that traditional story arc that has a build and then a climax and then the message. You want to make sure that all of that is stacked at the front. You want to sell that as early as possible and then give a call to action. Then your ad can be two to three minutes, so if someone chooses to stick around and find out more, keep selling. What are some common objections? Supplement that earlier information with more detail, maybe some peer evaluations and testimonial. Give another call to action, that sort of thing.

Matt:

Yeah. And one thing that's super important to keep in mind, what Bill was saying, is that a lot of times you don't pay for the YouTube ad until somebody watches 30 seconds of the video or clicks on the video, so trying to stuff as much important, valuable information in that 30-second mark so if anybody does for any reason hop off, they still leave that video with a lasting impression of your brand. Maybe if they didn't watch 30 seconds or more, they'll come back and do a search for you, and that's equally valuable to us.

Brett:

Yeah. So this has been fantastic, and we've talked a decent amount across the event about what makes for a great YouTube ad. But one of the things you just mentioned, Matt, reminded me of something that we used to talk about in copywriting a long time ago, when you said, "Hey, the guts of the video is going to be different depending on who are you going after on what does your product do well." We always would look for, what's that intersection between what you're best at and what your market really wants most, right? This is two-thirds of a Venn diagram. Anyway, but thinking back to Volvo as an example, this is an old example, but they're all safety, right? Their position was safety not sexy when it comes to cars, and so that appeals to parents, right? So it's like what do we do best versus what our market wants most, where's that overlap, that's what we're going to key in on. That's something important to look at, too.

Brett:

Awesome. Anybody else? We got a lot of questions, so lots of good stuff ahead. But anybody else want to chime in? All right. Let's talk about then ... A lot of people that are tuning in today, their background is Facebook. They spend more on Facebook than on YouTube. As an agency, that's our typical client, someone that comes to us and they're spending six figures a month on Facebook or sometimes 20, 30,000 a day on Facebook and they want to have success on YouTube. So I want to talk about some of the differences, and let's start with audiences first. What are some of the differences between a YouTube audience and a Facebook audience?

Bill:

You get your demographics, you can categorize these audiences into interests and behaviors on both platforms. So all of the demographic tools are there on YouTube and on Facebook. When you look through some of the Facebook default audiences, you have interests like what forms of entertainment are they into, fitness, health, hobbies, et cetera, and then you get what Facebook refers to as behavioral traits, but when you look through the list, it's stuff like do they have an anniversary coming up, what mobile device are they using, browser are they using, political affiliation, which I think is kind of funny they have that, whether or not they're engaged shoppers, but who isn't, we're all buying something at some point, soccer fans, upcoming travel, that sort of thing. All of those things are available on YouTube.

Bill:

Where I think YouTube is able to take it a step further is that YouTube, obviously owned by Google, knows a lot about us and a lot about our behavior, and they are learning to understand very deeply what we are into and what we are about to do. So our behavioral traits on YouTube ... And I think Facebook used to have this, but when Mark Zuckerberg has to testify before the Senate, then things change. So YouTube has very advanced behavioral queues to understand what we are about to purchase, and their machine learning is constantly refining that to understand was it correct, was it incorrect. While we don't see the individual, we see groups of individuals, so privacy is still there, YouTube unblocks those tools so us as marketers, we get to tap into those groups who are about to do X. In eCommerce, that's so valuable because we want to find somebody who is about to purchase X and who is exhibiting these behaviors. So I think that's one of the key fundamental differences there.

Matt:

Yeah. I would love to elaborate on that a little bit because what Bill said is perfect. Basically, what it comes down to is that what Facebook is great at is targeting people based on their interests and who they are in terms of their demographics, and they do have some great targeting opportunities for that. Outside of that, one great thing about Facebook is the lookalike audience targeting. That can sometimes work really well for a lot of brands. But the reason that I've had a lot more success on YouTube ads versus Facebook ads is due to what Bill was elaborating on, where we can build out custom audiences based on what people are actively searching for. So rather than going after somebody's-

Brett:

That says so much about someone's state of mind and what they're trying to do, how they're searching on Google.

Matt:

Yeah, because your long-term interests can be very different than what your short-term interests are. A lot of times, I find a lot of success on YouTube with custom intent audiences or in-market audiences that are built out by Google. But it's going after people based on what they're actively shopping for right now. If they're actively shopping for it as opposed to the longer-term interest, the likelihood of converting here in the short term tends to be a little bit higher. So, yeah.

Brett:

Awesome.

Bill:

Yeah, and-

Brett:

And what about differences in ... Actually, did you have something else to say there, Bill?

Bill:

Yeah. Let me just play off that a little bit with regards to the behavioral audiences and custom intent. YouTube not only gives us audiences that are in-market, someone in the market for running shoes, but the custom intent audience allows us to create a custom profile so that we're not just looking for someone who's looking for running shoes. We're looking for someone who's looking for running shoes for a marathon or for a track race ..

Brett:

Or minimalist running shoes and barefoot running shoes and running shoes to run in the rain, all kinds of very specific stuff that you can try. Yeah. Yeah, really, you're only limited by your imagination in a lot of cases and maybe some privacy things, but you can be very creative with your audience creation efforts on YouTube.

Bill:

Right.

Brett:

Awesome. Let's transition a little bit. So we talked about audiences. What about creative? How are creatives on YouTube different than creatives on Facebook?

Matt:

Yeah, I could kick us off there as well. What it tends to be in terms of user behavior on social media versus YouTube, on social media, it's a lot more short attention span. People are scrolling through their news feed, and shorter, more promotional content tends to do a lot better on Facebook, whereas YouTube, the average watch time for a YouTube video tends to be about two and a half minutes. People are seeking out videos, whether it's a news video, sports video, et cetera, and then they're dedicated to watching that for the next couple of minutes. So to get ahead of them with a longer form video works a lot better on YouTube than it would on social media. So on YouTube we have-

Brett:

Right. I mean, kind of the goal on ... Just to riff on that for a second, the goal with social media is to scroll. That's why I'm on Facebook. I'm scrolling. The goal of YouTube is to watch. I came to YouTube to watch something, and so I'm potentially going to stick around with a video a little bit longer.

Matt:

Yeah. So the opportunity to really tell a story and have a little bit more of a narrative there is a lot broader on YouTube. You have a lot more possibilities there, whereas on social media, Facebook, you might not get that chance. You scroll to it, it charges you, and then they don't even watch it.

Bill:

Yeah. To be clear, I love Facebook advertising. I think-

Brett:

Yeah, me, too. Me, too. Yeah. I'm glad you mentioned that, Bill, because we are not anti-Facebook. Facebook and YouTube together are an extremely powerful combo. I think the reason we're calling out the differences is just because people overlook YouTube, and it's a really powerful complement.

Bill:

Exactly. Exactly. Or don't know the full capabilities of YouTube. So Facebook is a wonderful platform because it's in a feed, people are engaged, it's got the social proof right there. You can design your post. It can communicate your brand. It can communicate a call to action. All those things are really great. Some things about Facebook that are different from YouTube is ... One main thing is the audio. So the audio is off by default when it comes to a Facebook feed. Your audio is on on YouTube when someone gets your YouTube ads, so it's more engaging through both visual and audio.

Bill:

The other thing is Facebook, somebody ... Let's say it's a re-marketing ad, someone who's been to your website, you're trying to re-market to them to get them to come back and buy. I might be reading a post from one of my friends or something like that and the Facebook ad is in my window. One pixel is showing, basically. Facebook regards that as a view, which that's fine. Whatever they want to do to measure their ads is fine. YouTube waits for you to view 30 seconds of the ad before they count that as a view, and you can skip it at any point before that and not pay for that ad. So there's a huge advantage to YouTube in that you know that someone was looking at that ad and watching that ad versus on Facebook you can make assumption they were.

Brett:

Really good. Awesome. A big question that a lot of people ask, I hear this over and over again when I'm speaking at events or talking to people that are new to YouTube, is what about production value? How much do I need to spend? How important is production value? So who wants to kick us off there?

Derek:

I think production value is negatively related to value and content that you're providing within the video. Obviously, there has to be some degree of purpose and intent when editing and putting this stuff together. But if you're providing value and you're providing content to the user, you can get away with certain things when it comes to production value that would be nice to have but can potentially be a little bit expensive. A perfect example is user-generated content, right? Sometimes, brands will ask their previous purchasers to generate a review for them and film themselves doing a review and that is a huge X factor because not everybody knows how to film themselves, not everybody knows the selfie camera, lighting, audio-

Brett:

Not everybody can create an angelic background when they're on video like Derek.

Derek:

Exactly. Yeah.

Brett:

Exactly.

Derek:

Exactly. Correct. Not everybody has the 24 megapixels on hand. So for user-generated content specifically, the goal there is to provide the content and the social proof that the product actually works, and having that in the video provides that kind of validation that you would need for your brand to showcase it as successful and something work investing in or at least worth clicking onto to then go learn more on the website and then make a decision based off of what they learn there versus something like perhaps, like Bill mentioned, the Budweiser Super Bowl commercial, where there's not necessarily too much of a brand new content in there. It's just more so like, "Hey, we're Budweiser, we're awesome, we're a staple of America, but we're not going to necessarily tell you anything new about us."

Brett:

"We have Clydesdales."

Derek:

Yeah, exactly. So it's something a little bit more informative and more providing something for free to the user, which is value, for them to then engage further with you down the line.

Heidi:

Mm-hmm (affirmative).

Brett:

Cool.

Heidi:

And I have to also say, it's never been easier for an advertiser to get into YouTube right now because gone are the days when you had to hire a production company to film your shoot. I had a client last year who filmed some amazing, winning, high quality, high production value YouTube videos using their iPhone 11. The reality is, is that if you have a great script, if you have the right background, you've given it some thought, and you have some wonderfully placed products and images, you don't need to hire the studio anymore. You can really take it on yourself. So the barrier to entry for advertisers to get in there and really start campaigns has never been easier.

Matt:

Yeah. Heidi, you hit on that perfectly because I feel like there's so many brands who are like, "I would love to do YouTube, but I don't have the money to afford a big production company." And exactly what you said, iPhones nowadays have great cameras where you can shoot a lot of that stuff. Production value is not the end all, be all. It's the story and the storytelling, the narrative, having a strong call to action. That's what really sells. I've tested it with my own accounts and then just seen case studies across the board. It's somewhere in the middle. Usually not the highest, most expensive video isn't always the one that performs the best. So you don't need something that's $100,000. Maybe it's $2000 or something like that. It's going to vary based on your brand, but try to get something out there. It doesn't have to be super expensive to be successful.

Heidi:

Mm-hmm (affirmative). And sometimes those native formats, that kind of organic material and content, that's what people resonate for. Because when they're on YouTube, keep in mind, they're on there for a couple reasons. I like social media. As Brett mentioned, you're scrolling, you want to get to the next thing. You're on YouTube to either be entertained or to look up something to learn something in regards to that. So that content that organically lends itself to that type of usage does really, really well.

Greg:

Absolutely.

Brett:

Yeah, and some of the things I'm hearing you guys saying is some of the most powerful elements of your video ad are not expensive to produce, like testimonials, like UGC. We had a client that Greg and I worked on together, an automotive client, that spent millions on the platform, and their core video was all user-generated content. Now, it was edited. They did use an editor at a studio and it looked good, but almost all the video was user-generated, but it was super powerful. So what you say and how you say it is very important. How much you spend to get there is not as important. There are cases like ... Hey, we shout out to the Harmon Brothers, and some of those super high production value videos can work, but they also can fail. So it's better to test and iterate with a smaller budget in my opinion, and then, yeah, maybe you do land on a video that costs $75,000 to produce and you can go to the moon on it, but you don't need to start with that. I think, Greg, you were about to say something?

Greg:

Yeah, I was going to double down on, I guess, one element here, that, as a strategist, I think one of the most important things is to make sure that you have a good messaging strategy, that what you're trying to communicate with that video, one, speaks to the target audience, is compelling to them, and, in particular, is relevant to them with respect to where they're at in their buying process. Where are they at in that conversion cap? Is it awareness? Is it consideration? Or are we trying to convert with that specific video? So I think making sure that you start with a good messaging strategy that'll guide creative development can trump the overall cost and production value.

Brett:

Yeah. I also just want to underscore, we're not anti-studio, right? We've built a creative department now at OMG Commerce. We have a seasoned 17-year veteran in the advertising space running our creative department, and we've got partnerships with video editors that have created hit TV shows and done amazing things. So we have the ability to create some fantastic stuff. But just to underscore our point, you don't have to spend a lot, right, and we can test and iterate. It is more about the strategy, to Greg's point. It's more about what you actually say, to Heidi and Derek and Matt's point. Anyway, there's lots of ways to be successful, and the key to success isn't spending tens of thousands of dollars on production. So great, awesome. Really good stuff, guys. Appreciate that.

Brett:

Let's transition now. Let's talk about those first few weeks of running YouTube because that can be scary, right? We're full of anticipation and nerves, and we just can't wait to see what these YouTube campaigns do after we launch them. It's still one of my favorite times. We get the campaigns all prepped and ready, we have our audience strategy and our message strategy, and we flip those things live. For me, I still just want to sit and watch. I want to watch and see how it goes. But what are some of the metrics in the first couple weeks we need to pay attention to to know are we on the right track, are we moving towards success as we would define it? So what are some of the metrics that you pay attention to in the first few weeks?

Heidi:

We have a couple of metrics that we use. I know Sheila has a lot of information about this because she does a lot of optimization in the first few parts of our campaigns probably better than any specialist that I know. She can speak to some of the metrics that she uses. But, for us, I know those core performance metrics that we look at are definitely the views because those represent the number of times someone's watched or engaged with that video ad that you've spent so hard all that time making. Then, also, the view rate. View rate shows you number of views that your video had received and can be a big part to determine how successful that algorithm is to optimize. The cost per view is also a big one. So those are the core performance metrics that we start with. Then I know Sheila does a great job with the others, so I'll let her speak to some of the others that she works with.

Sheila:

Yeah. So those were kind of the main ones that I was going to mention as well, but I think that really does speak to that there are ... I say look at all of them. I know that's the easy answer, the easy way out, but the ones that-

Brett:

Spoken like a true Google specialist. "All the data's important. I want to see everything."

Sheila:

All of it. But Heidi made a good point that those are going to be your base. I would take it into a scenario where, let's say, your view rate was a little bit lower. I would then dive in a little bit ... No, not your view rate, sorry. You have good views, but you're not really getting the conversions that you were thinking. I think it's important to maybe even take it a step deeper, and you could take a look at your video play to percent to see, whether it be ... I think the labels are 25, 50, and 100. I could be very wrong about that. But looking at where people are dropping off, are they dropping off at that first 25% marker before that, and then being able to see, "Okay, should I be making sure that my hook or whatever is in the first 15 seconds of my video?" Yes, that is going to go into the important elements of your YouTube video, but definitely taking a look into that, how far are people getting into my video before they're dropping off. So if you have a good view rate but you're struggling with your conversions, that could be another place that you could go and look and potentially identify an issue in your video.

Heidi:

And we have the other second part of it, too, which is your click performance. Though, as advertisers, we want people to view our video and then hopefully come to our websites, either submit information to become a lead for us or a customer. So that click performance, those metrics that are super important to look for, the number of clicks, so the number of times that someone's clicked on your video, that's a big one, and then your click-through rates, so the number of clicks that your ad receives just divided by the number of times that had been shown, and that's always shown as a percentage in Google. But-

Matt:

Yeah. And every one of those metrics tells a little bit of a story, so your click-through rate tells a lot about, "Do I have an engaging call to action," not only at the end of the video and throughout the video but the actual button. So maybe instead of saying, "Learn more," I need to say something a little bit more engaging and speaks to the user a little bit more. When you look at view rate, and like Sheila was talking about, you can see what part of the video people are dropping off, and if they're dropping off really early, then maybe we get back to the client and say, "Hey, we need to rework this video a little bit to try to change this element." If it's really sharp at a certain point in the video 50% through it, then that's something you could also look at. Every metric tells a story, so it is important, like Brett said, to look at everything and see what you can pick out there, especially in the early stages when conversions might be low and you don't have a big enough sample size to really draw anything too conclusive.

Brett:

Yeah. Yeah. Really good. Yeah, because, hey, view rate is a little low. Percentage of people served the ad, it's low, the percentage that actually watch it. Well, then maybe your hook needs work or you're not getting ... Going back to Bill's point about a story arc and pulling the climax to the front of the video, maybe you're not doing that well. Or my click-through rate is really low. Well, to Matt's point, yeah, there's not an engaging call to action. You're not compelling someone to click. Or maybe I'm getting a lot of clicks but the conversion rate is low. Well, maybe then it's something about your offer, something about your landing page that's not actually completing the deal. That's where you need to make sure you watch Kurt Elster's presentation on how to optimize your landing page.

Brett:

But, yeah, all the data tells a story, and, ultimately, we're a direct response agency, right? We're all about hitting a CPA target, scaling at that CPA target, so CPA is what matters at the end of the day, no question about it. If my view rate goes down or my cost per view goes up but I'm hitting my CPA and I'm able to scale, then I'm a-okay. But these other metrics do tell the story, and they help you diagnose what you need to improve on and what levers to pull or what changes to make to make things really work. So awesome. Good stuff there. Appreciate you guys on that one. Moving right along. So how long does it take to start hitting your CPA goal, right? Because CPA, that is the metric to rule all metrics when you're talking about direct response. How long does it take to start hitting your CPA target?

Greg:

Yeah, so I will address this and look at it from a bigger picture perspective as well. This is an area where OMG really excels, and we've developed internal best practices, I think, that guide us along a very systematic launch process that helps improve the overall success of our clients. First of all, if you think about YouTube, there's, for all practical purposes, unlimited inventory and therefore potential for unlimited spend. So the first challenge is how do we launch campaigns for a client and manage that so we have a controlled launch, we create the best opportunity for success, and then we also mitigate any potential campaigns and spend that's not performing well?

Greg:

In doing that, the key is ... And this is relative to a client and the budget and what the potential market is for the products we're talking about. But the key there is setting up, one, campaign structures and targeting and testing of multiple versions of creative so that as we launch we have the best chance for seeing early success and being able to look at those metrics that we were talking about earlier and get a pretty good indication of which are going to perform and which have an opportunity to succeed. In the process that we've established with that, we'll basically look at three buckets, so to speak, as we start evaluating performance. We're talking about in a one to two-week timeframe here initially.

Greg:

The first bucket is, "Okay, these are some creative-audience combinations that are obviously performing. The view rates look good right off the bat. We're getting really close to our CPAs early on, and so these look like they're going to succeed. We're going to let them continue." We may even make some early bid adjustments or create an opportunity to accelerate the success there. Then we'll also use some metrics that will create specifically for that client and say, "Okay, if we have other combinations of video, creative, and audiences that are in this range here, they're kind of borderline, they look like they might succeed but we need more time to evaluate that, and they're in a range that we can afford to let them run a little longer, but they're on a tight leash. We're going to evaluate that daily and see where they land." Then there's going to be some other combinations of video, creative, and audiences that right off the bat don't appear to be performing well. We're simply going to pause and cut those in order to mitigate overall cost.

Greg:

Some of those fence-sitters then are going to potentially tend to trend that way as well, so we'll pause those but then come back to those and reevaluate. Because one of the things that we have to look at is conversion reporting lag, which means the first week we don't have the conversions that we need to get a good CPA for particular video ad and audience combination because of the reporting lag built into YouTube and Google Ads, where we're looking at conversions based on when the click occurred and not when the transaction occurred. Then we mind find later that week and the following week there are some of those that are borderline that suddenly have enough conversions then that they're in the performance range.

Greg:

So we've got a very systematic, methodical process of determining what's working and what's not early on. Google has a 14-day window, they call, of learning for the smart bidder within these campaigns, but we're not waiting 14 days before we take action. Basically, that first seven days, we're looking at the winners and clear losers, and then that 14-day period is probably where the focus is on sorting out those fence-sitters, those ones that may or may not perform well.

Sheila:

Yeah, and-

Bill:

Yeah, and that takes experience, doesn't it, Greg, to have seen enough success versus failure to just know, "This is headed north, this is headed south," before you get to that 14-day window.

Brett:

Sometimes, and I know all of you guys are this way, you kind of become the data whisperers, where you're like, "Yeah, I've got a feeling about this one."

Greg:

That's right.

Brett:

"It's not there, but I think it's going to get there, or it's not there, and I don't think it's ever going to get there." So you kind of start to get a feel for that. What else have you guys seen? What kind of timeframes are we looking at here? When do we start hitting our CPA target? I know there's a couple of short answers there that we can get to.

Matt:

Yeah, no, it's kind of all over the place. Most typically where I see it is anytime between a week and a month. So, usually, you have some great indicators within two weeks and, like Greg said, can start narrowing in on the winners. So you see ad creatives that are doing well, audiences that are doing well, if you're using topics, certain ones there that are doing well, and you can start to narrow in on that. Usually, I see by the end of month one you start to sit in a pretty good place.

Matt:

But I actually, really quick, wanted to touch on one thing that Greg was talking about, which is conversion lag, because that's becoming a bigger and bigger thing here recently. Think about your own user behavior. A lot of times, you might watch a YouTube video, click on it, go to the website, and say, "Okay, this looks cool. I'll come back to it later." You do come back to it later and maybe you purchase it. Or say you viewed a YouTube video and ended up coming back to purchase it. The reason that there's going to be a conversion lag there is because Google is trying to give more credit to what introduced them to the brand in the first place. So it wasn't from thin air that they just searched for your website. It was because of that YouTube ad.

Matt:

When you initially look at your results today, it might look like, "Hey, this isn't doing so well," but you check back in about a week and it's like, "Oh, wow, I got a lot of conversions from that day." So one thing to keep in mind when looking at your CPA goals and when you're going to reach it is to be patient with it and to understand your own user behavior and that that is what everybody's experiencing. So come back, check on it, see how things have changed, and you'll see.

Brett:

Love it. Well, this question I want everybody to answer. It'll be kind of rapid fire, so this could be a very, very short answer, and it's okay if the answers are duplicated from one panelist to the next. But what is your favorite audience type? You can clarify if you want, like, "This is my favorite audience to launch with, this is my favorite audience to scale with," however you want to do it, but favorite audience. Bill, go.

Bill:

Custom intent.

Brett:

Custom intent, which is? A real quick definition for those that don't know.

Bill:

Yeah, you bet. So it's kind of like in-market. That's a common term across Amazon and a number of pay search platforms. But in-market is I'm in the market for X. Custom intent is you as a marketer saying, "I want an in-market but this specific persona, this avatar."

Brett:

So these specific searches, keywords, in market for these particular things. Yeah, awesome. Slaymaker?

Matt:

Bought X but not Y. Brand loyalty is such a huge thing, and so introducing them to new products that you have that they might not be aware of is a huge opportunity to cross-sell a lot of users.

Brett:

Especially when you have a big audience and a fairly large established brand, you start getting more of your customers to consume more of your products. That campaign type, pound for pound, can do some real damage, and I mean damage in a good way. It can be really good. Awesome. Greg?

Greg:

Custom intent as well. One, the new and improved version has additional inputs that you can use to customize your audience, and that's really improved performance. Then it gives you not only the ability to see early success in launching because it's intent-based audiences, people that are in-market for products, but once you have learned what performs there, you can also use that to scale and identify other places and other audiences that you want to go next. So I think it's early success for launch as well as guiding future success for scale.

Brett:

Sweet. Heidi?

Heidi:

I think custom intent is the way to definitely start off all your testing, but because it's been mentioned a few times, and it's no surprise, it's a really great way to target and get in customers and leads, I also want to mention we had some great performance with customized placement. So what that means is going after certain channels that really resonate with your audience. This one particular client that we had, their customers were known to follow some very specific channels and influencers out there. So when we targeted these channels specifically, so having a campaign for custom intent and then expanding on that with specific placements, we were able to really expand other targeting and do well. It's a lot of understanding who your customer is and who they follow, what they want on YouTube.

Brett:

Yeah. It's sometimes overlooked with YouTube, but it kind of goes back to the ... And I've got a traditional media background, but as a TV ad buyer, you're picking programs, right? "My customer watches these programs." You can do something similar on YouTube. It's very powerful and it's often overlooked, so glad you mentioned that one. For sure, Heidi. Derek? Mr. 24 Megapixel?

Derek:

So I think custom intent is something that is basically the meat and potatoes of most strategies, right? Most YouTube strategies that I've worked on, and I think everybody here, has included custom intent to some extent. But I will say that typically what my favorite is and what gives me pure adrenaline when launching is launching campaigns that are going solely off of basic demographic targets, like gender and age, specifically those two. I will say that with the disclaimer of you need to make sure that whoever's watching that knows what they're doing and they have experience and they have dealt with it before because it really does have to be the perfect storm when it comes to launching something like that, right? It needs to be an account with enough historical data in there. It needs to be the right product, and then the right product also has to be priced the right way, and you have to have the right goals in place, too. So there's a lot of moving parts to it, but custom intent, I think, is my old reliable, but then demographic only is the game-changer for me sometimes.

Brett:

Pretty fun. I like that. Adrenaline, the adrenaline rush. Spoken like a true media expert there. Love it. Sheila?

Sheila:

Well, mine kind of could go well with Derek's. After you get that nice base built up with custom intent that everybody's already mentioned, I will veer off of that because I think they've covered just about every part of custom intent. So going off after that base is built there and you're looking for other ways to really take that brand and show it to people who you might've missed somehow with that custom intent audience, if you're not quite ready to dip your toe in that demographic, very wide, broad audience, you could take on testing topics and really taking some topics and layering them in your branded campaigns and things like that and then seeing how they perform and then taking the ones that perform well and then adding them into campaigns in your top of funnel campaigns.

Sheila:

Just seeing the correlation between, let's say, somebody who they're selling ... Your client is selling instructional videos for working out, whether it be lifting or Brazilian jujitsu, and then randomly your topic of smooth jazz music pops off with a bunch of conversions and you're like, "I would've never thought people who were buying Brazilian jujitsu things were really into jazz, but"-

Brett:

And Matt Slaymaker is a black belt. Do you listen to smooth jazz as you're working out, Slaymaker?

Matt:

Not as I'm working out. Working on other things.

Brett:

But the rest of the time you might. Okay, cool. So I derailed you. Sorry, Sheila.

Sheila:

No, no-

Matt:

But, Sheila, that's-

Sheila:

I-

Matt:

That's such a great idea, Sheila, though, about testing topics out on your branded campaign as an observation audience. It's a no-risk type of thing where you can see, people who are searching for us by name and actually converting, how are these different topics doing. Yeah, no, that's great. Then you can take that information over, layer it onto your audiences. Yeah, I love that.

Brett:

So I derailed you there, Sheila. Just, I thought of the black belt thing all of a sudden.

Sheila:

No-

Brett:

So you're looking at topics, and you've done a great job with topics. That's something as an agency we haven't scaled that many accounts using topics, and you're doing an awesome job with it. Did you want to finish your point?

Sheila:

Just that was it. Thinking about this question, I had lots of time to think, and I was trying to get creative with it. But I just realized when I've got that base and I'm like, "Okay, back to the drawing board, how can we keep spending efficiently, obviously, or keep testing," that's somewhere that I always end up because there's so many pre-filled topics that Google provides. It would be a waste if we didn't at least touch them.

Brett:

Yep. Yep.

Matt:

Yeah.

Brett:

Awesome. Love it. Fantastic. I'll chime in here, too, because I've got to. It's not called this anymore, but custom affinity. I love custom intent, too. But custom affinity, it's sort of Google's version of a lookalike, where you're giving inputs on people that visit this site or this topic or whatever. Build me a lookalike audience, Google, based on that, is sort of what custom affinity is now. It's all just custom audiences. They've dropped the custom affinity moniker. But I love those audiences. With some accounts, those are the audiences that truly scale, but they're not always the best to lead with, although they're not quite as risky or as much of an adrenaline rush as demo only. That's a .. Sorry, Bill.

Bill:

But if you're seeing success on Facebook with an interest-based audience, that's your closet thing to affinity on the YouTube side, so worth testing.

Brett:

Yep. True story. True story. Awesome. Okay. So we are running out of time. Man, you guys are long-winded. Just kidding. This is awesome. But we're running out of time, so I'm going to actually combine the last two questions, and you get to pick one or both in your answer. But what do you do if the first few weeks don't go that well, right? So what do you do if the first couple of video campaigns don't work that well? Then a very related question is what are common hiccups, right? If things don't go well, what usually are the main culprits? So what do we do if the first few campaigns, first few weeks aren't great, and what are the common causes for hiccups or speed bumps?

Sheila:

I think more ... Okay, so I'll be quick because mine isn't necessarily going to be technical. I hate failure. I think most people in business obviously hate failure. But I think it's important when you launch something to realize that this is just a battle within a never-ending war. With Google, there are so many opportunities. Don't take that and don't get discouraged about it. You just say, "Okay, check that off the list, never-ending list of things that I have tried and I can try," and move onto the next thing. Getting a little more technical, I guess I can, is go look at ... Like we talked about, look at your hook. Where is the hook falling in your video, or is there some piece of creative, maybe a character that isn't hitting right with your audience or things like that? I know one of the common issues ... I guess I wouldn't say common, but my most recent failure that I did have with a client was they used a character that was kind of like the beef jerky ... Who's the guy in the woods?

Brett:

Slim Jim?

Sheila:

Sasquatch?

Brett:

Oh, are-

Sheila:

Yeah, Sasquatch.

Brett:

Bouncy, maybe? Oh, okay, got it.

Sheila:

So they used this. But this Sasquatch was terrifying, and the business owner knows. Obviously, he knows, too. He said, "This might not work, but let's give it a shot anyways." He was accurate. So I think going back and, again, analyzing where are people dropping off. Are we even getting the view rates? Then after you do that analysis, take that knowledge, understand there's many more opportunities, and then launch a new ad, launch a new video, test a new audience. There's endless opportunity.

Heidi:

And I think one of the things that we just have to say, for being in this business for as long as we have, first thing, if you do not see conversions populating in your account, what do we do? Come on, guys.

Heidi:

We check our conversion tags. So make sure that tag is working and recording data properly. Once that's cleared up, use those nice metrics we were just talking about earlier to really clue you in as to what to focus on next. So if you're not getting conversions, look at your audience. Is it bringing in the volume of clicks that you need? Do you have enough of an audience to serve ads? If you do and your ads aren't getting great view rates, like Sheila said, look at that first part of your ad. Look at the hook. Is it compelling enough to get people to really view, take that next step, or are they skipping? The other part, look at your CTRs. Is your call to action strong?

Heidi:

If your conversion rate stinks and all those things are good, look at that landing page. What's going on with your offer, with your landing page format? Is it resonating with the video? All those connections can really help you alleviate all those little hiccups that can prevent you from getting to the next spot and go from getting success, like Matt said, in that first week instead of waiting a little bit longer, which sometimes can happen when you're testing them.

Matt:

Yeah, even in the biggest failures-

Brett:

We can't underscore enough the value of conversion tracking, and so you got to set it up properly, got to do test purchases, got to check and re-check. Don't get a week or two into your campaign launch and then realize, "Oh, conversion tracking." All right, well, then you've wasted time and money and all kinds of bad things. Yeah. Go ahead, Slaymaker.

Matt:

I was just going to say, even to go off of what Sheila and Heidi were saying, even in your biggest failures, if a campaign fails, that doesn't mean that every element within the campaign was a failure. Just dig into your data and find out what were those things that did work well. So it's like, "All right, well, we didn't get many conversions, but we had a really strong click-through rate. Let's keep that element. So maybe our call to action is really strong, but maybe it's something with the landing page or maybe it is something with conversion tracking." So try to identify what are those wins, even in the losses.

Brett:

Yeah, or maybe this particular audience didn't work well, but as we drill into some of the segments and combinations, we realize, "Oh, but there was one pocket of this audience that did great," and so now we know what to do as we build our next audience to test.

Matt:

Definitely.

Brett:

Cool. What else? Common hiccups and/or what do you do if the first few weeks don't go well?

Bill:

Yeah. So I see a number of accounts that we don't manage through our sales prospecting process where they're running custom intent, and I know that we sat here and four out of five specialists recommend custom intent. This is just a shell of an idea. It's just a tool, the way you build it, comes down to a little bit of geeking out and expertise. What is happening with these keywords? What do they mean to the robot that's running these ads and finding you an audience? You can't just throw custom intent out because it didn't work. That would be like, "Oh, I hired a construction worker and he used a circular saw and we hate circular saws now." It's how you use it.

Brett:

No circular saws. I love that. That's a good analogy.

Bill:

Yeah. So just make sure you're geeking out on it, testing new ideas within these tools, because you can't just throw out the tool because it didn't work the first time.

Brett:

Yep. Yep. Yep. Because, sometimes, it becomes clearer as you get into that what we thought about the buyer's mindset of people searching for these keywords was actually off, right? We may have thought, "Hey, I want to target buyers of a related product." Then we realized, "That's actually not our buyer. It's actually people that are going over here." So, yeah, don't throw out the tool just because you were using it incorrectly in the beginning. It's a great analogy, Bill. What else, guys?

Derek:

A lot of people also tend to think of ... I've worked with clients in the past where they're like, "Well, just increase this bid or just do this specific thing and that will fix this other metric," and they're not looking at the entire picture and not realizing that YouTube is not necessarily a mathematical equation or a scientific thesis. It's also kind of an art form, right? So understanding that it's both and being able to dive in and look at the metrics and say, "This is what the numbers are telling me," but then also looking at the more human side and artistic side when it comes to, "How does my creative resonate with the user? How do users that are searching X, Y, and Z term fall into a custom intent audience I may or may not have built?"

Derek:

I think that is all something that needs to go into, first of all, the plan that you set up when you're first launching but then your evaluation process in that first and second week when you're taking a look at what the performance may have been. Then, when it comes to just hiccups in general, I would just say be ready for them. Some of our most invested clients, most hands-on clients that you would never think would lose conversion tracking for a day have lost conversion tracking for a day.

Brett:

Developer makes a change, and, oops, they drop your code, and you're like, "Ah, why did you do this?" Well, I'm the developer. I don't care about your code.

Derek:

Exactly. Yeah, exactly. So the more that you can invest on that front side of the art and the science and building the momentum up the right way, the harder it will be for those little hiccups to make a dent into the momentum.

Brett:

Yeah. I would, just to piggyback on that, it's really good advice, Derek, thank you, is that expect hiccups. They're going to happen. If you're building something great and you're trying to scale, there's going to be little hiccups. We try to build the right foundation to minimize hiccups, but you're still going to have them, and you just roll with it and you adjust and you know what to do and you move forward. G-Money, you want to close us out?

Greg:

Yeah. I look at it very systematically. In other words, analyze the data, what's working, what's not. Make adjustments, whether that's campaigns, bids, creative. Then test, test, and re-test. What's unique about the platform is that it is very efficient and very easy and low cost to test multiple variants of the creative, the audiences, the different combinations. So I think the key is revise and re-test.

Brett:

Yeah, love it. I did let everybody answer that, right? Sheila, you started us off, is that right? Okay, awesome. Man, fantastic job. I wish I had a standing ovation sound effect that I would play right here. That was awesome, guys. You brought the thunder. Proud of you guys and impressed anyway, but this was just next level. It's always cool to get you guys all in the same room talking, well, virtually, all in the same virtual room talking. Super, super fun. You guys brought the value. So thank you, guys, well done, and we'll have to do this again sometime soon. With that, our journey is almost complete at this virtual event. Stick around, though. Next session coming up momentarily.

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Prime Day 2021 was a year of firsts.  It was the first year Prime Day took place in 2nd quarter.  From 2015 to 2019 Prime Day was in July.  In 2020, due to the pandemic, Prime Day was moved to October and became the de facto kickoff to holiday shopping.  

This year was also the first year that Prime Day experienced year-over-year growth of 10% or less.  But when the 2-day event brings in $10-11 billion in sales, any year-over-year growth still represents HUGE growth in real dollars.  

For this episode, I brought in OMG’s Amazon Director Chris Tyler to help unpack what we experienced with our clients this year during Prime Day.  Here’s a look at what we discuss:

• Some surprises we saw in the OMG client sales data
• How advertisers may have been more excited than shoppers this Prime Day
• Prime Day may not be a great fit for every seller - some categories crushed it during Prime Day, other categories were “meh.”
• Why inventory issues for many sellers influenced the prevalence of deep discounts and likely took some of the urgency out of Prime Day shopping.  
• The strange shopping behavior we saw during day 2 of Prime Day. 
• How to maximize Prime Day or holiday shopping by thinking Full Funnel with your ad approach
• Plus more!

‍

Chris Tyler

Via LinkedIn

Mentioned in this episode:

Amazon Prime Day from Statista

OMG Commerce Blog

Sales Force Prime Day 2021 Recap

OMG Blog Prime Day Prep

‍

Episode Transcript:

Brett:

Well, hello and welcome to another edition of the eCommerce Evolution Podcast. I'm your host, Brett Curry, CEO of OMG Commerce. And today we're talking Prime Day 2021 recap. What happened with Prime Day this year? Lots of really interesting things to uncover and dissect. I think some things that may be a preview to what we're going to see the rest of the year, and also some things that maybe considered for Prime Year next year, potentially. We're just going to unpack the data and the trends.

Brett:

No better person to have on the show than the Director of Amazon and OMG Commerce, Chris Tyler, a crowd favorite. Chris, how are you doing? Welcome to the show, man.

Chris:

Doing well. Thanks for having me.

Brett:

Yeah, absolutely. So always good to have you on the show. First of all, Prime Day, it has become kind of a summer holiday for us in retail and us, people that enjoy shopping, but today or rather this year, Prime Day was different. And so I thought it'd be fun to do a quick history of Prime Day, like 15 seconds and what we've seen in previous years and then let's dive into this year, because this year was a different beast for a couple different reasons.

Brett:

So 2015 was the launch of Prime Day, and a lot of people don't know it was the 20 year anniversary of Amazon. And it was one of those events fabricated by Amazon really to drive prime memberships, and that's what it did for so many years. You'd have millions of new people signing up and trying Amazon Prime because of Prime Day. And we know that prime memberships really fuels Amazon's flywheel.

Brett:

So for a long time, it was about building prime memberships. Now, it's just a massive sales event. It's bled into other retailers jumping on the bandwagon. You got Walmart and Target, Best Buy and every other retailer imaginable also doing big deals around Prime Day. But this year it was different. So historically, Chris, Prime Day has always been in July, the Christmas in July type of thing.

Brett:

Q3 is not a good quarter for retail typically. So last year was different as well. Last year Prime Day was in Q4. It was moved to October because of logistics issues caused by the pandemic and Amazon just not being ready, the infrastructure not being ready to handle Prime Day in July. So it got moved to October. Nobody really knew what to expect, right?

Brett:

It's the first time the Prime Day has been in Q4 and it really launched the holiday shopping season, likely pulled forward some of the holiday purchase activity last year. So a couple of interesting things from last year and just to show how much this event has been growing year over year. 2019 versus 2018, Prime Day sales grew about 70% according to Statista, but then about 45% year over year growth from 2019 to 2020, right?

Brett:

But again, you're comparing apples to oranges here. 2019 was the normal July date, 2020 was October. So it was Q4, all kinds of interesting things. And then this year, Chris, we got the announcement that Prime Day was moving to June, not July. And even though it's a few weeks difference, it's a different quarter, right? Moving to Q2 instead of Q3, which was the norm and Q4 last year. Did you hear any speculations as to why it was moved to June?

Chris:

Honestly, I did not. We didn't find out till last minute. At least it's better than last year where it seemed like a week before they said, "Hey, we're having it in October." So at least they told us a few weeks before, but I think Amazon kept that close to their chest.

Brett:

Yeah. Our Amazon reps do a pretty good job of keeping us up to date, but, and it makes sense, they don't want word to leak about Prime Day too early because then people wait for some purchases, right? So you want to give enough time to build hype and make it a big event, but not so much time that you kill sales four weeks out from Prime Day.

Brett:

I heard a couple of different pieces of speculation who really knows, but this will help Amazon with their comps, looking at Q2 this year versus Q2 last year, because Q2 2020 just had an amazing spike because of the pandemic, especially on Amazon because stores were closed. So this will actually help Amazon probably comp pretty well Q2 of this year versus Q2 of last year. That's probably not why Amazon did it, but that is an interesting side note for sure.

Brett:

A couple other interesting things as usually and this is in July, you got back to school sales that could be a part of this. It's not really feeling like back to school time, right? This is June. Summer still feels like you got a lot of runway left in summer. So not as much of a back to school event. So just an interesting event and timing and all of that.

Brett:

And so we're seeing numbers that Prime Day 2021 versus 2020 grew anywhere from nine to 11%. I saw one report showing it didn't grow at all, but I think that was a bit of an outlier as far as the report goes. So 10% growth or whatnot over last year, but we're comparing a June event to a Q4 event last year. It's pretty hard to compare this as apples to apples.

Brett:

What were some of the... And one cool thing too Chris, and this is why I had you on the podcast. OMG is big enough now. Our client base is big enough that we have a considerable amount of data that we can look at from our own clients. Advertising data, sales data that really paints a nice picture. It's kind of a microcosm of Prime Day and third-party sellers globally. And so let's dive into this a little bit. What were some of the key takeaways, the big takeaways from Prime Day this year?

Chris:

Yeah. Great question. I don't know. To your point, we've got enough clients advertising, spending data, to understand, "Okay, what are the trends that we're seeing as an agency?" And so the data we pulled was based off of the two weeks prior to Prime Day this year and weekly segments, each Prime Day individually.

Chris:

And then what we're going to do is track the weeks after. And we do have the week post-Prime Day, but I will say in the advertising there's usually attribution lag, so that may be somewhat different in the coming days. And then that is to give us a picture of post-Prime Day versus prior to Prime Day and then obviously Prime Day in between. And we did the same thing last year.

Chris:

So what we wanted to look at, at the start was we know nothing's the same in the sense of last year we had a big COVID E-commerce spike in the summer and then Prime Day was actually like you mentioned, Q4, which really just blasted the last three months of the year. And then this year it was in June, which worth noting that we started to see in April a lag in sales or softness in performance, as well as..

Brett:

April was really strange across the board. Even non-Amazon sellers, April 2021 was pretty soft.

Chris:

Yeah. And that led into May and June being a little bit better, but we're not seeing that E-commerce push that COVID gave us. So then year over year comps are kind of wonky within that. And so what we first looked at then going back to the Prime Day data was year over year, what were the differences?

Chris:

And it was really interesting to see last year, the week prior to Prime Day saw a boost in impressions and traffic between 10 and 20%. This stayed, obviously pre-Prime Day, it saw a big push, but then post-Prime Day it actually increased again, 15%. And so traffic was there and then in the same side, total sales.

Brett:

When we started, Chris, you said there was an increase in impressions?

Chris:

Impressions. So we wanted to figure out, "Okay, is the traffic there? And then within that, what are the sales doing? What's the CPCs? What's our ad spend ratio to total sales?" And we found last year, the impression were boosting even prior to Prime Day and then stayed post. What we found this year-

Brett:

That makes sense because it was the beginning of holiday shopping.

Chris:

Right. Right.

Brett:

And so this is an interesting take. So we've got our line of sight into Prime Day and what happened is really through the advertising lens, right? But if you see a lift in impressions, more ads being shown, it means there's more eyeballs there, right? This is a really interesting perspective. We're seeing what retailers are doing, what advertisers are doing based on response to shoppers, basically.

Chris:

Right. And then for us as advertisers it helps us understand what is the pie we're looking at, and then what tactics strategies we are using to formulate, "Okay. How much can we on that in terms of the goals for our clients?" And then in Prime Day this year, what we found was the impressions and clicks, correspondingly, saw a very small decrease. So in our mind they were flat a week before Prime Day versus that preview period, where last year we saw a boost. And then going into Prime Day-

Brett:

A week before Prime Day this year was flat or potentially down just a tiny bit-

Chris:

A little bit.

Brett:

... to the week before Prime Day, last year. So that leading up period.

Chris:

Yep. Yep. And then even to the week before this year, so if we're looking at June 7th, it would be two weeks prior, and then June 14th would be the week before Prime Day. They were about the same in impressions and clicks. Where last year we saw a boost week over week going into the period right before Prime Day. That said, there's window shoppers, but traffic's coming in, it's building.

Chris:

We didn't get that this year. And so that was a sign that there just was a smaller audience whether it's the fact that it's in June, that with COVID, restrictions are being eased. People are traveling. It's the beginning of summer, people aren't thinking, like you said, buying, where July had more of an impact, I think, than October. It was just... That is the mindset. So we noticed that going into there.

Chris:

And then when we hit Prime Day, I would say that the numbers corresponded to this year. So if I look June 21st and June 22nd, those sales metrics jumped between 108% and 126% compared to the period right before, right? And those are similar to last year's comps. When you look at Prime Day versus the week prior to Prime Day.

Chris:

But what happened, like we mentioned, was the traffic clicks and even total sales were softer prior to Prime Day this year versus last year. So the ratio's there, but that's why we're only getting nine, 10% increase is because it was already soft before Prime Day this year. And it was a lot of data ..

Brett:

.. look at the data, right? We want to see how did Prime Day do this year versus last year, but also how did Prime Day do compared to the weeks leading up to it. Because that is really what you want to look at, is what's the Prime Day lift, right? You got this baseline of sales that happen on Amazon regardless of whether there's a big event and then measuring the lift of Prime Day. That's super interesting. So 108 then 120, is that what you said ..

Chris:

Yeah. So it was around 126% day one, I think 108, 114% day two, which were very comparable to last year's percent ratios though overall the sales just went up a little bit compared to last year, as you mentioned. We did find... And our assumption is this is based on a smaller amount of impressions, is CPC went up about 25% first last year.

Chris:

And this was prior to Prime Day, but especially on Prime Day, I think it was on the high end of 30, 35 and ACoS went up about 10%. And what I mean by that is ACoS went from 30% to 33%, that's a 10% increase, but I don't want people thinking 30 to 40.

Brett:

That's 10 points.

Chris:

Yeah. And so it was much more competitive, less space, but more competitors in that space is what we found. And so we were paying more to get the same traffic. Conversion rates were comparable, but because we had to pay more for each click, that's the relation to why ACoS increased.

Chris:

And then the biggest thing that we want to track ongoing, we're going to do this weekly. We'll put it in our blog. I think it's something that anyone listening to the podcast will want to follow along, is we want to know what happens post-Prime Day, because last year it was amazing, right? It makes sense. It's Q4. And I want to say, even in 2019, the numbers were up post-Prime Day, but it's only one weekend and so I don't want it to be like the norm per se, just yet.

Chris:

But what we have found is looking at 23rd through 29th, that ACoS is higher, that TACoS is higher. Conversion rates are lower, which makes sense than for ACoS and TACoS, and then click through rate is 5% lower, so it's nominal in my mind. And then CPC is about 10 to 15% higher when we look at May and April.

Chris:

And so we're still finding that there's a tail end of that push that everyone made for Prime Day, that it's still there, but the customers are at least at the same level. And so we're paying more for the same traffic and then the sales are not increasing with that. And so it's a more volatile space to look at.

Brett:

So if I had to simplify some of this, advertisers are maybe jumping on Prime Day to a higher degree than customers are this year, right? Prime Day still grew year over year by almost every account, which is pretty significant, right? And we start talking about billions and billions of dollars over a two day period. This is a massive event.

Brett:

And so the law of big numbers kick in, right? You can't grow 40% year over year forever, right? That does begin to slow down at some point. You start to reach some market saturation type points. But I think the data we're seeing is that advertisers know. We're conditioned, we're trained, we know that we've got to be aggressive to not miss out on shoppers for Prime Day. So we're bidding more, right?

Brett:

So CPCs are going up. We're really trying to go get those sales, but it sounds like there's more advertising competition and not the same year over year growth that we've seen on Prime Day. So some things are becoming more inefficient, it sounds like.

Chris:

100% and I appreciate you taking all that data jargon and putting it back in a nice way for the listeners. I would add to that, and this is its own discussion, that in general the space is getting more competitive. Amazon's releasing more placements for ads and there's benefits to them, but it also means that there's more places to spend money and more competitors that will want to do that.

Chris:

So even taking out June, if you look at April, May versus last year, I think CPC was still up 10 to 20%. So it's not strictly Prime Day related, but it is highlighted because the traffic wasn't there. And so then it impacted really everything, especially conversion rate and total sales.

Brett:

Yeah. And then that is just the trend, right? As the third-party marketplace becomes more and more competitive, that does drive up CPCs. Eventually that does self-regulate to a certain degree. We've seen this one on the Google side, we see Google Shopping, Google search for retail clicks. They do hit a top end, right? Where just the economics no longer makes sense. You can't pay $7 per click with conversion rates of one to 2% for an item that cost 30 bucks, right? You just can't can't do it, right?

Chris:

Yeah.

Brett:

So those CPCs will regulate a little bit, but when a big event like this happens, advertisers get aggressive, right? And they just want to go for it. One thing that I think will be interesting to unpack a little bit is the categories, right? Prime Day isn't a huge event for everybody. This is becoming increasingly clear to us.

Brett:

Some of our clients see massive jumps on Prime Day. Others do not. And I was looking at some data. I've got actually the Salesforce recap of Prime Day, pulling it up right now, and this will probably be no surprise, but one of the largest segments of growth, year over year growth, was luggage and handbags.

Brett:

So luggage was up about 74% Prime Day 2021 versus Prime Day 2020. Totally makes sense. People were still not fully thinking travel even in October of 2020 and that is coming back, so no surprise that that grew. But talk about that a little bit, Chris. We saw some real disparity. Some clients crushed it in Prime Day. Other clients were like, "Meh, this is a normal day."

Chris:

Yeah. So I think at the category level, some of the bigger ones we saw jump were gift related items based on price points that I think their AOV was 20 to 40 bucks so that they were able to run some deals with those products that brought in good volume, but also allowed for customers just kind of jump in on, "Okay. Yeah. I can just buy that, right? I'm looking to buy anyways."

Chris:

You've got the two days in Prime Day compared to maybe somebody selling a product for 800 bucks. And I would say categorically-wise though, our best performers were the toy category. We had a couple new electronic space that did see really good numbers. And one of them ran a good amount of deals alongside pairing that with our DSP offering and really had a full funnel approach for that leading up to Prime Day. And they saw a three to 4X growth and they didn't really see a low prior to Prime Day, so those numbers were phenomenal.

Brett:

Yeah. So talk about that just a little bit. That's kind of intriguing. You mentioned a full funnel approach leading up to Prime Day. Some categories you may just try to do a little better over Prime Day but some categories you can really capitalize on Prime Day. What was that full funnel approach just kind of high level leading up to Prime Day?

Chris:

Yeah. And I would just put it out there that we have on our site the blog. I can walk you through what that will look like, if you're curious, after the podcast, but ..

Brett:

What was that blog? Is that the blog that Amber did on Prime Day?

Chris:

Yeah. The Prime Day Prep.

Brett:

Yeah. Prime Day Prep. So search OMG Commerce Prime Day Prep blog. You'll find that also linked to in the show notes.

Chris:

So the full funnel really starts with a mixture of DSP, Demand Side Platform alongside PPC within seller central.

Brett:

Running display ads and then the standard PPC.

Chris:

Yep. And then any external traffic and then obviously product page readiness. And so DSP, that was a factor, especially with this client prepping the audience and traffic two weeks prior to Prime Day. So focusing on competitors that were similar to their products that they were running deals for, that we knew our price was going to slay and so building an audience of those people who viewed the competitor and did not purchase as well as building our own customer in-market audience.

Chris:

People in-market for keyboards or just bought a computer or whatever it might be that they need a corresponding product so that when Prime Day hit, we weren't scrambling to say, "Who are we going to target? Are we just going to update?" So we actually set a plan in motion to have that funnel, build the audience that we wanted to highlight.

Chris:

And then also build correspondingly a retargeting audience then, because anyone who goes to that product page of our brand that we're running and did not buy, we can target again. And really we push the creative and then the budgets during both Prime Days to say, "Here's the deal. We know you haven't bought anything based on the audience we've built." And we found the results there just phenomenal.

Chris:

And then a lot of that does tie... We worked with this client months before to make sure the product page were ready, that they've got a storefront up and running and it's prepped with a deals page and then they've got posts they're going to launch for these products. So it was full funnel on the ad side, but also on the organic side that everything was ready there because you don't want to just use PPC as a weapon. You want it to compliment the foundational piece that you should have in place.

Brett:

Yeah. I love it. And this was a strategy that works for holidays. So as we're preparing for holiday, which is coming up, right? We should be laying the groundwork right now for holiday. We've got a webinar coming up for Cyber 5 Prep, stay tuned for that. But yeah, this idea of, hey, remarketing is always your cheapest form of advertising, right?

Brett:

And so we know, and we just talked about CPC is going up 25%, even the weeks leading up to Prime Day. And on Prime Day, CPC is up 30%, right? So it becomes more and more expensive to advertise during those peak shopping days because the advertising competition is so high.

Brett:

So if you can start to seed some audiences, reach some in-market audiences. We do this on the YouTube side as well, where we try to reach people who're maybe shopping for toys or home decor, or different supplements, whatever the case may be. Seed that audience, get them to visit the site, check things out.

Brett:

Now you've got a big remarketing pool that you can really hit during your Prime Day deals and get them for a lower cost and get them to convert with your product. So thinking full funnel totally makes sense. That's definitely something to file away for next year's Prime Day, but also for Cyber 5.

Chris:

And one of the things I would add to that, it's not new, but it seems like it's new in some of the forums we're having and what we're hearing from advertisers is getting traffic from external sources to Amazon. And we talked about impressions, clicks were lower this year until the thought was, "Okay, where can we get ideally the same CPCs or better."

Chris:

And one of the ones that we highlighted and run as Google to Amazon in terms of running search ads on Google doc to Amazon product pages or storefront. And not to go on a tangent, but there's Amazon attribution, which allows you to track sales return. And storefront also has tags that you can add to that if you run any pages on your storefront.

Chris:

And we found we go after low-hanging fruits, so searches on Google that have Amazon in their query. You can get 10 to 40 cents CPCs, or better put probably 30 to 70% less CBCs than you have on Amazon. The conversion rates are lower, but you're building traffic.

Chris:

I look at it as almost like how DSP has mid-funnel where you're building a retargeting base and you're also building awareness because people are coming to Google to search maybe mirrors on Amazon or a Derma Roller on Amazon. And then, one, I don't know why they search on Google, but they do. The search volume is there. You can ..

Brett:

So people that.. To buy something on Amazon, but they start their search on Google. And it happens millions of times every day. I actually just did a talk with Orange Klik recently.

Brett:

I can link to their interview and Chris you'll help me prep for this, but I pulled data on people who search on Google for bedsheets, but Amazon is in the query, right? So I'm searching for Amazon Prime bedsheets. That was a pretty popular query or whatever. Almost a million searches a month for those keywords related to bedsheets and Amazon.

Chris:

Here's a hack for you. If you're going to do that, just go to amazon.com and put in bedsheets. You're going to figure it out. You're going to get right to what you want to see. I've got a buddy that will put Facebook into the Google search and then click the Facebook link. And I'm like, "You know if you use a dot-com at the end you're right there."

Brett:

So this underscores an interesting consumer behavior, shopper behavior thing. For a lot of people, the web begins on Google, right? That's just where they begin everything. This is where they start. Like, "This is my entrance into the web," and it's hilarious. So one thing I'll underscore here.

Brett:

I think there's been this evolution for Amazon sellers where back in the beginning days of the third party marketplace, you could win by just having a product there and maybe gaming the system and keyword spamming, and doing some stuff to get organic rankings, right? So just have a product, get organic rankings, you make a lot of money, right?

Brett:

Then it became more complex. Now you are having to advertise on... You're doing giveaways, maybe doing a little bit of advertising on Amazon. As things become more competitive, we have to be more sophisticated, right? So what we like to talk about at OMG Commerce is, "Hey, if you're selling on Amazon, you need to have a base of Amazon advertising rights, sponsored products, foundational, sponsored brands, sponsored brand video," I think that is a must now. Amazon DSP for the remarketing side and maybe top-of-funnel.

Brett:

But then you look at other traffic sources. The next frontier that a lot of people are tapping into is Google to Amazon, right? And that's what you're just talking about. It's this incremental growth, it's maybe reaching the shopper before they get to the Amazon category page and before they see all your competitors ads, you can reach them when they're on Google, which is where they enter every site. Thinking about now, this is going to be key for holiday, key for Prime Day next year, a sophisticated approach to marketing and growth versus just, "Yeah, I'll just let my organic rankings do it."

Chris:

Yeah. 100% agree with that.

Brett:

Cool. Other takeaways. And I'm excited. I know you and Amber and team are going to be working on a blog with full recap and stuff, so we'll just be watching the OMG Commerce blog for that. That's coming out pretty soon. But other interesting takeaways from Prime Day this year.

Chris:

What I would mention is we found it interesting on day two. So the whole Amazon team at OMG is like... For those two days, we're just at our computers. We've got eight tabs up, whatever, we're looking at all of our clients.

Brett:

Re-courses, right? You're just ..

Chris:

Deal with the mind type thing but with a better ending. And what we found was the second day was trending much lower than the first, and this was for at least the first half of the day for most of our clients and our assumption was, "Hey, we may end, I don't know, 20 to 30% lower in sales, just based on that first half of the day."

Chris:

And then we saw this climb, a very steep climb, maybe 70% of our advertisers that the sales started to go back up and it was actually higher in that last, let's say, the third quarter of the day. From 4:00 PM to 8:00 PM, the sales just jumped up and we ended up being down maybe five to 10% with a lot of clients actually being up the second day and that wasn't expected.

Chris:

Yeah. We're still digging in. Some assumptions we have is people are waiting to the end of Prime Day and they're like, "Oh, I got to make a purchase. Or there's deals..." There's that fear of missing out that says like, "I am back home maybe from work or I just have time now the last few hours and I'm going to just push through." And the other thing tied to that was we found conversion rates are up around 15% the second day, even though impressions ..

Brett:

Up 15, so conversion rates are up the second day, 15% compared to what?

Chris:

To day one. Sorry.

Brett:

To day one.

Chris:

Yeah. To day one. So they were better there and impressions and clicks dropped between 20 and 30%, but sales only dropped between five and 10 and that's because conversion rate picked it up. And so it seemed like the traffic was more intent on like, "I got to buy." And I don't know if that means set more deals up and I know you don't have full control for the end of the day. What do you do with that? We're still figuring it out. But I think that's an interesting thing we saw.

Brett:

It kind of speaks to the consumer behavior though. We all have FOMO, fear of missing out, but also procrastinators to a certain degree. So, "Hey, the tail end of a sale urgency, I got to get the deal now, or I'm not going to get it." So it does kind of make sense that there'd be a huge push for day one. There's excitement, there's buzz. People are checking it out.

Brett:

Maybe kind of a lull on morning of day two, but then it really picks up after that. So I think you kind of plan your advertising around that a little bit, right? And be watching the campaigns. You can't... I know we weren't because we were glued to our screens, but hopefully people didn't just go to sleep on Prime Day or figure that it was over after a soft morning on day two, because it really picked up after that.

Chris:

Right. Yeah. And to tie to that-

Brett:

But it also-

Chris:

Oh, sorry. off.

Brett:

No, go ahead.

Chris:

To tie to their budgets, right? We prepped and made sure we weren't on a budget. Like you said, we were glued to the screen, but if somebody is listening, they're like, "Oh yeah, max budget midday or before the end of the day on the second day." I think that's a key indicator of maybe reallocation-

Brett:

They missed out. Yeah.

Chris:

Yeah. So thinking about that for next year in a better way that says you don't miss that opportunity.

Brett:

Yeah. It was also really interesting Prime Day is obviously deal driven, right? It's a shopping holiday. We're looking for deals. I didn't see any real deep analysis on this. This was more anecdotal, but it didn't seem like there was an overwhelming amount of deals. I know just talking to friends. I don't know many people that really bought that much stuff on Prime Day this year. We bought a bed for Benjamin our four-year-old, it's an elevated bed with a slide. That was about it.

Chris:

Nice.

Brett:

Last year we did start doing some Christmas shopping-

Chris:

I got one of those too.

Brett:

Did you get? I know I saw it, I was like, "Dude, this is really fun. It's made of metal. I could probably get on it." I don't know if it'll hold my frame. I don't know. Again, this is just anecdotal, but a couple years ago we were buying entertainment center, TV stuff, just getting ready.

Brett:

It felt like a huge buzz. Last year just really felt like holiday shopping, which was cool. But this year, I don't know. It obviously grew and it's still a massive event, but the deals maybe didn't seem as appealing or as amazing as they have in years past.

Chris:

I would agree with that. And I would say for some of our clients that in the past that run pretty steep deals they had inventory issues and they had other challenges that ..

Brett:

So you get inventory issues you just don't discount, right?

Chris:

Right. Right. They're going to sell it anyways. And so that was a balance there. And then others that ran, I'm going to talk about the electronic company, they crushed it, but they put steep deals. They could do it. Inventory was really good. And then a few others that ran deals both 2020 and '21. It was softer this year. And I don't know if it's... Like you said, there just weren't as many good deals.

Chris:

It seemed like there was a lot of deals, but they weren't great. And so when I looked a little bit, I got overwhelmed and I'm like, "Some of these, I don't even know if it's a better price if I were to look at it 60 days ago," right?

Brett:

Yeah.

Chris:

And so I definitely think deals didn't have the same impact overall, but if you're able to do a steep enough one and you balance it with, again, PSP, PBC, and try building it, we did find really solid success there. And they were actually the outliers in terms of best performance.

Brett:

Yeah. And I'd be really curious to see what was the lift for these other retailers, right? Walmart did their Deals for Days event and we do a lot of YouTube advertising here on OMG Commerce. So I was watching YouTube, a decent amount. I always do. I'm looking at for ads and stuff, and Walmart was blasting YouTube with their Deals for Days on electronics and some other things.

Brett:

So curious how other retailers did. I think some of the early data was pretty positive that Walmart and Target and Best Buy did pretty good. But yeah, it was a unique Prime Day. I'm sure next year will be different too. Who knows what quarter it's going to be in... Next year we'll keep an eye, but really some good takeaways. Just thinking about what is your growth and advertising plan leading up to Prime Day? Think full funnel, think holistically.

Brett:

Know the competitor who's going to drive up ad costs and who's going to be really cut-throat during those two days. So what can you do to prepare for that? Understand that maybe there's a low early day two, but there's going to be that push for the finish line at the end of day two, which is super interesting. And so hopefully some of this will get you ready for next year, but also ready for Cyber 5. Any closing thoughts, Chris Tyler.

Chris:

Yeah. So you nailed it with the Cyber 5 coming in the sense some of these takeaways I think could be seen in Cyber 5 period. It will be different because it's Q4 and people will be in that purchasing mindset.

Brett:

Yeah. Conversion rate should be elevated for that normal.. Traffic period.

Chris:

But keeping a close eye, leading up to it during and after to see, "Okay, has traffic gone back up," especially looking year over year because we still should be knock on wood out of this COVID space at least better than we were last year. And so we'll keep everyone updated within blogs and stuff leading up to it, but also acknowledging, if you want to do it right, the foundation is your product pages, your storefront, your inventory, everything we know.

Chris:

And I would say, again, that Prime Day prep functions almost the same for Black Friday and Cyber Monday, but then making sure that at least the two weeks, we looked two months before that you've got all these other pieces in place. Like we mentioned, external traffic, DSP, even just campaign types.

Chris:

More advertisers are using it for sponsoring video. It now can do targeting. Make sure you know what's out there and what's available and prep so you've got these things running at least two months prior. So you have data so that you can put your best foot forward when it matters.

Brett:

Yeah. Get data while costs are lower and while costs are more predictable so you know what to do as CPCs go up because CPCs will go up just like always and we got to be watching that ratio if CPCs go up. So cost per click goes up, but conversion rate also goes up and you're golden, and you can just keep pushing.

Brett:

If there is some disparity there CPCs go up faster or more than conversion rate, then you've got to be able to adjust. And that's where having that full funnel approach, having some remarketing audiences you can tap into, really just having a plan is what you need.

Brett:

So stay tuned to the podcast and also to the blog, we'll keep you up to date. We'll help you get ready, locked and loaded for Holiday 2021, Cyber 5 2021. Stay tuned for that. With that, Chris, man, really appreciate it. Thanks for coming on and thanks for ..

Chris:

Thanks for having me.

Brett:

I know you're still probably recovering from the late nights during Prime Day.

Chris:

It was a nice break, but yeah, I appreciate always coming on this podcast. It's great.

Brett:

Awesome. And as always, I appreciate you tuning in. We'd love to hear from you. We'd love that feedback on iTunes or wherever you consume podcasts. That review helps other people find the show, makes my day as well. And with that, until next time, thank you for listening.

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You want low CPMs (like the early days of Facebook)?  You want massive engagement from eager shoppers?  Are you looking for a little virality to go with that?  Then you need to consider TikTok  and Snap ads.  I’ve had more clients and other agency friends ask about TikTok and SnapChat ads in the last few weeks than I can ever remember before.  Both platforms are still in their infancy from an ads standpoint (with Snap being more established than TikTok).  Both still offer tremendous opportunities for first adopters who are willing to learn the platforms.  

Today I’m bringing on two experts, Madison Grover VP of Social from Pouch and Anders Piiparinen CEO from Wallaroo Media.  They’re giving us a crash course on what we need to know about TikTok and Snap ads.

• Why you should build TikToks and NOT ads
• How creating consistently great content on TikTok can have a compounding or “resurfacing” affect
• How to repurpose TikTok content on other platforms
• Why you can’t repurpose YouTube or IG content on TikTok
• Understanding key TikTok metrics
• The basics of a solid Snap ad
• How to drive conversions from TikTok and Snap

‍

Anders Piiparinen

Via LinkedIn

Wallaroo Media

Madison Grover

Via LinkedIn

Pouch Marketing

Mentioned in this interview:

Vessi Footwear

Vessi’s TikTok

Enquire

Knocommerce

Cotopaxi

Oracle (Bought Datalogix)

Nielsen Data

TikTok Business Center

Snapchat Business

‍

Episode Transcript:

Brett:

Well, hello, and welcome to another edition of the eCommerce Evolution podcast. I'm your host, Brett Curry, CEO of OMG Commerce. And I am absolutely jazzed, if that's a cool word to say these days, it probably isn't, about the topic of today's podcast. And one of the reasons why is because I actually think my kids would enjoy listening to this podcast, I have some teenage kids and some younger kids. I think my teenagers would dig the topic of today's podcast and you will too. We're talking today about TikTok and Snap, and how to run ads, how to do organic on these platforms. So this is a topic that I hear coming up more and more in different marketing groups and masterminds I'm a part of, and I realized that I don't know much about either platform, and so I decided to bring on the experts in this space.

Brett:

I'm absolutely delighted to welcome to the show, Anders who's the CEO of Wallaroo Media, and Madison who's the VP of social at Pouch, which is a division of Wallaroo Media. So Anders, Madison, welcome to the show. How's it going? And thanks for coming on, guys.

Anders:

Thank you, Brett. Going great. We're excited to be here in the chat. Yeah, TikTok and Snap.

Brett:

Yeah, now let us know where you guys hailing from? You're hailing from the beautiful state of Utah, correct?

Anders:

Yep. I am in Salt Lake Valley, our office is in Provo. So just down the road from Brigham Young University in Utah Valley University. We've got a office right there on Center Street. And then we've got... Though, our team is spread out across the country. We've got some in New York and Chicago, a bit remote, but a lot of our team is here in Utah. And then Madison?

Madison:

Yeah, I am as well. I'm located in Salt Lake City.

Brett:

Awesome. Only been to Salt Lake City one time, beautiful place. Love it. So little jealous of your weather a lot of the year, not in the winter, but the rest of the year, a little jealous.

Anders:

You got to come back.

Brett:

I will, I definitely will. So Anders, I got to know Anders... Several years ago he was working with one of our brands that we've been the agency for, for a number of years, and now Anders is running his own agency. So this topic of TikTok and Snap ads, it's heating up, man, people are asking about it. We're hearing about all kinds of crazy organic growth on TikTok, and the ad platform is really maturing, as well. I guess as kind of the first question, let's start on the ad side of things with you Anders, how should we think about TikTok ads? So what do we need to understand about the platform? And maybe talk strategy just a little bit, and then we're going to pivot, and also look at the organic side of TikTok.

Anders:

Yeah, TikTok is still very early in its infancy from an ad platform. Advertising on the platform has been around for about two years or so with beta advertisers. We came on board about a year and a half ago through their managed platform. They're continually working out kinks, different things on the back end, account setup. Self serve wasn't even set up. So with that, there's a lot of things that they're fixing on their end. And for a lot of advertisers, sometimes it does mean more risk, the platform may not be as stable as, say, Facebook or Google and these have been around a lot longer. So that's something to, I guess, use a little bit of caution with.

Anders:

But it's also an opportunity where a lot of advertisers are not yet, and we know that TikTok as a whole has just blown up, the fastest growing platform right now, especially here in the US. So the eyeballs are there. And there's not nearly as many advertisers, so while Facebook CPMs rose 30% in January, we were spending and seeing CPMs between $2 and $6 during Q1.

Brett:

$2 and $6, that's insane.

Anders:

Yeah. So it's a much cheaper way to get those eyeballs out, or eyeballs on your brand. But there's a lot of testing going on, there's a lot of things that we've got to keep in mind. So with that, using this, it should be incremental to your business, we're not looking and bringing brands on to TikTok to replace Facebook or Google ad spend. We're looking to help it supplement that and to diversify ad spend and strategy to just diversify things. There is this new customer, like you mentioned, this younger Gen Z, and the younger millennials, but I'll also say we've had a few brands that we've worked with, and we see buyers over 45.. So it's really growing quickly there.

Brett:

Yeah, I know, it's going to continue to grow, those older demos, and my wife and I have some friends in their 20s and 30s and stuff and we know a ton of them are on TikTok. I was just hoping that I could be cool again for my teenage kids, because they don't think I'm very cool right now. So that's why I mentioned that. But yeah, I love this idea of incremental growth and supplementing some of your big channels. So you're not saying, "Okay, go slash your Facebook spend by 50% or your Google ad spend by 50%, so you can do TikTok, but add this on." And it is where the attention is right now. And someone like Garyvee talks about a whole lot, attention is oxygen, you have to go where the attention is. And so really, really interesting.

Brett:

What about on the organic side and then we'll kind of talk about content and ads in just a minute. But Madison, I hear stories of people saying, "Hey, we'll post this on TikTok and it'll go viral." In fact, our controller, Patricia, we call her DJ PattyB, she posted something on TikTok with her dog, her dog and her cat got in a fight or something like that, and it went completely viral, it was like half a million views or something like that. She didn't really try and didn't even know what she was doing. I was in the kitchen the other day and she's like, "Did you hear that I went viral?" And I was like, "Are you sick?" I didn't know what she meant about viral, but then she said TikTok. And so pretty crazy what's happening there on the organic side.

Madison:

Yeah, I mean, that's a good way to describe it. Things on TikTok are crazy. And they're hard to expect honestly, even as marketers who do this all the time on TikTok, you don't always expect what's going to go viral. But the exciting thing about TikTok is that there is this huge viral potential that's really, really hard to find on other platforms these days. And there's a lot less brands on TikTok, more and more are jumping on, I'll say, especially with the overlap now with Instagram reels and YouTube shorts. There's a lot of ways to cross promote this type of content these days. So more and more people are jumping on, but it's still somewhat early for brands too, and so there's a huge potential.

Madison:

What I would say in terms of organic content for brands is that if you're going to do it, you have to really be willing to commit to it because you can't take your other strategies and try to apply them to TikTok, you have to really be willing to get into what TikTok is and who the people are that are there. They don't care about brands that just want to be there to promote, they want to see brands who are really understanding TikTok and the trends and becoming a part of that really unique culture.

Brett:

Yeah, so let's unpack content a little bit and I will talk about organic first Madison, then I want to I want to find out about ads too from Anders, but certainly we've got things like Instagram reels and YouTube shorts which are taking off and gaining some popularity. But to have success with TikTok you need to create content for TikTok first, right? You create for the platform because the expectations and the behavior and the mindset of the people that are on the platform is different, right? So what does organic content, what should it look like on TikTok? And maybe what are some ways where it's different from Instagram and/or YouTube shorts? So what are some things to keep in mind there?

Madison:

Yeah, great question. You're completely right, it has to start on TikTok, or else it's not going to be successful. The place that I would suggest with starting is always with sounds, TikTok revolves around the sounds, and if you start there, you're automatically-

Brett:

Talk to a guy who knows very little. I downloaded TikTok after our last conversation. I've gone on a few times, I confess, not very many. So what do you mean by sounds?

Madison:

When I say sounds, it includes music and unique sounds. So there are songs on TikTok, all the popular songs are there, and if you're a business account, you do have limited access to some of those more popular songs, which is when we start to talk about the unique sounds. And these are anything that another TikTok user uploads into the app, we're then able to take that sound that they used on their video and add it to video and add it to our own. So that's where trends sort of pick up are around these sounds, and people will create similar or different videos using that same sound and take it to all different places. So some of the sounds are just music, background sounds, and some of them are really the entire trend that's happening. So if you start there, you're probably 75% more likely to be on trend than if you just create a video from scratch, because you think that it will be funny or clever.

Brett:

Got it. How else is TikTok different from other platforms? Because it seems to me, in my limited exposure here, that with Instagram or something you could just get on and start talking, right? Or YouTube shorts could be you just kind of talking about something. But that's not really what you're doing on TikTok, right? TikTok, it's got a different pace, and it's kind of a different flavor. So how else is it different?

Madison:

Yeah, so one of the biggest ways that it's different is how you're finding the content. It's all coming through your For You page, and you don't necessarily know who it's coming from when it pops up. So you're right in that the pace is really quick, if I watched three seconds of the video on my For You page, if it doesn't grab my attention in some way, you're already skipping it, you don't have that name or profile attached to it like you would with people that you're following on Instagram, because you already know that you want to see their content, this is all random, so you have to grab people really quickly, and you have to create content that has those elements where people will recognize the content as it comes through there For You page, so that they stick around long enough to watch the full video.

Madison:

So that's why influencers are obviously taking off, you see their face and you stick around long enough. As a brand, you have to do the same thing. You have to have types of threads and themes throughout your content that people will pick up on so that they recognize you and care.

Brett:

Awesome. Okay, Anders. Let's talk the ad side of things really quickly. I know YouTube ads really well, thinking about what makes for a good YouTube ad all the time, we're dissecting things and even though I don't run ads on Facebook or Instagram, I got a pretty good idea of what works, sometimes it's just a simple product demo. But those platforms do have, and especially YouTube, have some similarities like TV ads, right? Direct response TV ads, that's a pretty good comparison to YouTube ads. But I know TikTok is different. So what do we need to know about TikTok ads, both in terms of the creatives, but then let's also maybe talk about how they function in a minute too on the way they're sold and stuff?

Anders:

Yeah, definitely. It's very similar to what Madison was talking about, we recommend creating ads specific for TikTok. Snapchat, we'll talk about later, I'm sure. You can take a good Instagram story ad or a good Facebook story ad, throw that on Snapchat, and a lot of time, that's going to work. But we have tested time and time again, and a lot of times it's when a new client comes on, that's all they've got. We'll throw it in there, and it just flops. We've also tested it where we create something specific or work with Madison and her team or the brand and influencers to get something that looks and feels like a TikTok, 9 times out of 10 that's going to outperform the more polished ad.

Anders:

TikTok did this massive campaign last summer, where they said, "Hey, don't make ads, make TikToks." 100 million dollars to small businesses to come and test and do that. And I think a lot of those businesses that came in didn't go and make ads or make TikToks, they made ads. I think we didn't see those perform nearly as well. In terms of functionality, your TikTok ads are actually not connected to your profile, yet, at all. So that's one thing. You don't need to have an organic presence on TikTok to have an ad account, which is a little bit different. Not to say that it would be more beneficial to do both, obviously. But if you're just getting started, you don't have the bandwidth to do organic or don't have the bandwidth to do ads, it's not like you have to do both.

Anders:

The other thing too, why a lot of that Instagram story, we're so used to saying swipe up, swipe up, swipe up. Well, TikTok, everything is swipe left to load the page. If you swipe up, you swipe off of your ad. You swipe off of your piece of content and on to something else that may be more attractive to the user and take them away from your brand or product. So we still see, and I've seen this time and time again, from even just big brands, I don't know if they're working with just a lazy agency or what, but they'll throw in their Instagram content that's running on and say, "Swipe up." You're telling people to go away.

Brett:

Like on YouTube, "Hey, skip this ad, because we have something really important to say."

Anders:

Exactly. So that's something to keep in mind. In terms of time limits and things, well, also, just in terms of content, it's only video, you can't take a static in here, either. So it is a higher barrier to entry than just a static ad for Instagram or a display ad on Google.

Brett:

Gotcha. And how long are these ads typically? Are there really defined limits, or is it more about these are just the limits that are most effective?

Anders:

Yeah. So there is a limit, I believe right now, it's still one minute. TikTok, organically, that's what the limit was, until, I think really recently, they've started to up that and play that to three minutes. So we might see some longer form ads coming. And I'd say it's similar to YouTube or another platform, the ad, we haven't found a sweet spot, in terms of like your length. It is as long as you can keep them engaged, keep them around and pushing the product. We've seen minute long ads crush it, we've seen a 15 second ad crush it. Because the other thing that's nice too, about these smaller, shorter videos, is if it's 10 seconds, TikTok's automatically going to loop it. It's not like Instagram stories where it just goes to the next video and your six second ad, somebody blinked and missed it. TikTok is going to replay it until somebody swipes away from it.

Brett:

Interesting. Talk a little bit about pace and sort of how you structure the creative, right? Because I know, on YouTube as an example, the first five seconds are critical, because that's the time before someone skips. And so we usually want to have a couple elements in the first five seconds, maybe one cut, but something that really grabs them. So we have what we want in the first five seconds. Talk about pace and what you want in that TikTok ad.

Anders:

Yeah. So definitely we almost always recommend product first. Make sure that you're showing your product, it's very easy to get into a TikTok trend, and not show the product until like 15 seconds, or sometimes we'll work with the influencers to create some content, and the first piece of content that we get back from them is them talking about the product, and then they hold it up like 10 seconds later which is definitely not ideal. Now that said, there's one particular example that the product I don't think was shown until like 25 or 30 seconds in, and Madison and her team worked on this with Vessi, brand that we work with, the waterproof shoes.

Brett:

Waterproof shoe, absolutely.

Anders:

And we brand this as an ad back in October of 2020. And it was with this influencer, her name's kallmekris, she's based in Canada, she has blown up, I don't know how many followers she has now, it's like 10s of millions. I think it's like 30 some. But she's got a character, and it's a trend that people follow her with or follow her for. She talks about waterproof shoes, or talks about shoes, but the product itself, and the product demo happened around like the 30 or 35 second mark. However, the interesting thing is..

Brett:

That's the exception though, that's not the rule, she's really engaging, and people loved her otherwise this

Anders:

Exactly. And that crushed it organically, that crushed it, we were able to boost it as a Tiktok, that crushed it. So in terms of that formula, it differs really based on that content. Now, if you're making something internally and you're doing something like an unboxing, there's also ways to... It really is just go on the For You page, start swiping to get ideas, see what trends are currently happening, and think, "How can I take this and turn it into a trend?" There's a big trend, especially around like TikTok made me buy it. So we've created several ads.

Brett:

TikTok made me buy it?

Anders:

Yeah.

Brett:

That's great actually. Yeah.

Anders:

And we'll create several ads around that and use this TikTok voiceover, it's not Siri, but it's got a voice that speaks the words out and there's text on the screen. And TikTok made me buy these shoes or this iPhone case, and you can then do the unboxing there. Whereas on Instagram, you might just start with the unboxing, and that might perform really well. So there's ways to tack on and use that from... use trends as a best practice as well. So I'd say product first, and then focus on trends. It is very difficult to just like... We haven't seen an ad just take off that doesn't follow some sort of trend. I'll just say trend videos outperform 9 times out of 10.

Brett:

Nice. And is that what you do on the organic side as well, Madison, where you're... Obviously, you have to have a deep understanding of the client's product and their market, but you're starting with tend first, and then seeing how you can leverage that trend with a given brand?

Madison:

Yeah, typically, and it depends on how much flexibility we're given too, because trends happen very quickly, and they come and go.

Brett:

And do they fade... Okay, yeah fade quickly.

Madison:

100%. Most of the trends that come through TikTok die within a week. And then there are some standout trends that will stick around for a couple of weeks, really, they're very strong. And then you can still do that trend and use that sound a month later, and it's still relevant because they were big enough that everyone saw them, right?

Brett:

Like TikTok made me buy it, that's maybe one with a little more longevity, at least for now?

Madison:

Yeah, TikTok made me buy it is interesting, because it started a while ago, probably six months ago, and just this week came up on the Discover page, which is where all of your trending hashtags show up, and it was like number three trending hashtag. So some really, evergreen trends like that will come back around every once in a while.

Anders:

One thing I want to call out too, because this really started organically, was a lot of people would do like, "Things you didn't know you need on Amazon, part one." There are pages for this. And then they put a link in their bio and drop an affiliate link, whatever. Well, now Amazon actually promotes all of that content. They're working with influencers directly to push that. So that's another one that... It's been around for a while, it started a while, but still... Yeah, I'd say it's more evergreen now. And that's specific to Amazon, the giant that they are.

Brett:

Yeah, super interesting. I've got so many, so many questions. I'm trying to decide what to ask next. What's our metrics in what we're seeing there? So we'll get into that in a minute. First, I want to talk about content a little bit more. So when you create an organic post, are there any similarities between this and Facebook, where then you're boosting that organic content? Or are the content pieces quite different? And so you've got your organic and your paid? That's the way it typically is on YouTube, right? Typically, YouTube, ads are different, organic is different, but it sounds like there's probably some overlap here. Who wants to take that? I know you

Anders:

Madison, I'll let you take it, that way... Because I think what would be interesting, I think people want to know, like, what is the length of a piece of organic content? Because we do boost some content. But typically, we wait a little bit. So I'll let Madison take it first, and then I can talk towards the paid.

Madison:

Yeah, there is a lot of overlap, because again, what we're talking about with ads that perform really well, it's because it looks like a really strong piece of organic content. So it sort of starts organically, and then we take the things that are really working, and that's where we're putting the money. A strong organic piece of content, I would say, is usually 15 to 30 seconds, try to keep it on the shorter end. But like Anders said, as long as you can keep people's attention. That content, when it's posted, will typically get the most amount of engagement within 48 hours, let's say. If it's going to blow up, it blows up almost immediately. But then it has a lifetime that's indefinite, honestly, it depends on how other things perform. It will keep gaining traction, especially videos that do perform very well for a week, sometimes even two weeks. And then what will happen is if you get another strong piece of content later, TikTok says, "Oh, now look at these new 50,000 people who are interested in that brand's content," they'll pull from old videos and start pushing them back into the feed as well.

Madison:

So the lifetime of a video is really dependent. But typically we like to see that one to two weeks, let that content really live it all out, get all of those views, and then that's when we start to look at, "Okay, what's really performing and where do we want to put money behind this now?"

Brett:

Yeah, it's super interesting. So the shelf life of a given video typically is pretty short. But if you have a good strategy and you're releasing more content that people like, there's kind of a compounding effect, right? This resurfacing effect that really, really makes it attractive to say, "Hey, let's keep putting content out," which I think goes back to your first point, Madison, of you got to commit to this. We're going to do it, commit to it, content.

Madison:

Absolutely. And that's where those themes and... not trends, themes, and storylines come through. So for example, with Vessi, one thing that we did was what we call a pour video, where we just pour random liquids over the shoes. That really grabs people's attention really quickly, it's very interesting.

Brett:

It's like the will it blend videos from so many years ago, right?

Madison:

Exactly.

Brett:

It's attitude wore it out.

Madison:

That's funny, we actually talked about doing a series called will it repel, completely based on that. Will the shoes repel these liquids? So when we do that-

Brett:

Acid

Madison:

... when we had a pour video perform really well, TikTok immediately recognizes the five other pour videos that we've done beforehand, and will show those same types of videos to people. So that's where having those themes and storylines in your content really pays off, too. Because as soon as one hits, if you will, then TikTok will find the rest of it.

Brett:

Yeah, cool. So what are the metrics we're paying attention to? And it's really interesting that you kind of know in the first 24 hours, if this thing isn't going anywhere after 24 hours, it's pretty well dead, right?

Madison:

Yeah.

Brett:

So what are the metrics we're looking at? Is it just strictly views and engagements? Are there other ways we can tell if people... I know on the Facebook side, likes and comment, likes are great, comments are maybe better, shares are even better than that, from what I know, from my Facebook friends. What are those key metrics here?

Madison:

Yeah, I would say views is just absolutely the biggest one, because the way TikTok works, once you start gaining views, it's exponential. They're showing it on more and more and more For You pages. The other thing that you can see within 24 hours of posting your video are the analytics of that specific video and you can see how many of your views are coming from your profile or your followers and the For You page. And if you see more than 50% or more like 80% or 90% coming from the For You page, that video is getting a lot of traction, right?

Brett:

Yep.

Madison:

Shares are also a huge metric.

Brett:

Got it. Are shares pretty common? Is that a big thing, are people mainly just watching from For You and people they follow and stuff like that?

Madison:

Sort of depends. You can have a really successful video that doesn't get a lot of shares. But typically, shares are a really good indicator. They do happen even more than you would think, some videos don't seem like something that people would want to share and they still get a lot of that on TikTok.

Brett:

Nice.

Anders:

I'll chime in real quick too about shares because shares on TikTok are really unique, where Facebook, those shares are more like on the platform, and more and more, I think you've started to see shares happen through Messenger. But when you share something on TikTok, I don't know the stats on this, but I would bet 90% of them go to a text message.

Anders:

I find a funny TikTok that I like, I grab that link and I send it to my family list or my wife or whoever, and they can see it right there in iMessage or in their phone and it opens right up. So you're not DMing it all the time. My wife and I, we've never really DMd a link over there, through TikTok's messaging portal, but we do it through text all the time. And then same thing, if you share it on to Twitter or somewhere else, and a lot of times you can save a video and then you'll go repost those or they'll get reposted on Twitter, it's always cool. TikTok does have that watermark which I'm sure you've seen that ..

Brett:

Totally. Yeah, we've used TikTok influencer clips on YouTube ads, and they've worked really well when combined with other things. So yeah, I do see that that watermark a lot.

Anders:

Yeah, so that's a cool feature too, because it always gives that credit back. And we've seen too, I don't know, necessarily with many other brands that we've worked with, but definitely I've seen content that has crushed it on TikTok, and then all of a sudden it's on Instagram reels and trending on Twitter. A lot of times, it wasn't even the person who posted initially to TikTok that shared to the other platforms.

Brett:

Yeah, so it does seem like TikTok content can be shared elsewhere, and it works. You just can't go the other way. You can't usually create something for Instagram or YouTube and then share it on TikTok, that sharing doesn't work, but it does work from TikTok to other places. So let's talk about the relationship of ads and organic. It sounds like you're often posting organically, seeing if it's got traction, then you're boosting it, potentially. Does putting ad dollars behind content help with organic reach as well? So as an example, on the YouTube side, there's almost no connection, right? In fact, in some cases, if you promote, send ad traffic to something, it will hurt the organic reach, because your watch times drop and all these things and so that hurts organic. What's the relationship here between paid and organic?

Anders:

Yeah, as I mentioned earlier, your paid account and your organic aren't even connected at all. So the only way that they are connected is if you do a boost. And the way that these boosts are done, actually is TikTok, really cool, we've heard of whitelisting on Instagram or YouTube, or like all these ways, and permissions is just an absolute nightmare from an ad agency to get those from influencers. TikTok's got a really nice way, the user just goes and clicks that share button, but then it will allow them to generate a code and anybody can do this, you don't have to have 10,000 followers to do it. You don't have to have a brand profile with 10,000 followers, and then it generates that code, and then you get that on the back end TikTok ad manager where you can put that in, and then boost.

Anders:

Now that said, it's still... I don't believe that this feature is widely available yet to advertisers, we have it on our accounts that we're connected to, and there's a lot of beta features that come out. But that whitelisting may not be available to everybody yet. I know that TikTok's rolling it out. And it might not be available for every country either. And then there are as well, some other objectives, similar to Facebook, where you can boost a post, or say you've got a business, you post on Instagram, and there's that little boost button down there, and you can optimize for traffic to your website or engagement. Tiktok's starting to test and do more. And they do have conversion objective or traffic or brand awareness, and one that's opened up more to, and is still I think more of a beta, is engagement. So we..

Brett:

What exactly have you found to work best... On the YouTube and Facebook side, if you choose views or engagements, that's what you'll get. If you choose conversions, that's what you'll get. But what do you find working on TikTok?

Anders:

Very much the same. It wasn't always the case. Last June, for instance, we ran for a brand. And that was back when the pixel was very rough, tracking was very difficult. You couldn't even post events in your code. You had to do it all through their portal. And so we ran actually traffic a bit last June for one brand in particular, and according to the post purchase survey results at the end of the month for their Shopify store, Tiktok absolutely crushed. And we were definitely bummed, we didn't go and spend some more dollars on traffic. But since then, conversion of the-

Brett:

The numbers in TikTok looked bad, but the numbers in the back end on Shopify looked great?

Anders:

Yeah. Oh, the numbers and TikTok back then, it was like nothing. We saw like five purchases, and I think in that month, I think we spent maybe like six or seven grand, but on the back end, post purchase survey, it was like $45,000 in sales.

Brett:

Whoa,

Anders:

So it was absolutely... It was a big difference. Now that said, we have seen the conversion objective work so much better. Just like Facebook, and like a lot of these other ad platforms, they do recommend that you optimize for an objective that you can get out of learning, and that learning needs 50 conversions a week. So-

Brett:

50 a week, okay.

Anders:

50 a week, just like Facebook for that learning phase. We have tested a lot, add to cart, optimize it for an add to cart, we've optimized for PDP view, we optimize for complete payment or initiate checkout. All the testing that we've done, it's just once you get a complete payment, or a purchase, optimizing for that is just far better. Sometimes it's more expensive and definitely more expensive to get traffic or sometimes an add to cart, but we've seen it's much more qualified.

Brett:

Nice, it sounds like things are getting better there. Although at the time of this recording, we're battling iOS 14.5 and 14.6. And so we're seeing that big impacts on YouTube and Facebook and other places, so that's likely going to create some headwind for any iOS app. But there's actually a big release recently, right, with TikTok attribution where now it's like a seven day click, one day view attribution where before it was not.

Anders:

Yeah, so that was a recent update, and it went to, yeah, seven day click, one day view polls auto advanced matching or advanced matching with phone number and email match and user ID and IP address. So they are able to do that. It's not able to get around, obviously, if they opt out on iOS 14 devices, but we've already seen an improvement on the back end, and in Tiktok metrics, especially, it used to be single session. So if you're selling $150 pair of shoes, in Vessi's case, that's not always an impulse purchase buy.

Brett:

Right, you need to think about that for a little bit, maybe to get approved from your spouse or your significant other, you're maybe not buying on that single session. Yeah.

Anders:

And if you didn't buy on that single session, TikTok wouldn't report it, and it wouldn't get any of that data back that that buy happened. So it's-

Brett:

That made your job tough.

Anders:

Yeah, we didn't have a lot of advertisers that were like... like I said, you've got to be willing to risk... It's a higher risk .. I think-

Brett:

What's interesting, though, is that there's going to be a lot of platforms kind of moving in that direction, potentially, we'll see. There's all kinds of solutions to iOS was 14 that are out there, data modeling, and things like that. But it's very possible, there's a future where we're going to have less visibility into that clear conversion data. And we're going to have to find proxies and ways around that and just be smart marketers, so super interesting.

Brett:

I want to talk about... And getting into Snap first, but TikTok has been so much fun, we may have to do part two at some point, to really dig into Snap. But usually we're running direct response ads, we're running YouTube ads, we have direct calls to action, we're telling people to go do this, or download that, or shop for this, that type of thing. What are you seeing on the Tiktok side? We'll start with you, Madison, are you specifically telling someone to take action? Or is it more kind of fun and light and soft sell?

Madison:

Yeah, on the organic side, we're not doing a lot of hard call to actions. It's more about appearing, again, as a brand who knows how to TikTok, if you will, and people sort of get excited about that. And the other approach is the sort of exposure, everyone's talking about this product. So you can have that sort of like unboxing or UGC style, people just talking about the product without saying, "You need to go get one of these." We do that with influencers too, just talking about I love this product. But really know, especially on the organic account, we don't have any strong call to actions. The only exception is influencers who have specific codes or affiliate links, who will drive those specific ones-

Brett:

Go get my code or mention my name and stuff like that.

Madison:

Yeah, but typically on the organic side, we're just trying to appear cool like every other TikToker on the app really.

Anders:

And Madison, do you see a difference in performance? I know sometimes brands that we work with will have a promo or a big sale, and they want some piece of organic content. Do you see any difference on how that performs verse, yeah, the more fun casual, soft sell?

Madison:

Yeah, typically, a promo is not actually the easiest thing to do on TikTok, it doesn't perform as well as it would. Whereas on other apps, you have a group of following that are so excited when you have a promotion because they already know and love you. On TikTok, again, your content is being shown to a bunch of random strangers who don't even know who you are, and they don't care if you're running a promotion or not. So it is a bit tougher to do a promotion or call to action in that way.

Brett:

Super interesting. What about on the ad side, Anders? Are you asking for action, are there buttons or call to action links? Talk about that a little bit.

Anders:

Yeah. Well, I think the Tiktok user is very savvy, for the most part, they understand how it works, they understand that-

Brett:

They were born online, right? They were born with a cell phone in their hand..

Anders:

..yeah. So they swipe left, they know they're loading the website. But that said, we do, especially when we're creating a piece of content and are doing post production and maybe we will close that video and go to the brand logo and then we'll have a swipe left to shop, kind of call to action, we do some of that. But even that kallmekris video I mentioned earlier, that's one that there was nothing in there that was like, "You need these shoes," or anything. It was a very soft sell, engaging piece of content, and it sold the product in a very, very soft but easy way and it just made sense. That's, I think, what we see the best content that works the best from a performance standpoint, is it's selling the product and it's making it a no brainer for people to buy. And it's probably similar to your YouTube stuff where they just... The video should sell the product, you... You can give them those little jabs, click here or swipe left, but that's typically what we see best.

Brett:

Yeah, and it can be very, very simple. We talk about that a lot on the YouTube side that is just simply a learn more or visit site, it can be very simple if the product demo is powerful, and the hook is powerful, and you're really creating desire, you just need a little nudge at that point and people ...

Anders:

Now, there are, like the call to action button, we can change on the back end, we can change it shop now, watch more, learn more, buy now or get offer. There's a bunch of options, there are-

Brett:

What are you seeing there, are you seeing any trends there? Because on YouTube, for example, buy now doesn't work well on YouTube. But shop now, learn more and visit site honestly works super well. Weird.

Anders:

Yeah, we typically see shop now and order now. Those work best. The other thing too, on that little button there, TikTok's starting to work more with catalogs, and especially for direct response. We're doing a lot of that where we'll upload their catalog in, and then it gives you a little-

Brett:

Not to get too nerdy, but on the catalog side, are you using a feed service like a data feed or data feed watch or something like that, or-

Anders:

Yeah, we use data feed watch. But also, if you are-

Anders:

... it will connect it with Shopify and the Tiktok sales channel app. So you don't even have to worry about any of that. But the way that this call to action works is it will actually show one product and then the name of that product and the price. And then every three seconds it cycles through to a new product while the ads playing. So if your ad's 30 seconds long, it's going to cycle through three products, several times each and that's eye catching to the user saying, "Hey, we're selling things." And we've seen those collection instant experience catalog ads actually perform really well. Higher cost per traffic, but more qualified user for sure.

Brett:

What kind of audience targeting is possible on TikTok? What's available there?

Anders:

Yeah, so again, very limited in compared to Snapchat, Google, Facebook, and these guys who have been around for a long time. But there's a lot that has come out recently, specifically around behavior. So every TikTok profile is connected to some sort of theme, I guess. So are they into video games? Is it a news type video? Is it about animals and pets? And there is behavior targeting on the back end.. That's something we've seen work well, it is-

Brett:

Behavior targeting, it sounds like that's maybe more interest targeting? Or are you targeting other TikTok influencers? Or what do you mean?

Anders:

There's interest based targeting, and I'm not 100% sure how TikTok gets all that data, how much of its in platform versus outside and data partners. But then there's behavior targeting. So I can target people who watched videos in the last seven days, or who shared a video in the last seven days, that was in the baby maternity, kid space.

Brett:

Interesting.

Anders:

And we know it's relevant because it was in the last seven or 15 days that you can do. You can say if somebody liked or watched all the way to the end, or they commented or they shared. And I think overall, because we've done exports and done some of this, I think it's around like 650 behaviors that you can target up to that many.

Brett:

I know, everything is still pretty new. And it's going to vary from advertiser to advertiser. But what types of targeting tend to lead to the best result? Is it behavioral, is it more interest based? What are you usually starting with?

Anders:

Well, we're starting broad, we're saying, "Hey, let the machine do that, go and find that." But you are able to do behavior exports on your data and see, "Okay, when I went broad, who were those behaviors that were performing best? Who didn't perform?" And then we can narrow down and do a little bit of testing there, we can also get ..

Brett:

Then you can double down on whatever the data shows you that, "Hey, this audience was performing well, so maybe you can get more of that."

Anders:

Exactly. For a while we saw these behavior audiences especially performing better than broad. I'll say more recently, we've seen broad work better. Their look alike system too, and email list and phone number upload, that's not available to all advertisers, but I think ..

Brett:

Okay, got to spend a certain amount to get-

Anders:

Yeah, you've got to get whitelisted for it. But I will say that look alikes haven't performed as strong as maybe they do on other platforms. So I think there's still some work that they're doing on there.

Brett:

Interesting. It really seems like Facebook and IG have nailed look alikes. Google's still behind there, honestly, which is crazy because Google is so advanced in so many ways. But what about remarketing, is remarketing possible? Can you upload remarketing lists or target your email list? It sounds like maybe.

Anders:

Yeah, so you can, if you get whitelisted, you can obviously... You can upload phone number match and email. Phone numbers, because TikTok, you can't sign up on the desktop, you have to do it on mobile. And phone number match is actually a higher rate there. So that's important. In terms of visitors to the website, with this new pixel change, this recent pixel change and the seven day click, one day view, they are getting more data and matching more. So we are able to do some on the visitors. But historically, it's only when you can retarget people who came in through an ad.

Anders:

Say your brand gets 100,000 views a month and you start spending 100 bucks a day on TikTok. Well, your 100,000, we're not going to be able to retarget, we're only going to be able to retarget the people who came through your $100 a day in ad spend. It's gotten better, and-

Brett:

It will continue to improve, I'm sure.

Anders:

Yeah.

Brett:

Super interesting. I like that approach where you talk about going broad first and then looking for trends and looking for audiences and doubling down there. And I think that makes sense, because once APMs are low, things may go viral a little quicker, like all of that. On YouTube, we actually do the opposite, where... At least this is our approach, where we like to go very, very focused, because YouTube is so massive, and the CPMS aren't as cheap, relatively speaking. So we want to train the algorithm and then we go broad, but I could totally see the reverse working in this case, which is super interesting.

Brett:

This is awesome. And I think one of the key takeaways I'll underscore here is, it does make sense, just like with other platforms, to think about the platform first, design and build your content for the platform. But the beautiful thing about TikTok is, I believe it's very, very shareable. You can spend some time with Madison's team or Andres team building this great TikToks content, and some of it you're going to be able to repurchase on Snap and reels and even on YouTube, like I said, we're using little snippets of TikTok influencers on YouTube videos now and they're working well. So I think that's a nice benefit.

Brett:

Cool. Anything you would kind of wrap up here, and then we'll spend about 10 minutes talking Snap ads here in a minute. But anything else that we need to know, and I know we could probably talk for hours about TikTok, but any other little nuggets you would share?

Anders:

I think the biggest thing for TikTok ads is just making sure you're set up with some measurement for success. What is success going to be for you? If you rely on in the platform, it's like what we're seeing on Facebook and Google and all these things with iOS 14 and tracking falling, don't come into TikTok an expected a 3X return on the platform. Do a post purchase survey, do something and don't just rely on Google Analytics, either. Because that last click or first click isn't going to match-

Brett:

It'll really under report as well.

Anders:

Yeah, I would definitely say get a post purchase survey going, especially as you're diversifying, to rely a little bit more on people and less on the pixel, especially as the pixel maybe gets less and less accurate.

Brett:

Yes, so interesting. And I think that's going to become more and more important, the post purchase surveys. Any tools or pieces of technology you recommend for that, for the post purchase survey?

Anders:

Yeah, there's two that we use, and recommend every brand that we work with specific to Shopify, these are Shopify apps. The first is Enquire, E-N-Q-U-I-R-E, and then that one, I think they've got a $20 a month plan, that works just great. And then there's another one that's called K-N-O, KnoCommerce. Both those are in the Shopify app store. Kno does have a free plan. And both of them it's just a very simple... At the end of the buy, on Shopify confirmation page, it just says, "Hey, basically one more thing, how'd you hear about us?" And then you can customize that and, "We started on TikTok-

Brett:

Pretty good.

Anders:

... make sure you've got TikTok there.

Brett:

Yeah, great. Awesome. Madison, what about you? What do we need to know, any final nuggets on the organic side of TikTok?

Madison:

Yeah, on the organic side, I would say it's all... Like you were talking about... TikTok content is really working in a lot of other places right now. So it's so worth it to dive in and, like we talked about, it's all about commitment, you have to do a TikTok first, but if you do that, it's really going to pay out. The benefit of doing organic paired with ads and having a really strong organic influencer approach, they're all working together really well. We're taking influencer content, using it on our organic page. We're taking organic content, using it on Instagram reels. And suddenly, before you know it, you have 100 videos, which every brand is dying to have, and it's just really, really beneficial. But like Anders said, there's risk involved, it's different, it's unique. You have to be willing to be flexible and put your hands up and say, "Okay, I don't know, TikTok." And let your marketers do it.

Brett:

Yep. Awesome. Really, really good stuff, guys. That was fascinating. I'm suddenly excited about TikTok. So let's talk Snap a little bit. So Anders, what do we need to know about Snap ads? I know they're a different beast, different animal, what do we need to know about them?

Anders:

Snap ads, obviously, their stock has been just crushing it. And they're continuing to come out with new products and new partnerships. And the commerce.

Brett:

I see Snapchat advertising for their ad platform on YouTube all the time, which is interesting.

Anders:

Oh okay, interesting. I have YouTube Premium so I don't get your ad spread.

Brett:

Thank you, Anders, you're killing me, man. All right, keep going.

Anders:

But Snap ads too, they, earlier this year, I think it was Q1, they did come out and say that Snap ads has more like millennial, like 18 to 40 users, I think, daily active users than even TikTok and some of these others. So the Snapchat user is using the platform daily, it is also a very different user. TikTok, they're on daily, but Snapchat, they're messaging, they're constantly.

Brett:

Yeah, but you TikTok messaging isn't so much happening. Snap messaging. I mean, I know, my son is 19, that's how all his friends communicate is Snap, let me Snap this person. That's it.

Anders:

Yeah. So there's that, there's the back and forth, there's the Discover section, which is kind of got all of these stories, and it's a lot of clickbait articles and your influencer that you follow probably has stories on there that are trending and that you can click into. So it's a unique platform, but people are there. Their ad platform is also very, very good, and it's gotten a lot better just over the last couple years. And I'd say even the last year in general has gotten much stronger.

Brett:

Would a Snap ad be more comparable to an Instagram ad?

Anders:

Definitely. Whether you're chatting or watching a piece of content on Snapchat, or watching the stories on Snapchat, just like Instagram story ads, it will intersperse with their story ads on Snap. There's a way to put in your catalog and do dynamic product ads as well, to show the pair of shoes that you were just looking at on the website, make sure you show it to that user there. There's AR filters as well that are a little bit more pricey to go and build out. But it's a different experience, and that's a chance to get a little bit more in the messaging space. If your son, all he's doing is messaging back and forth, and he's not using the other stuff, he's probably using a filter on some of his chats. So you can run a filter to do that. And whether it's a filter, or an AR lens, you can run sponsored versions of those as well. But it's a strong.

Brett:

Does that work well? Would you suggest a sponsored filter as an example? Or is there just like a standard ..

Anders:

Yeah, those work really well. So when I used to work at Cotopaxi, which is an outdoor gear brand, we had this-

Brett:

Awesome outdoor gear brand, man. Such a cool brand.

Anders:

Thank you. We had this event called Questival, and it was a 24 hour adventure race, and we would host these events and there would be a starting basically where you picked up your packet and everything and then we had a closing ceremony. It was very easy inside Snapchat, I could just go geo-fence the park and I could put a filter on there, because I knew everybody who was coming, especially at that time, they could go through and make sure that people knew they were at Questival, and it was a branded thing. So it's much more on the brand play, I would say, for filters. It's not amazing for selling product.

Brett:

Yeah. So the filter's not going to be a direct response play, but it could be a nice brand play and that certainly has value too.

Anders:

For sure. The AR filters, I will say, are a little bit different because you can actually-

Brett:

This is where you can see the couch in your room or on the wall or maybe apparel, that price, pretty

Anders:

Yeah, I think it was Nike or the sneakers app, it was one like last summer that really came out and did... It was a Michael Jordan, I think... A new Jordan shoe. And you could put that out in your living room and look at it. And then there was actually, "Hey, you can buy this." And that was the first, I think, drop that they did with this feature, Snapchat did, and you could check out really quickly. So they are getting there, they are doing, I think, a lot more to make that more approachable for advertisers. But I think there still needs to be some adoption, for sure.

Brett:

Nice. So then on the pure ad side, are you seeing direct response type ads working? So-

Brett:

Just like you're seeing on Instagram or Facebook, those are working well on Snap too?

Anders:

Yeah, Snapchat, super low barrier to entry, there's like no minimum a day ad spend, you can take what's working well on Instagram stories and throw that in, get the pixel up on the website. If you've got a Shopify store, they've got a Snapchat app, links it within a minute. And you can be off to the races spending $10 a day retargeting people to your website. You most likely have a good amount of users that are on Snapchat.

Brett:

.. on Snapchat.

Anders:

With a lot of our brands, we make sure that, hey, this is a part of the customer journey. We don't recommend take just what's running on Instagram, and put it on Snap. We also like to think-

Anders:

... how can we make a good experience? But that said, those users are there. I think that that's just an important call out, is like, they are there, and if they're there, more people probably are, new customers, and they're targeting, look alikes are really pretty good there, there are interest-based on targeting. They also partner with Datalogics and Oracle... Or maybe Oracle, can't remember. Nielsen data. There's these audiences directly built into the platform, you don't have to work with a third-party partner. You can ..

Brett:

..income targeting, obviously geo targeting, income interests, stuff like that.

Anders:

Yeah. People who shop at Foot Locker in the last 365 days, you can go and do that, or did they go to Bed Bath & Beyond? So it's actual credit card consumer data that you pay the premium CPM inside the platform, but you're not getting invoiced separately. Those audiences, you can... And it's something we're starting to test a lot more with iOS 14, obviously is going after more of this data.

Brett:

Totally makes sense. What about attribution? Is the pixels, the Snap pixel pretty accurate, or what are you finding there?

Anders:

Yeah, I mean, pixels in general, I feel if you've set them up properly and through the channels, they don't lie to you.

Anders:

Yeah, they might show more numbers than if... Snapchat, because there's so many users on there, and also CPMs are dirt cheap on Snapchat. So retargeting wise, you could, on a $10 a day budget... Say you had 500 or 1,500 people to your website, on a $10 a day budget retargeting, you're probably going to show your ad to every one of those people who are on Snapchat.

Brett:

Wow, that's awesome.

Anders:

Really inexpensive. And people also don't get tired of seeing ads in Snap. Frequency can go really high, but ..

Brett:

Really? How do you think?

Anders:

I think it's just the user inside of there. They're in there constantly, they go to the Discover page, they know, because they're in there so many times a day that it's not updating constantly, it is, but not everything's changing, just like when I go to the news website that I read. I don't expect..

Brett:

Big companies time reload in the day. Yeah.

Anders:

But because of that, we also... Again, going back to that incrementality and making sure you have a post purchase survey, Snapchat will take credit, especially on a... So their default is a 28 day swipe, one day view, I think it's transitioning more to that seven day swipe, one day view. But that one day view, like I said, 10 bucks a day or whatever, on a smaller site, will show it to everybody. So Snapchat will take credit in the platform and..

Brett:

..on the attribution, which is okay. That's where you triangulate the data by looking at post purchase survey and then ..

Anders:

But you can also narrow it down to one hour view or three hour view or six hour view. So that's what we do with a lot of our brands is we narrow it down to that one or three hours to say, "Hey, if they bought within that period of time, this is probably a little bit more interesting to attribute and give credit to Snapchat on the retargeting front, as opposed to somebody who saw an ad 23 hours ago."

Brett:

Sure.

Anders:

But the other thing, and Snapchat, finally, I've been bugging them for this information, they've got a lot of details around shopping retail. So many people Snapchat an outfit when they're at Forever 21 or whatever and send it to their girlfriends, "What do you think about it?" There's that, but from direct response, finally, just recently got some data from Snapchat, and it's something like 75% of Snapchatters don't take a last click action when interested in an ad. It's like 25% of them open it in a new browser, or like 25 just remember it and

Brett:

Go search later or something like that, search on Google the next time they.. Yeah.

Anders:

But it will pick that up though still, the attribution. It's really good.

Brett:

Cool. Awesome. Well, guys, I have more questions. But we've gone a little bit over our allotted hour, which was totally worth it. This was a ton of fun. Where can people learn more about you guys? And then like I mention in the beginning, I've got more people asking me like, "Hey, who's the Snap agency recommended? Who's the TikTok agency?" So I'm sending them to Wallaroo, for sure. But where can people connect with you? And then do you guys have any free resources or anything you'd recommend that people check out?

Anders:

Yeah, definitely, wallaroomedia.com, or-

Brett:

Will you spell that real quick, Anders?

Anders:

Yeah, W-A-L-L-A-R-O-O media.com. I'm on Twitter @rpiip, you can always just shoot me a DM or something there. We've got a lot of resources, our blog, we do a bit as well, and we talk a bit about TikTok and Snap and why you should be there and try and keep those up to date with profiles that are doing good examples. But I'd also just say, and from a resource standpoint, TikTok has... Got to business.tiktok.com business.snapchat.com, those resources are so underutilized and they have your best practices. You got to the business.tiktok or ads.tiktok, first message you'll see there is, "Don't make ads, make TikToks."

Brett:

Nice.

Anders:

And the advice you're going to get straight from the source is always my go to.

Brett:

Yeah, cool. Awesome. What about you, Madison? Would you like to connect on socials, or should people just go to wallaroomedia.com?

Madison:

Yeah, I think the best place to go is through Wallaroo. We have a really close connection between our organic and ads and typically work together with a lot of clients. So Wallaroo is a great place to start. And you will happen upon our organic division, Pouch, as well.

Brett:

Pouch, yeah, awesome. Guys, this has been totally amazing, and we'll have to schedule a follow-up here pretty soon, because I know we could go a lot deeper, and there's probably more questions that other people have as well. But really appreciate it guys. Thanks for spending the time.

Anders:

Thank you so much, Brett.

Brett:

Yep, absolutely.

Madison:

Thanks for having us.

Brett:

You bet. And as always, we appreciate you tuning in and giving us an hour of your life each week, or there abouts. And hey, we'd love to hear from you. If you liked this show, share it, share it on TikTok or Snap if you want to. But let other people know about this show, it means a lot to us. I think it will be helpful for them as well. And with that, until next time. Thank you for listening. All right, guys, that was a wrap.

Every website is leaking sales and conversions somewhere.  While I love talking about driving more traffic, sometimes the best thing you can do for your business is improve your conversion rate.  In this episode, I interview the founder of Conversion Crimes, Quinn Zeda and we discuss the most common eCommerce conversion crimes she sees.  If you fix even a few of these you’ll see a meaningful improvement in your website performance.  Here’s a look at what we discuss:

• Understanding visual hierarchy and the metaphor of volume knobs
• Creating a process of testing and iteration vs. launching a full site overhaul
• Using customer intel to create marketing breakthroughs
• Keys to better navigation and menu structure
• How to not confuse or overwhelm your visitors
• Using action colors
• Plus more!

‍

Quinn Zeda

Via LinkedIn

Conversion Crimes

Mentioned in this episode:

eCommerceFuel

Andrew Youderian

Magic Spoon

SkaterTrainer

Revolution Balance Board

“Atomic Habits” by James Clear

Episode Transcript:

Brett:

Well, hello, and welcome to another edition of The eCommerce Evolution Podcast, I'm your host Brett Curry, CEO of OMG Commerce, and today is a crime show. This is a crime show, this is a mystery show, actually it's not a mystery show at all, but we are talking about conversion crimes and how to avoid them.

Brett:

This episode is brought to you by eCommerce Influence. If you enjoy my podcast, you've got to check out eCommerce Influence, hosted by my friend, Austin Brawner. Austin interviews world class eCommerce operators like Native Deodorant founder, Moiz Ali, MVMT Watches CEO Jake Kassan, and Pura Vida Bracelets founder Griffin Thall. He deep dives into what's working right now to scale your business and he offers a refreshing break from the crushed culture plaguing our industry. The eCommerce Influence Podcast will not only change your perspective on building your business, it will change your perspective on what's possible for your life. I've known Austin for years, he's the real deal and he's someone you need to listen to if you're serious about growing your business. Check out the eCommerce Influence Podcast for free wherever you get your podcasts. And now, back to the show.

Brett:

I am delighted to have on the show the CEO and founder of Conversion Crimes, love the name, you're going to love this topic, my business partner Chris Brewer, he met my guest today through eCommerceFuel, awesome forum, shout out to my buddy Andrew Youderian, but Chris my business partner met Quinn Zeda from Conversion Crimes, they started working together, we sent a couple clients to Conversion Crimes and super impressed. And so then Quinn and I started talking, I thought, "man, there's a podcast episode here, we got to get you on and talk on the podcast." So with that quick intro, Quinn welcome to the show, thanks for coming, and how's it going?

Quinn:

Thanks for having me, that was a great intro, the crime scene and stuff, in our dev we've named part of it the crime scene where we actually do the testing, so that was great.

Brett:

You're like CSI for eCommerce conversions.

Quinn:

Yeah, so I so badly want to make a spoof website that's the CIA that's the Conversion Intelligence Agency.

Brett:

Yeah, that would be fun. I'm getting all kinds of ideas now for YouTube videos where you're dressed up like Dragnet or something like whatever that investigator was, and that's super old, that was even before my time, but you're dressed up like an interrogator and you're on the scene, you're on the case, so I like it. So Quinn yeah, if you would, give us your 30 second background or so and then we're going to dive into the most common conversion crimes and how to avoid those and how to make your site better and convert better, but yeah what's your quick background?

Quinn:

Yeah, so I started my business right out of college so I started freelancing design, eventually moved into websites and then user experience design, helping websites increase conversions. And so I ran an agency, Zeda Labs, where we helped on some businesses scale, and through all of these big projects that we were doing we found that the 80/20 of conversion rate optimization and user experience was usability testing. And so yeah, we built Conversion Crimes to help small businesses do that because this tool was out there for enterprise companies and we wanted to bring it to the SME market, so yeah.

Brett:

Cool. So a lot of times we walk about our guest's company at the end of the show, but I want to just let people get a teaser, an idea, what is Conversion Crimes? Because I love the model, I love the way it works, so talk about that.

Quinn:

Yeah, so basically it's usability testing. We work on our things, we're on our store every day, we know how to find things, how to filter for stuff, but you don't know what it looks like to someone for the first time. And where they're struggling, what they misunderstand, what they get frustrated with. So we have testers that meet your demographic and we have them record their screen while speaking their thoughts out loud while they're trying to do something like find an item in your store, answer a question about it, add it to cart and check out. And by watching these videos you can understand, just pinpoint exactly where the friction is. And if you fix the friction, you increase conversion to improve the user experience, you have happier customers, and yeah.

Brett:

Yeah, usability is key. Having good graphic design and pleasing aesthetic, I love that, but usability that's where it's at. It's impossible for us as business owners to fully look at our site objectively. We can to a certain degree put ourselves in our customer's shoes no doubt, and we can think about, "Hey, is this easy for me to navigate?" But we can't fully thing like our customers and I'm confident from feedback that I've heard people listen to these records they're like, "Oh, I've never thought of that, didn't even see that, I was so used to that." So super, super helpful. Well, we'll circle back to that in a little bit but let's talk about what are the most common conversion crimes that you see that just come up again and again?

Quinn:

You know, so really the most common one is that people go to a website and they don't know who it's for, what it's about, what they're supposed to do there. To really that's the value proposition's not clear. On eCommerce stores it could be that they're showing a collection or something and so they assume that the store's about bags when it's really about something else or that's just one piece of the store and so they bail out. And so yeah, the biggest one is value proposition. And it seems like that would be the easiest thing to do, but it's actually one of the hardest because the simpler and more concise that you can explain something, the longer it took to figure that out.

Brett:

Yeah, like that old saying, I'm sorry that I wrote you a long letter I didn't have time to write a short one, or something like that. But yes, to get something concise and clear takes work, it's like a tagline for advertisers is one of the hardest things to create because it's so concise. So yeah, what are some great examples here, who really does this well where you land on the page and you know, "Okay, I know exactly what the benefit is here for me as the user, as the shopper, and know exactly what I need to do next. And I know why this product is different or better than other or why it's better than me doing nothing." Do you have any good examples?

Quinn:

Oh man, those are hard to do right off the top of my head.

Brett:

I know, so if you don't have examples then, maybe you can think of some as you talk, and if not I'll think of some tips on how do you make that proposition really clear.

Quinn:

Yeah, it's a hard process. Even I'm struggling with this for Conversion Crimes because it's like what is that sentence or thing that's really going to attract people's attention and make it super clear exactly what you do, who do you do it for, and why it matters to people. I think one of the examples that I pulled up recently was Bench, and I'm going to look it up.

Brett:

Do it, yeah.

Quinn:

Because they said, "You run your business, we'll do your bookkeeping." Very clear, it's like I don't want to do my bookkeeping so they take care of it, "Get a professional bookkeeper at a price you can afford and a powerful financial reporting with zero learning curve." So it's just short, sweet, tells me everything I need to know. It's like if that's not me I'm going to bail out, but if that's totally me I'm going to go ahead and continue to learn more.

Brett:

Yeah, I am a big fan of cereal. I love cereal, I would eat it multiple times a day and most days if I could, but it's not very good for you and I'm trying to stay at least somewhat fit and I'm just past the 40 year old mark so it's not as easy to stay fit. And so I discovered this company called Magic Spoon, I don't know if you've heard of it. It's high protein, low carb, almost no carb cereal. It tastes really good, some of it tastes like Fruit Loops and some of it tastes like Cocoa Puffs kind of. But anyway, you get to their page and it's, "Healthy cereal that tastes too good to be true." So it's a really good line. But then as you see it, it's fun because cereal's fun. And their market is adults, their market is adults who are on a ketogenic diet or just trying to go low carb, and so it's very clear it's high protein, low carb, it's sweet and delicious. The site's fun, easy to navigate, I think it's a really example. And they got me hooked on the subscription and I've kept ordering. So that's one, and it's easy because it's very different. Most cereal is high carb and high sugar so this is high proteIn lower carb, sugar, and they do that in a fun way so I thought that was a pretty good example.

Quinn:

Yeah, another one that I liked was skatertrainer.com. So it's the original Skater Trainer, the number one tool for mastering skate tricks fast. Build confidence, practice anywhere, patented design made in the USA. But it's their background video that goes with that that shows you exactly what the product is and what it does, so just immediately clicks there. Even if the text isn't completely on point, it's just all those elements together paint the picture really well.

Brett:

Yeah. I'm trying to be a surfer, but I live in Missouri so I can only surf a handful times a year.

Quinn:

There's no surf there.

Brett:

No, there's zero. You can actually surf behind a boat, you can surf at the lake. That's pretty fun, you can do that.

Quinn:

That's wakeboarding.

Brett:

Well no, there's wakeboarding and then there's wake surfing.

Quinn:

Really? I've never heard of that.

Brett:

It's cool, I'll share what that looks like, but it's fun. And so anyway, I recently bought at the recommendation of some peeps a balance board from Revolution Balance Boards and they do a really good job. So basically it's a board that sits on this long cylinder so you balance on it and you can kind of mimic you're riding a wave, but they do a really good job of explaining what the board is, what you're doing, and it's a really clear value prop on their pages. It's revbalanace.com, another good one to check out.

Quinn:

Oh yeah, those are cool. I want one of those.

Brett:

Yeah, they're really fun, yeah you'd like it. So tips then in how you make the value proposition clear, because like we talked about it's not super easy.

Quinn:

Yeah, it's really hard. But when I'm writing stuff, when you can sit there and you can brainstorm all day, sit there any write out hundreds of headlines to figure it out. But really the best thing that i found is just to talk to people, talk to the audience. I record a lot of my sales and demos calls and I go through the transcript and I'm just highlighting cool things that they say, and that's actually how we got one of ours on Conversion Crimes. It was, this guy was just like, "Yeah, every store's losing money somewhere."

Brett:

Yeah, isn't that great? It's such a good line. My buddy Austin Brawner and I, Austin runs a podcast eCommerce Influence, shout out Austin Brawner. We were just doing a joint podcast together the other day and he was talking about he interviewed somebody, I can't remember her name, but she said, "You don't need to be a copywriter, you need to be a copy paster." Because you really need to just listen to good lines that customers or users are giving you because they're using the language of other customers and users and then repurpose that, copy and paste that. And so obviously you're going to write some too, but that's where some of the gold is is just in what your customers are saying.

Quinn:

Exactly. Like running surveys, so one of the questions that I love to ask is like, "How would you describe us to a friend?" And so we send that out, so we see how are other people describing us. And so it's like literally you don't have to sit there and wrack your brain to come up with all these ideas for your value prop, it's literally just asking your customers, surveying them, getting on calls, doing transcript, whatever, and start to see patterns between what people are saying. And then you're just taking that and you just wordsmith it a little bit.

Brett:

Yep. Wordsmith it, make it concise, make it where it's not colloquialisms or whatever, make it work. Okay, I love that. So think about it, is your value proposition clear? And probably it could be better, probably people are going to your site and it's not immediately clear, it's not immediately obvious why you're different, better, valuable, why I should buy it, why I should feel good about spending my money, why you're better than competitors, why you're better than just doing nothing, it's probably not clear. So definitely ..

Quinn:

Yeah, and one of the things that I see that a lot of stores do as well is they put collections and these sliding images on their home page when people come on. And big stores, Target can do that, Walmart can do that, Macy's can do that, whatever, because they already have an audience that knows exactly what they sell. And I see a lot of smaller stores copy these things and do that, but the problem is if someone's coming there for the first time and you're showing a collection or just one part of your store, people interpret that differently and they think maybe that's all you offer or they get confused on the offering. And so what I've found come up in the testing is that a lot of times first time visitors are just confused about he store because they're trying to push collections or a specific product or something like that and they can misinterpret it. Now, it depends on what your store is, where you're traffic's coming from, all of that, how far I would take that advice, but just something to look out for.

Brett:

Yeah, absolutely. Sometimes, we want to learn from places like Amazon and other big retailers, but you can't always do what they do. And you're exactly right, people know and trust Amazon and so they can display everything, but they don't know or trust you yet so you need to be really clear on what you offer and who you are and why they should trust you. Awesome, okay. So getting your value prop clear, super important, not always easy but definitely worth the time. What's next? What's another common conversion crime?

Quinn:

Yeah, so the next one is visuals hierarchy issues. So what I mean by that is it's basically how important is prioritized on a page and when someone's coming you have a million things you want to tell them like, "Hey, we got free shipping. Hey, we got this new product in. Hey, we got this thing." And so you overwhelm your pages with all this information you want people to know, and all the information is important but what is the most important thing for them to know? Because what happens is if they come to a page and they have all of this and it's not laid out in a way that shows them a clear hierarchy of the importance of each piece of information then they don't know where to look and they're kind of scanning around, they're confused. And you want to visually lead people from one thing to the next. So I kind of think of it as volume knobs. So you want to turn on, for example the value prop, the biggest headline, you want that to be the loudest and most obnoxious thing, so you got to turn up the volume. How do you do that? Bigger text, bolder text, having more space around it, making it a color that stands out against your color scheme. All of these different ways are ways you can turn up the volume and make it stand out more against other things.

Quinn:

So then you think about what's the second most important thing? Okay, we're going to turn down the volume a little bit from that so we're going to make it a little bit smaller, maybe it's a regular font not bold, it's under the headline. What's the third thing? Okay, the CTA, so let's make a big orange box or whatever for people to click. So it's just giving them information in the order they want to see it, you're progressively revealing that information. A lot of stores I go to and they just put everything and there's just no method to the madness, it's like total chaos.

Brett:

Yeah, if everything is displayed as important then nothing is important, nothing stands out, so you really got to make that clear. So you talked about a big orange CTA button, do you have any recommendations there? I've heard all kinds of different things on testing your add to cart or your start checkout button or whatever. Sometimes I hear people say it should be a different color from what's on the rest of your page, other people opt to make it blend it and match. Do you have any tips or advice there, anything you've seen based on your user testing?

Quinn:

Yeah, so what I liked to do when I design websites and build websites and stuff is make what I call an action color. So out of all of the colors that you use in your brand, what's the most eye popping attractive one? What's the one that stands out amongst all of them? So you take that one out and you designate it as your action color, and you only use that color when you want to designate an action like CTA. And so that way when it's on the website, it stands out like this is the action that I want you to do. This is attracting your attention. This is the end goal where you're supposed to go so that helps lead people to it, it makes it stand out, it makes it very clear that that's the action. Because you want them to go there, you want to help them with you product, so you're leading them there. Now you don't want to necessarily make everything that you can click the action color, so usually we also have a secondary action color. And sometimes that's just an outline, so if you have a big orange button that's colored in, the secondary button would be maybe white with the orange outline or something like that. Yeah, I don't like when they make everything the same color because it blends in and you don't really know where to go.

Brett:

You don't know where to go, you don't know what to do. There are no visual cues there. Okay, so we want to think volume knobs, so we're going to turn up the volume on some of the most important elements, that value prop, want to turn on the volume but not quite as high on other important things, we want to think about an action color. What are some other tips for visual hierarchy issues and solving them?

Quinn:

Yeah, so breaking out text, giving it space. White space is another way to really give visual hierarchy. So a lot of people try to crowd things in and push things in, and the more space you give things the more the eye is able to move from one piece to the next, so I kind of also talk about progressively revealing information. So sometimes what you can do is, okay what information do they need to click on this thing? Give them that information. Once they click on that, then you can reveal the next information that they need or what have you.

Brett:

Don't want to overwhelm people. You want to give them enough to allow them to say, "yes I think this is what I'm looking for," so they click and they keep taking the next steps and so there is a progression there, I really like that. Okay, awesome. Okay, so we got value prop, we got visual hierarchy issues, what's the next conversion crime we need to avoid?

Quinn:

Yeah, so specifically for eCommerce stores are the filtering issues. So how people filter through the different products that they have, the different categories, how they're grouped together. So that can be confusing, especially if you have a lot of products with a lot of variables in it and things like that. So there's one store recently that I was watching testing for where they had a lot of colors. And when I say a lot of colors, I mean 100. So it was like they had a filter for every color. It was like baby blue, dark blue, navy blue, all 20 different shades of blue, so to actually find teal the tester couldn't find it. They actually scrolled past it like six times and they got frustrated not being able to find it. It was there, but they couldn't find it.

Quinn:

So having a really good hierarchy in your filtering so you're filtering products in a way that people actually use them. And also again going back to that progressively revealing information. So if you have a lot of colors, how can you filter those in a way that progressively reveals it? So start with blue, and then's it's like baby blue, navy blue, all the different blues that can go in, because then people are going to be able to find that so much faster. So if they sell blue, it's like blue, okay there's teal, all right maybe I should put that in green, I don't know, maybe that..

Brett:

No, I'm definitely the wrong person to ask there. But I get what you mean. So simpler options, do I choose blue and then once I get to blue then I can view other options, other blue variations.

Quinn:

Exactly. And also how they organize the filters. I've had sites where it's like they have five items and they have six filters, you don't need filters, you have six products. What are people going to filter through? Yeah, it's just the way that they also categorize items as well it not necessarily the ways that the users are thinking or wanting to filter things by. So a good example it maybe they have filtering by brands or cut or any of these kind of things. Like one of them had themed, but the customers weren't looking for those themes, they were looking for different things.

Brett:

The customers weren't thinking in themes, they were thinking specific product or something.

Quinn:

Yeah, they were looking for a specific cut or something like that, or they didn't know what the brand was and it was like they could only filter by brand. So making sure that your filters and categories match how users actually would filter and looK for that product, which is harder than it looks sometimes too.

Brett:

It is hard. So sometimes do you need to filter or do you need to categorize by use case? So I'm trying to do X, or I'm this type of person, I'm a business owners, or I'm a homeowner, or whatever, and so you kind of categorize that way. Or if it's something home décor or furniture related do you shop by room or do you shop by category? So thinking through those things. Any suggestions, obviously once you have something built and you can send users through it using a tool like Conversion Crimes would be super helpful. But other thoughts on how do we try to understand how do people shop for this? And so let me build my site accordingly.

Quinn:

Yeah, so usually when I'm starting anywhere for that stuff I kind of go and look and see what other stores are doing, especially the big ones, and then look at the smaller ones as well, how are they categorizing it? And that's a good place to start because you don't want to be wildly different. There is a standard for a reason because people expect things to be a certain way and so there is a time when you should deviate, but it's also good just to get a good baseline to understand what everybody else is doing in the market. I usually go through and I categorize like, okay they're all doing this, well why are they all doing that? There's a good reason for it so I probably need to do that too. These ones are doing this differently, why do they do that differently? What the reason for it, does that work for me? And that's kind of how I think through it and come up with my own for my own or whatever I'm working on, that's kind of the process that we've gone through.

Brett:

Yeah, totally makes sense. And as far as those things where you want your product to be different, you want it to stand out, you want the value proposition to be unique and to be compelling. And hey, some of your colors and designs and photos, that can all be, but you want the structure to feel comfortable and to feel familiar in a certain way. We don't walk into a store and think like, "Well, where's the checkout? Is the checkout on the sides of the store?" No, you know where it is, you're going to find it and you kind of know your way around. Things that are too disorienting can be problematic for sure.

Quinn:

Yeah, exactly. It's like okay everybody usually has their chat bot in the bottom right screen, so if you're going to move it you better have a good reason for that. The checkout is usually always in the top right. The menu and logo is always in the top left. And so when you change things up, it kind of catches people off guard. And in some ways, it can be a good thing, there's a reason to break the rules sometimes. Rules are meant to be broken. But the rules are also there for a reason, and so yeah people like things that they can ..

Brett:

But not just because, we don't break the rules just because. There should be some kind of strategy or some kind of, "Hey, I'm trying to wake someone up by breaking this rule," not, "I'm trying to confuse people by breaking this rule.

Quinn:

Yeah, exactly.

Brett:

Okay, awesome. So we have value prop, we got visual hierarchy, we got filtering issues, what's the next conversion crime?

Quinn:

Yeah, so pop ups. And this one's a little bit controversial because testers in general hate pop ups. They're always going to complain about them on usability tests especially.

Brett:

But do they work?

Quinn:

Exactly. So you may upset the tester and they may be talking crap about it and stuff but you're like, "Okay, but it converts. I may annoy you, but I didn't annoy the five other people that did this."

Brett:

Right, maybe it annoyed them at first but then once they actually saw the discount and they liked it, "And oh by the way, I sold 30% more," or whatever, so yeah.

Quinn:

Exactly. So this one is very contextual, you have to take it in with the other information and understand if that is valid or not valid. So a lot of the things that come up with this is the pop up comes up within a couple seconds of landing on the site and then the chat bot comes up, "How can I help you?" Then there's the pinwheel that flies out on the side like then you just hit me within three pop ups and I've been here like seven seconds. I'm overwhelmed. So that's a very valid experience that that's overwhelming and people in general don't like that. But if somebody's browsing the site and they're on a product page and they've been on the page for a minute or what have you and they get a pop up that says like, "Buy now, save 10% on your order." Am I going to click on that when I'm ready to buy? Yes I want to save 10%, that's going to convert, that's going to work. So it's about right now, right place on pop ups and the sin, the crime is just overwhelming people before they've even had a chance to know who you are.

Brett:

Yeah, and think about it from a physical store perspective. We walk into a physical store, maybe it's the first time we've been there, we want to get our bearings, we want to look around, and I've some studies that show if an associate comes up right away and says, "Hey, what can I help you find or what can I help you do?", most of the time a customer will say, "I'm good, I'm just looking." But if the customer goes somewhere specific and then the associate asks, then sometimes they get feedback. So you can just imagine if you walk into a brick and mortar store and three people bombard you with, "Hey, can I help you with anything? Are you ready to check out? Are you ready to buy something?" You'd want out of there, you want to get oriented first, and the same is true online as well.

Quinn:

Yeah, exactly. I kind of think of it as like when you're at a conference or whatever and there's people, you're like, "Hi, I'm", and they're already handing you the business card.

Brett:

And you're like, "Easy buddy, I didn't say I wanted your business card."

Quinn:

Yeah, I don't even know you yet.

Brett:

Right, exactly, that's another great example. Okay, so pop up issues, right time, do some testing, be cool about it, I think there's definitely a right way to do it. And I think it's been established, if you do the right kind of pop up you're going to get more email sign ups, you're going to get more of all of that, but just do it the right way.

Quinn:

Yeah.

Brett:

Okay, awesome. What's the next conversion crime?

Quinn:

Yeah, so the next one is that the process is not clear. So this kind of ties in a bit to the visual hierarchy one as well but this is more about the steps that you have to take. So there's a lot of stores out there that are like, "Okay, here's the product," you buy it, you put it in your cart, you check out. But there's also tons of stores out there where they have, "Okay, we're doing customized products." Whether it's printing t-shirts or they have where you can make the custom bedsheets or now they have glasses, whatever it is, the steps that the customer has to do to create that product, to customize the different things about it, is unclear. And that's one of the other crimes because if a person can't figure out how they're supposed to customize the product or you've made it confusing, then they're not really going to sit there and figure it out, they're just going to bail.

Brett:

Yeah, exactly. We are impatient online, because maybe in a physical setting or in person setting we don't want to offend people or don't want to appear rude or don't want to appear impatient, some of us anyway, but online no worries, I'm out of here if this is unclear, it's not working, I'm bailing because I'm not hurting anybody's feelings. Yeah, so great, so then tips, suggestions, how do we make the process clear?

Quinn:

Yeah, that one's a little bit harder because there is definitely UX involved in that, you have to think about it kind of goes into all the other said crimes put together and that you have to progressively reveal that information. Don't give them all the options at once, what's the first option that they need to make? And make it clear how they're doing it. I'm thinking of a very specific store in my mind right now where they sold all kinds of household products but you could custom design them and stuff, and I remember sitting there and I had no clue how to customize the product on the thing. And then when I finally clicked on something it did something I didn't even expect, which surprised me. So that one's about really thinking through which steps does the customer have to go through to do these? How can I make that as clear as possible and as obvious as possible for them so they go through it, they know exactly what they're supposed to do, and we meet their expectations along the way. Because that's another one, another crime is mismatched expectations. So our customer clicks on something and they expect one thing, like to get more information, and then it opens a Facebook group, you're like, "Wait, why'd you send me to Facebook?"

Brett:

Yeah, really thinking through what are people expecting when I label the button or the action or the section this way and then am I delivering on that expectation. Okay, awesome. That was conversion crime number five, process not clear. I believe we have one more, the sixth and final, maybe not the final conversion crime, I guess these are the big crimes, there could be subtle crimes, there could be misdemeanors that fall..

Quinn:

Yeah, there's a lot more crimes. We did testing on a lot of SME stores and these were the commonalities, like the top ones that came out over about I think about 35 stores.

Brett:

Okay, cool. So conversion crime number six, what is it?

Quinn:

Navigation issues. So with the site menus and stuff on the stores. So some of the big crimes we see here is gian mega menus, which if you have a ton of products, mega menus are helpful, but if you have not put again visual hierarchy on those menus then people don't know where to click. So if they go to this menu and there's 40 things on it and they're looking for this one thing, people skim and if every single thing is the same volume then they can't skim, they can't use that as a map to the information. So I kind of think of it like this, when you go a Chinese restaurant and they give you this menu and it has 100 items on it and you're sitting there looking through it and you're like, "What should I eat? What should I go?" And it takes you like 30 minutes to figure out what you want to eat. Well, when you go to more of a fine dining restaurant, they've just got like seven items there. And you can look at it in literally 20 seconds be like, "Yep, I want the chicken parm, that's what I'm going to eat tonight."

Quinn:

And the same thing is with menus, you got to make it what are the top seven categories? Make those big bold fonts. And then t-shirts, pants, whatever. And then you're going to put the smaller sub items in front of those which helps make your mega menu or the big navigation more easy to navigate, which helps people find exactly what they want. So yeah, it's kind of all of the things in on, the categorization, how they filter it, the visual hierarchy, being able to progressively reveal even if that's a big heading and then smaller ones underneath it.

Brett:

Yeah, I love this. First of all this has been fantastic, it's been a ton of fun, you're great to interview and thoroughly enjoyed this. So let's talk though, do you have resources? Do you have anything for people to download or check out that walks through conversion crimes or anything you'd point people to?

Quinn:

Yeah, we've got a case study thing that we just made that kind of goes over these conversion crimes, so I can send that to you or we can link to it.

Brett:

Awesome, I'll totally do that. And then yeah, so anything else you want to share about conversion crimes? So if someone says, "Okay, yes I want user testing, I want to have users goes through my site and my product detail pages and I want to see these recordings," how does the process work? How does someone go about getting signed up?

Quinn:

Yeah, so there's kind of two ways that we work with people. We have our self serve or guided. So a lot of friction to getting started with testing is, "Well, I don't know how to write a test." So we actually write the tests for you. You tell us, "I want to find this information," or, "I don't even know what I'm looking for, I just want to find my crimes on my site," or, "People are hitting me up support asking what color backpacks I sell, why can't they find that on the product page? Why are they hitting me up?" Or, "I'm getting a lot of customers saying I'm a scam, why do they think I'm a scam?" We had that one. So we take that, we write a test, we send it out to the testers and then they deliver it, you watch the videos, you make notes, you tag issues. And you kind of extrapolate the information from that and make changes on your site. Now, some owners they want to save time, they want someone to do it for you. So we actually also have a pool of experts that will actually watch the videos for you, make the notes, then make a test summary and then say, "Okay, here's all the crimes we found, here's exactly how you fix them."

Brett:

Nice. That is awesome. And so do you have more people choosing that option or the self serve option?

Quinn:

Both. I find the expert insights is a bit more popular.

Brett:

Yeah, just easier, we've not done tests we maybe need someone to walk us through that.

Quinn:

Yeah, so sometimes we have customers that they start with the expert insights to understand and then they move into watching the videos themselves or they just always have us do it. It's really easy because you take it and you're like, "Okay, yes, yes, yes, yes, no," or whatever, and they hand it to a developer and then it's pretty hands off ..

Brett:

Cool. That's awesome. Any favorite stories, success, wins, surprising things that people find out by going through and using your testing service?

Quinn:

Yeah, so my favorite one is the scam. So they were getting these emails from customers accusing them of being a scam and they're like, "Our customers are whack, that's totally not the truth."

Brett:

Something's wrong with our customers.

Quinn:

Yeah, they were literally, and I was like, "Hey, let's run a test, let's figure it out." And so we ran this test and so they ran a high end consumer electronics store so they also had a financing option, so when you went in and put stuff in the checkout you could then go to a finance kind of thing. And what was happening is that when they were sending that form to the third party, it was putting an error in one of the form fields, so it was automatically sending the information so the customer didn't have to enter it again, but it was sending that information incorrectly. So the customer is getting an error but not knowing what they did wrong. And given that we're dealing with financial information, they thought the entire store was a scam and they were stealing it and they were going to steal their identity. They're going to have to close down their credit.

Brett:

Yeah, that makes them feel very suspicious.

Quinn:

And so when they saw the video of that they literally, it's a five minute fix, they just took that thing off the form and their conversions went up like 120% after that or something. I can't remember the number off my head, it was 100 and something. And the other interesting thing was their cart value went from 1000 to 1500 to 1800, like literally overnight.

Brett:

Yeah, that's beautiful. And one of the things we talked about too as we were prepping a few weeks ago is sometimes people get tired of their website or it's not quite performing the way they want it to or maybe their competitor does a site redesign and so they have website envy or whatever. And so they just decide, "Oh, I'm just going to redesign my site." Well what would probably be a better first step is do some user testing and see if there's just some little tweaks and some little changes and some little iterations that you can deploy that will make a big difference, because that has a much higher probability of success versus a complete overhaul and redesign which is expensive and timely and, oh by the way sometimes it doesn't even improve.

Quinn:

Risky.

Brett:

It's risky. Sometimes, and I remember seeing this, we used to do marketing for a design agency and a developer, and sometimes you'd redesign a site and it looked better but it didn't convert as well. So now you've spent all this money redesigning a site that now performs worse than you had before, which is scary.

Quinn:

Exactly. Yeah, I've had a few friends that redesigned their stores and their conversions actually dropped significantly. And it's because it's risky, you're making so many changes at once. And I used to sell these websites, I used to do these big redesigns, and I actually found my most successful project was actually a 16 personalities, and what we did was it's like, "Okay, what can we launch and execute in this time period to make this site better?" So it's like, "Okay, it needs a new header, it needs a new footer and we need a new value proposition." Boom, done, traffic doubled, conversions doubled just from that. And it was like the next month, "Okay, what are we going to do here? Okay, the sales page needs some work. Okay, what are some tweaks we could make there?" And we just kind of tweaked it to success rather than change everything at once, because when you change everything at once you don't know what made it do what.

Brett:

Yeah, you don't know what was successful or you don't know what just broke, you have no idea. And yeah, this process of constantly iterating and improving, that's the way Amazon works, that's the way Google works, it just totally makes sense.

Quinn:

Yeah, and if you make it a habit to continue to improve and find this low hanging fruit and make little changes, all of that compounds over time. I've been really inspired by James Clear's book, Atomic Habits.

Brett:

Atomic Habits, I love that book.

Quinn:

He's just like, "Get one percent every day and that's 37 times improvement," or something, I can't remember the exact number.

Brett:

Yeah, it's 360% better, so it's basically 37 X, yeah.

Quinn:

Yeah, exactly. And that's way less risky, it's way better to do that. So rather than redesign your site, it's like, "Hey, let me visit this every month or every quarter, bi-monthly, whatever, and find these things that we can tweak and just do that over time." It's like interest, it compounds.

Brett:

Yeah, and I said that incorrectly, it is 37 X not 360. One percent compounded over 365 is basically 37 X. Yeah, so man it just works, it absolutely works. So highly recommend it. Quinn, this was awesome, thank you for delivering the goods, appreciate the time and we'll have to do this again sometime.

Quinn:

Awesome. Thank you for having me. This was a really fun time.

Brett:

Good, good. So check it out, Conversioncrimes.com, see for yourself, I think you need this tool, I think it's going to make your website, your business, your life better, so check it out. As always, we'd love to hear from you, we'd love to hear feedback. And hey, if you haven't done it already, leave that review on iTunes, that helps other people discover the show and it would make my day. And so with that, until next time, thank you for listening.

‍

Ryan McKenzie is doing what he can to help save the planet.  His super-effective laundry detergent strips are keeping millions of plastic laundry jugs out of landfills each year.  He also wants to save your brand from bad video advertising.

I invited Ryan on the show again because his approach to video advertising is just awesome.  Here at OMG Commerce, we have the privilege of running all of his Google and YouTube ads so we’ve seen firsthand their rocket ship growth.  They were Canada’s 2nd fastest growing start-up and have grown from 7 employees to 200 in record time.  In this episode, we break down Ryan’s  7-step framework behind his video ads that are fueling $100k/day in ad spend.  Here’s a look at what we cover:

• What is a powerful pattern interrupt and how to use one.

• Why having a villain in your ads is a good thing.  Hint: Your villain probably isn’t a person.

• How many and how to most effectively use Calls to Action.

• Biggest surprises on what works and what doesn’t.

• How to use logic and emotion.

‍

Ryan McKenzie

Via LinkedIn

Tru Earth

Via LinkedIn

Via Facebook

Via Twitter

Via Instagram

Via YouTube

Mentioned in this episode: 

Groove Life

Purple Mattress

Harmon Brothers University

Travis Sago

Tru Earth Ad “Stop!”

‍

Episode Transcript:

Brett:

Well, hello and welcome to another edition of the E-commerce Evolution podcast. I am absolutely thrilled to be discussing this topic we're about to unpack for you and thrilled about my guest who's coming on the show. Guest is a personal friend of mine. We hang out for a while or hang out a number of times over recent years, maybe not so much with the pandemic but pre-pandemic we did and we hang out online a decent amount.

Brett:

And so today, we're talking about YouTube creatives and really video ads specifically. So video ads across platforms and the guy I'm bringing on the show today, he and his company are just creating some fantastic content. We have the benefit of running this content on YouTube and GN and it's just brilliant.

Brett:

This episode is brought to you by E-commerce Influence. If you enjoy my podcast, you've got to check out E-commerce Influence hosted by my friend, Austin Brawner. Austin interviews world-class e-commerce operators like Native Deodorant founder, Moiz Ali, MVMT Watches CEO, Jake Kassan, and Pura Vida Bracelets founder, Griffin Thall. He deep dives into what's working right now to scale your business and he offers a refreshing break from the crushing culture plaguing our industry. The E-commerce Influence podcast will not only change your perspective on changing your business but change your perspective on what's possible for your life. I've known Austin for years. He's the real deal and he's someone you need to listen to if you're serious about growing your business. Check out the E-commerce Influence podcast for free wherever you get your podcasts. And now, back to the show.

Brett:

My guest today is Mr. Ryan McKenzie. Ryan's an awesome guy. He is also the co-founder and CMO of Tru Earth, a laundry detergent strip company, and so you'll get to hear all about Tru Earth in a minute. They are just absolutely blowing up in Canada, the US, and beyond. And they've created some amazing video ads. We're going to unpack those and want to dig in a little bit to what Ryan's philosophies are and what the anatomy of a great, winning video ad is. So lots of fun stuff to unpack there. But with that, Ryan, welcome to the show, man. How you doing? And thanks for coming on.

Ryan:

I'm great, man. Thanks for having me, Brett. This is actually the second episode that we've recorded I think.

Brett:

This is the second episode. That's right.

Ryan:

Yeah. This is the second.

Brett:

Man, it's been a little while. Yeah. So we were just reminiscing about when we met and I think we've got it nailed down. It was at Blue Ribbon Denver, which was one of Ezra Firestone's mastermind. I just got off stage. I think we were in route to the bathroom and we struck up a conversation and the rest is history and so it's been a fun ride for sure. And man, you guys have just absolutely exploded because that was just maybe two years ago, three years ago. I'm terrible with dates by the way. So I have no idea.

Ryan:

Yeah. I think it was three years ago this summer. Yeah. Because Nashville was the January event. So yeah. It's been about. It was before Tru Earth because I did ... Tru Earth didn't exist.

Brett:

Right. It was even pre-Tru Earth, which blows my mind even more because you guys are setting growth records and killing it and just doing amazing things. So really, really fun. Before we dive into your philosophy, your formulas for winning video ads, tell everybody what is Tru Earth, why is it so unique, why are you so excited about it, and why is it blowing up?

Ryan:

Yeah. It's been pretty crazy but, yeah, Tru Earth is, as you can see if you're watching on video, it's this little tiny laundry detergent strip that replaces liquid laundry detergent, powder laundry detergent, or even pods. And what's crazy about it is this strip weighs 1.7 grams where a regular load of laundry weighs anywhere between 30 and 45 grams, which is like an ounce to an ounce and a half ...

Brett:

The laundry detergent itself, like liquid detergent.

Ryan:

Yeah. So it's super tiny. It's premeasured. You don't have to measure anything. You just take it, throw it in your laundry.

Brett:

It's smaller than the size of an index card for those who are just listening and not watching.

Ryan:

Yeah.

Brett:

It's a piece of paper basically. In comparison to the iPhone, it's considerably smaller than Ryan's iPhone 12.

Ryan:

Yeah, yeah, yeah. And then on top of that, it comes in ..

Brett:

As thin as paper.

Ryan:

Thin as paper. It comes in a cardboard sleeve, which is compostable, which helps keep plastic laundry jugs out of landfills since very small percentage of them are recyclable. So it's been really fun. We're getting to grow a business that's positively impacting the world and helping make sure that my kids and your kids get to have a healthy planet.

Brett:

Yeah. I love it. And what's so interesting is that it's become more trendy to talk about environmental causes and to have a smaller footprint and to be more responsible as a company and there's certainly some companies that have nice marketing messages but you get the sense that ... okay. I don't doubt that you believe you're making an impact but are you really? But with your product, it's so unmistakable. This is making a massive, massive impact because laundry jugs are a real problem and, again, if this small strip of paper replaces laundry detergent, it is a measurable, meaningful impact.

Brett:

And here's the other thing. My wife is used to this now because I've been in the advertising business forever. So I'm always like, "Hey. We're going to try a new vacuum. We're going to try a new this crazy thing." Because I met a client and this ... we're going to try this out. She's used to it. So when I said, "Hey. We're going to do laundry strips," she wasn't totally shocked but she was like, "What? What is a laundry strip?" And we have eight kids and I know you know this, Ryan. We have like a massive washing machine. This is like industrial size. We put this washing machine to the test. Multiple loads a day, everyday, and I would say my wife was skeptical at first.

Brett:

She was like, "Hey. I know this guy is good but it's been fantastic." She loves it. It works very, very well and, if it works for us, it'll work for anybody. And so great, great product.

Ryan:

Appreciate that. That's a great testimonial. We should be recording this. Oh wait. We are.

Brett:

I'll send this over to you. We .. I mentioned that. I got to record a testimonial for you. I will do that. I'm committing to that on air. I will record a testimonial for Tru Earth. So awesome company. Awesome background. You guys are based in ... I don't know if anyone can tell. You've got an awesome accent. Tell me where you're based though and then you said some Canadian growth records or something like this.

Ryan:

Yeah. I'm in Vancouver, British Columbia. So you see. Well, actually we're in Port Moody, which is like 25 minutes from Vancouver, but we are on the water, which is pretty sweet. But yeah, we were the second fastest growing company. Sorry, sorry. Second fastest growing start up in Canada last year and just to give you some context, when we won that award, we had nine staff and now we have like 229. So I think we got a pretty good chance this year.

Brett:

I think you're keeping that pace up to say the least.

Ryan:

Yeah.

Brett:

You guys are just ..

Ryan:

Yeah.

Brett:

So that's just awesome, man. Well, like I said, we have the privilege of running your YouTube and Google ads and stuff and you guys are just cranking out just some fantastic video content that's killing it on Facebook as well. And so I want to unpack ... let's unpack your anatomy. I think it's a seven step framework for a winning video ad and then, we'll get into some details about some specific campaigns and stuff too. But can you unpack that for us? Let's start with ...

Ryan:

For sure.

Brett:

Step one of that creative framework.

Ryan:

Cool. So there's seven steps and I'll give like a brief overview of what happens in each step and that should probably give a little bit of insight. So the first and very most important step is the patten interrupt. That's basically, you need ... we're in this attention economy and it's not that people don't have an attention span. It's just that they're very selective about what they give their attention span to. And I know this because we produce four minute videos and absolutely every person that I show my videos to says, "You know what? This is going to convert way better if it's shorter. It's going to do way better if it's short."

Brett:

Yeah.

Ryan:

Our attention rate is absolutely insane when people watch these videos and the longer they watch, the more likely they are to purchase. And it all starts off with hooking their attention. So it could be ...

Brett:

And what's interesting and just a little side note to throw in here, that's been true on YouTube for a while. And we've found this minute and a half to three and a half to four minute videos on YouTube and crushing it. And so some people accept that pretty readily but almost everybody is pushing for shorter videos on Facebook and you guys are finding these long form videos are crushing it on Facebook too.

Ryan:

Totally. Yeah. They're everywhere and everybody, everybody tells me, "You need to try making a shorter cut," and, you know what? We make a shorter cut every single time and, every single time, the shorter cut loses.

Brett:

Yeah, yeah.

Ryan:

I mean I'm sure there's content ... there's times when potentially that will work but it all starts out with a pattern interrupt and that could be throwing a bucket of water in somebody's face. Our first big video like this, we threw water in Thalia's face and she had like makeup running down her face. It was awesome. The second video, we had a couple ... we had Trey blowing laundry with his 52 inch chest and this last one that we put out, it's just really fast cuts with Trey, again, with a big afro wig and wearing a big, blue velour suit. And you know ...

Brett:

He's like a 70s game show host, right, in this one?

Ryan:

Yeah.

Brett:

Yeah.

Ryan:

Yeah. Big microphone and it's just basically what do you have to do to pull people in. And it doesn't necessarily have to be related to whatever it is you're doing or selling. It just needs to make people stop what they're doing and give you their attention.

Brett:

Yeah. Which is so important and it's often overlooked, right? But unless you have someone's attention, you cannot sell them or show them anything else. And I love the phrase pattern interrupt. That's a phrase that maybe some people are familiar with but it's something unusual, out of the ordinary that doesn't follow the normal script or the normal pattern we have in mind. So someone just talking head on the camera, that's not a pattern interrupt. That's something we expect to see from an ad.

Brett:

Now, maybe someone that's a talking head can say something that's so outlandish or so unique or so on point that it does jolt you out of your slumber or does cause you to pay attention but, using a pattern interrupt like you've talked about where you're combining something visual with something spoken ... and it doesn't even have to directly tie into ... I mean you guys always tie the message back to the benefit of the product and it's beautiful. But throwing a bucket of water in someone's face, a 1970s game show host, right, with a massive wig, a dude with a big barrel chest blowing laundry like he's the wind, that's all very unique stuff.

Brett:

So you're getting their attention. So pattern interrupt, step number one. Most important. Also, can be pretty challenging. Any specific stories and any time that hasn't worked or any surprises or anything you can share on the pattern interrupt that they thought was maybe going to go well but didn't or maybe they thought wasn't going to go well but did?

Ryan:

Yeah. Yeah. So we did a video. It's still running. It's not ... it wasn't a total bust but we did a video with a great big Sasquatch and he looked like ... I thought the Sasquatch was really cool. We spent a lot of money getting that prosthetic head made but it kind of looked like he had one foot in the grave. He was a bit rotten looking.

Brett:

It was a diseased Sasquatch. He'd seen better days. Yeah. Yeah. He was on the downhill slide.

Ryan:

He definitely didn't get his vaccine. But he ... and you know what? The other challenging part about that video and I can't necessarily say that it was because he was ugly but it was a new product we hadn't tested before and so the video actually does really well to warm audiences. It just ... outside of the ones that can't stand him. But we did get a lot of feedback that people hated the Sasquatch and never want to see him again.

Ryan:

And it was funny. We were getting 10 paragraph long emails talking about how they love us but they don't like the Sasquatch and here's an alternative that we think would be really cool. It was funny.

Brett:

We dislike this so much we're willing to write a new ad for you because Sasquatch is haunting our dreams and so please get him out of my feed. Anyway ...

Ryan:

There was a scene too where he was eating beans off the table or the counter and we were talking about how there's E. coli on counters and it's like eating poop. People didn't like that so much either. They were fairly disgusted by that. Yeah. We heard quite a few people didn't like that scene.. people were literally having nightmares.

Brett:

That's awesome. That is amazing. Yeah. Hiding your children from the YouTube screen or the Facebook screen when this comes on. But it is working to warm audiences and so not a total bust and, like you said, not really sure if it was the product or the video, probably a combination of both a little bit. But what's cool is, one, you were willing to run this. You were willing to do something a little bit edgy and then you're also willing to test it and you also found a spot for it to work. And you continue to get some leverage out of that. So that's an awesome example. Love that. Any other surprises on the pattern interrupt stage or step?

Ryan:

Yeah. I mean from the pattern interrupt stage, that one's really the only one that I've ever had that didn't perform. I was anticipating it to be the best one we'd ever done because I thought it was great. But 90 percent of the time, when I think something's amazing, I'm usually wrong. But everything from just having ... we had another YouTube video that you guys ran and it was really basic, really, really basic. I recorded it all. I used a lot of b roll film and I started with just like a stop sign, a stop sign that pops on your screen and I said, "Stop!"

Ryan:

And it's been viewed like 12 million times and it can ... yeah.

Brett:

Super low budget but it just worked and I think you got to test this stuff and you got to be willing to go there. One of the examples that I talk about some, one of our mutual friends, Peter from Groove Life, and I'm actually wearing a Groove wedding ring right now.

Ryan:

Nice.

Brett:

.. launch on YouTube and then one of their first I call it a manifesto video that they created was really great and there was a version of it that actually had a Trump joke in it, right? It was someone that does a Donald Trump voice, a brilliant rendition, and it wasn't like pro or anti-Trump. It was just a ... Donald Trump says, "There's two things I love: Russia and Groove Rings." It was just fun right. But we had people saying, "What are you doing? Get the Trump joke out of there." Whatever. Some that were pro or con.

Brett:

Some that love Trump saying, "You're offending me," and vice versa. But we tested that ad multiple ways without the Trump joke. The Trump joke ... that version always won. .. sometimes yeah. And then I remember also, Brant Garvin from ... used to be from Purple Mattress. Actually he's at Groove now too. Just now making that connection in my head. We talked about this print ad they ran that everybody hated and it was just, "Shh. This is science." That was the headline. And they were like ... he said everybody on the marketing team hated it but I don't remember why they tested it and it was one of their best performing ... that was a display ad.

Brett:

But anyway, just goes to show sometimes pattern interrupt you think is going to work won't and something you think is going to be a bomb actually is a winner. So fantastic. All right. Good stuff. That's step one. Step one: pattern interrupt. What about step two?

Ryan:

So step two is the problem. So ... I'm just writing down that, "Shh. This is science thing," because that's brilliant.

Brett:

Dude, you got to test that. Isn't that funny?

Ryan:

Yeah.

Brett:

It does really make you think, "What do you mean? What is it?" Shh.

Ryan:

The problem is what your product solves. So for us a bunch of different problems that we solve ... this could even be the villain if you're looking at it from a story brand perspective. But we want to talk about ... and if you're a copywriter, you're taking the problem and you're agitating it a little bit. So in our scenario we talk about how there's a billion laundry jugs a year that end up in landfills and ... sorry. A billion laundry jugs a year that are purchased and 70 percent of those end up in landfills because they can't be recycled. And over a time that ends up being a hell of a lot of laundry detergent jugs that are filling up oceans and ... you basically dig into the pain a little. You want people to get emotional about the problem and you want to really get them thinking about how this could affect them essentially.

Brett:

Yeah. I love that. So it's one of those things where people are much more motivated to get out of pain than to prevent pain that may be out there or may be perceived as distant or in the future. Whatever. But if you could show that something is a pain right now, agitate that problem, and you guys do that very well with some of the visualizations you do with dropping this mountain of laundry jugs and just talking about that process and so you're stirring up that pain. You could also go with the ease, ease of use of, "Hey. Just a little strip. Set it in there. You don't have to worry about laundry detergent or pouring it or spilling it or little packets or whatever." So yeah. Agitate that problem a little bit so that people want that solution or stir up the villain. Get the villain. Make the villain seem nasty so we want to attack it.

Ryan:

Yeah. And I also follow ... not necessarily with these videos but just as a whole with all of our copywriting or any sort of sales. We approach it from ... you always approach the child first. So the child's the person that gets emotional about the benefits and gets excited about things and gets, "Oo we're going to get a lollipop!" Because a kid doesn't care about they're going to get a cavity right?

Brett:

Yeah.

Ryan:

And then you approach it as the parent who basically does basic kitchen table logic on, "Okay. If I eat this lollipop am I going to get a cavity? Well, I guess I could brush my teeth afterwards." So you want to check all the boxes for why they could use this and ... sorry, the adult, not parent. And then parent. Parent's like, "We've eaten lollipops before. We've gotten cavities. What's different about this?" Risk reversal and all that stuff. But so I always try to take people through that process. I don't like to let them be logical until they've been emotional. So the problem .. emotion.

Brett:

Love that. There's been several studies done in like the fundraising, not for profit sector and advertising as well where, if you can trigger the emotional side of someone's brain first, there's much less resistance to anything financial. So you trigger someone's emotions. You tell a story about an individual a charity's going to help as an example, people are more likely to give. You start dipping into facts and stats and stuff too soon or get too logical too soon, people ... the logical side of your brain is telling you not to spend, right? Or not to invest money.

Ryan:

Totally.

Brett:

So love that. Stir up the emotion first, use logic then to affirm and backup and support those emotions you stirred up.

Ryan:

Yeah. And even like check the boxes on confirmation bias, right? Like when you believe in something, you're doing research. Smarter people are generally more susceptible to bias than less intelligent people because they're able to go and do research that confirms whatever it is they want to confirm. It's easy to go search Google and find some evidence that the world's flat.

Brett:

Right. Whatever it is. Pick a belief, even a crazy belief, search for it, you'll find all kinds of articles to support that.

Ryan:

Yeah. Exactly. Sorry. I'm tangenting here now. Sorry.

Brett:

Yeah. This is good man. So, we've got pattern interrupt. We got problem or villain. What's next?

Ryan:

The next is the solution. So this is where we're going to introduce our product as the tool or the guide to, basically, defeat the villain or solve the problem. And so in our case, after we show the bottles fall from the sky and that they take however long to decompose and that jug is never going to be recycled and turned into a bicycle, we're going to demonstrate ... we're going to show the product and introduce it as a solution and why you'd want to use this versus the problematic version.

Brett:

Love it. And so we got show the solution. And now that they've been interrupted, they're paying attention. The villain has been made clear and ugly in their mind. Now, let's talk about the solution and, "Hey. This product is the guide. It's going to help us get ... it's going to help you get where you want to go and it's going to help solve this problem." Okay. Love it.

Brett:

So any tips on making the solution believable? Making it something that really resonates or really sticks with somebody?

Ryan:

Yeah. I mean at this point too it's not really about being logical still. You still want ... at this point, we're still introducing the product as an emotional solution to the problem. We're not necessarily spitting out a bunch of facts to try and convince them at this point. We're still saying, "Hey. This is going to fix your problem." And some basic product demos and stuff like that are probably enough to, with smiling, happy people after they use your product, is enough to get them considering because not everybody needs to go through all three of those phases in order to make a purchase. Lots of people will make snap decisions based on emotional purchases.

Ryan:

I bought this ball here. I like to play the guitar a little bit but I suck but I was ... this is a silicone ball and I turned it on once but it was buggy but it's this music machine and you can make like many things with it. And I thought, "That would be really cool. I could make bass lines and stuff like this and I could probably mix it with the terrible guitar that I play." But I did not go through any sort of logical phase. I was sitting on the floor with my kids in the basement, watching TV, and I saw this ad and I'm like, "Oo. I want that." And I just bought it.

Brett:

Right. Right.

Ryan:

It was like a hundred bucks. It was a stupid purchase. I've never used it because it's buggy but at the time I was like, "I've never seen that before. It's really cool. I think I could play with that while I'm at work on calls or something like that." And I bought it and kind of regret it but..

Brett:

But people do that, Ryan. But you rarely do that if almost never if you're tapping into the logical side of the brain only, right?

Ryan:

Yeah.

Brett:

The logical side of the brain doesn't cause you to make impulse purchases but the emotional side does. And so you can take advantage of that as a marketer, right? So we have the solution and, again, you have more on the emotion side, happy, smiley. We're the solution to your problem. Then, what comes after that?

Ryan:

So the next one is a call to action and I see a lot of people actually do this wrong. They'll say like, "Try Tru Earth today," and there's not really that much effort put on it. I would specifically tell the person that's watching the video to click the link below or click the link on this video to try Tru Earth today. And the reason being is, especially older demographic, are you still watching ads on TV. If it's on YouTube or whatever, they probably just think, "Oh, I could check this out in the grocery store." Unless you're specifically asking someone to do something, I would anticipate that they're probably not going to act unless they're very aware of what they're watching.

Ryan:

And stuff like laundry detergent isn't something you normally buy on the internet.

Brett:

Yep. Exactly.

Ryan:

So ..

Brett:

Most people have never purchased laundry detergent on the internet. Maybe they do from Amazon but ... yeah.

Ryan:

Yeah. But ... yeah. So it's very important that you specifically tell the user the action that you want them to do, if you want them to purchase from you online.

Brett:

Nice.

Ryan:

Try Tru Earth today. Click the link below. Just be very specific.

Brett:

Awesome. Now that was step four, Ryan. So we have pattern interrupt, problem/villain, the solution, call to action. Don't we end with call to action? What are the next couple steps? So I'm real eager to hear step five.

Ryan:

Yeah. So step five is where we're going to introduce logic. So this is objections and credibility. So this is where you want to take all the common objections that people have. So like for us, does it work in high efficiency and regular laundry machines? And demoing these things in use. Does it actually get the stains out of your clothes? Showing these in use, kind of like feature benefit or benefit feature, as well as stuff like social proof. Tru Earth has been purchase by more than 300 customers around the world and over 16,000 people have given it a five star review. It's ...

Brett:

300,000 people, right, have purchased?

Ryan:

Yeah. Yeah. So it's stuff like that. It's social proof. It's objection busting. But you're also using this as an opportunity to demo the product in specific use cases so that people ... "Oh. I never thought that I could possibly use it like that." For this section, obviously, dig through all of your reviews. Dig through, if you have some sort of part or thing in your vending cart where you're asking people why they didn't buy. Go through all your Facebook comments and see what questions people are asking. Put them in a list, bucket them into the most common things, and use this as an opportunity to nail all the big ones because this is where you're going to get that logic addressed.

Ryan:

You're also going to want to include, if you have one, a risk reversal. So this is a critical parent. Why is this different than before? For us, we say we have a 30 day risk-free trial, 30 day love it or return it trial. If you don't love the product, return it and we'll give you your full refund. So we're covering logic. We're covering social proof. And we're covering risk reversal in this segment.

Brett:

I love it and I'm a huge believer in social proof. I love video testimonials. I love highlighting the number of five star reviews and even showing little snippets of those reviews. I think the thing to keep in mind here is that there's a right way and a wrong way to do testimonials, right? So again, if we're thinking maintaining people's attention and using emotion, what are the emotionally charged testimonials that we have? What's something that tells a little bit of a story even if it's in a soundbite. Don't just pick the testimonials that say, "It's a great product. I really like it." Well, okay.

Ryan:

Yeah.

Brett:

That doesn't tell me anything. What's moving the narrative forward? What's keeping me engaged? What's making ... maybe overcoming an objection from the customer's point of view? And so all really powerful and I think one of the things I'll highlight about the risk reversal because some people either are hesitant to do it for a variety of reasons or maybe they think, "It's implied. Everybody knows you can return stuff if you don't like it." But something about giving that confidence that, "Hey. It's totally cool with us. If you don't like it, return it. We'll be easy to work with." That provides some assurance and that is in the back of people's mind. So you saying it does make a difference.

Ryan:

Totally. And even in questions like, "Does this actually work?" Half of them, I don't even say, "Yes. It actually works." I just say, "Listen. We're so confident that you're going to love our product that, if you don't like it, we'll just take it back." I don't even need to tell you that our product is good or better than the competitions because, literally, if you don't like it, I'll just take it back. I mean hell, I'll probably just let you take it.

Brett:

Yeah, yeah, yeah. And just give you your money back. Yeah, exactly.

Ryan:

Yeah.

Brett:

Yep. Which is awesome. Fantastic. So we're introducing logic now, step five. Step six.

Ryan:

Step six. Again this is something that I don't see people do very often but it's a second call to action. Again, very specific. You've now covered the problem, solution. You've got them emotional. You've asked them once. If they didn't click the first time, maybe they needed some logic and some risk reversal. This is where you're going to ask them to do it again.

Ryan:

Again, very specific. Try Tru Earth today. 30 day money back guarantee. Click the link below. You have absolutely nothing to lose. And it sounds simple but it's amazing how many people don't do it.

Brett:

Yeah. And it is one of those things and I've said this for years and years. If you don't ask someone to take action or if you don't tell someone the next step, they won't take it. And one thing I will say that we don't always do and some of our clients don't always do is that second CTA. Always do the first but maybe not the second. And if you even go back to email copy as an example. If you think of really good copywriters, there's multiple places in that email where you can click and take action because sometimes all you need to see is the headline and the first paragraph and you're thinking, "I'm in. Just let me click that link." Other times you just want to keep reading and see what's there and then you start clicking on the second or third link. But the same could apply to a video. That first CTA is going to get some people but other people are going to stick around that need more convincing or they just want to keep watching. So that second CTA may hit them.

Brett:

Awesome. Step seven.

Ryan:

Step seven. The final step. So again, this is another thing that I see people do a lot. At the end of a video, if you have your call to action and then the video sits there for like a second, what's going to happen on YouTube is it's going to transition to the video that the person came there to watch. If it's on Facebook, it's just going to either transition to the next video or it's going to have that little loopy watch this video again thing and it's done. So you want to give people time to click. We basically call this the outro. But you can either have some sort of ... your call to action displayed on the screen or what's another fun way to keep them going is put some bloopers at the end for five seconds but with the call to action on the screen so that they have ... you're just giving the person time to click.

Ryan:

If they're on their phone or if they're watching it like on their Apple TV or something, they might need to scramble to get their remote so they can click.

Brett:

I bought a set of outdoor furniture during the pandemic from a YouTube ad I saw on TV for a company called Yardbird. I was so impressed that I'd been shopping for outdoor furniture.

Ryan:

Awesome.

Brett:

But they had a great ad. But it's so true. Now more and more people are seeing YouTube on a smart device or smart TV rather. So if you hook them and all these things are going well, that little extra outro so they can find their phone and start searching. That's brilliant. It's super important.

Ryan:

Yeah. So that's the last thing and there's a lot of other tiny little things that we like to include in there and a lot of this stuff I, personally, learned from going through some of the Harmon brothers courses and then the child, adult, parent stuff I learned from Travis Sago and other random marketers that I've had mentor me over the years. But a lot of people don't mention their brand enough in the video too.

Brett:

Yeah. Agreed. Agreed.

Ryan:

You know you should be..

Brett:

Show it, mention it, have a logo on the packaging. Yeah.

Ryan:

As much as physically possible, you want to say your brand name without it sounding awkward.

Brett:

Because people forget, right? And this is some of the .. I got my start in radio believe it or not. You had to do it. It's kind of perceived as a must in radio. You had to repeat the name five to seven times or whatever. You need to do it on YouTube too. As long as it sounds natural, because otherwise they're going to forget. They're going to forget the name. They'll be impressed by the ad. Something will resonate with them. They're going to forget your name. Yeah. I like that a lot.

Brett:

So maybe a couple things here. We got just about five minutes or so as we'd like to wrap up. But as your ... because you guys went from that first video you talked about, that literally had a stop sign and you're saying, "Stop," and it's a really affordable video to produce to now, you guys are cranking out some high quality, high production value commercials. How are you evaluating those before you run them? Obviously, we never know until we start running them and getting some data and some media dollars behind it. How are you guys evaluating it ahead of time though to understand, "Okay. This is ready to start running and start testing."

Ryan:

Yeah. So I mean, I work with my friend, Joe. I think you might have had him on your show. I can't remember. You did ..

Brett:

I have not yet but I've got to.

Ryan:

Yeah.

Brett:

I love what he does. He's fantastic. on the show.

Ryan:

He is. He's fantastic. He's amazing at what he does. But our process is we come up with the big ideas together. He fleshes them out. We review the fleshed out version of it. We have comedians come in, funny it up. Then they film. They edit. We got through it, make sure there's nothing that is super off brand or whatever, review for like typos and stuff like that and then we launch. But it's ... we don't really have a crazy game plan. I have a Facebook launch plan that I've kind of come up with myself where we usually have three different hooks, which obviously makes it more expensive to film.

Ryan:

But we usually have a good idea which hook's going to win before we even start. And yeah. The process really isn't super complicated. Usually, send the new creative to our list once it's done, which I don't think a lot of people do, and that usually generates close to a $100,000 from an email to content, which I mean ... I don't know.

Brett:

Crazy. That's crazy.

Ryan:

I think that's pretty good.

Brett:

Yes. I would call that a win. Yeah. keep doing that.

Ryan:

Mm-hmm (affirmative). And it seeds the content. So I mean it gives it better engagement on the platforms. There's a lot of really good things but I don't really have too crazy of a process. I know you did mention the other video too, the one that was lower budget. And I know a lot of people are concerned about or don't know how to create these longer videos or they think that it does need to be super funny in order to win. It doesn't. The template that I've outlined doesn't have to be in a funny format.

Brett:

It doesn't.

Ryan:

It can be in a super serious. If you got to YouTube/Tru Earth Movement and you go and you find, it's the only video that's got 11 or 12 million views. You'll find ... it's one of our older ones but it starts with like, "Stop," and I literally ... I took this framework that I'd just laid out. I wrote this script and then I ... and I'm not a videographer or anything like that but I went in, took a little bit of crappy b roll with my iPhone, and we edited it together and it did great on Facebook and it did great on YouTube.

Brett:

It did. It did do great on both. It sure did. And you can totally start there and that's what's beautiful about this framework is that it will work with something that's lower budget and that's a great place to start. And so just love that. Love watching you guys and how you've grown and evolved and how you're continuing to just crush it. And then, one thing I will underscore about what you just said is, if you're going to test different elements of your video, hook is the most important thing to test.

Brett:

I think it's well worth it. You said it's more expensive but it's not that much more expensive once you have the idea. This is the meat of the video, right? The problem, villain part, the solution, the multiple calls to action, the introing logic, all that. But so that can stay the same but then you have maybe three different openings, three different hooks to test and ... because you may find, "Hey. This is the hook that works best with cold traffic, the prospects, people that have never heard of my brand. But this other hook is actually better for warm traffic or for remarketing traffic." And so it's really important to test those different hooks.

Ryan:

And expensive doesn't necessarily mean better.

Brett:

That's true too.

Ryan:

Just to give you an example. Parker ... I think that's how you spell his last name. He's a buddy of mine and Joe's. And he's run a lot of the ads for Lumi and other big Harmon Brothers productions. And they spend 70 grand on one pattern interrupt and I don't know which company it was with but he said that the cheap version absolutely smashed it. So it's more about having variety than it is ...

Brett:

Exactly.

Ryan:

You know you don't need to blow up a car or something crazy.

Brett:

Yeah. Yeah. And what's an interesting thing too about ... just a little side note there on somebody blowing up a car. That's not really a pattern interrupt anymore, right? Now many movie trailers begin with a car being blown up? A lot.

Ryan:

Yeah.

Brett:

Yeah. Yeah. So exactly. Does now have to be high budget. Be creative. Test things. I would say start with these lower budget things first and then graduate your way up as you get more comfortable.

Brett:

Awesome, man. Really, really good stuff. One of the things we underscored before we hit record and who knows when you guys will be listening to this but, as we're recording it, the IOS 14 updates are coming out. So privacy's a big concern. Lots of discussions now about how will tracking be impacted and cookies are going away in 2022 and various things.

Brett:

And one of the things that I believe and I know you agree with it as well is that good creatives will win, right? Right now I think that there's some companies that are benefiting by being too dependent on the algorithm and they've got okay creative and fantastic targeting and the algorithm is saving the day. As some of those things shift, great creatives will win and so this is something that you need to invest in and focus on and work on. So really good stuff man.

Brett:

As we kind of wrap up, anything that you want to point people to? Obviously, they should go check out Tru Earth. So let them know how to do that but any other resources or you want people to connect with you or should they just go buy laundry detergent and help save the planet?

Ryan:

Yeah. You can ... I'm a real person. You can connect with me. I'm on Facebook. You could search for my name. I'm on LinkedIn too. I think I'm Ryan McKenzie on LinkedIn but definitely try Tru Earth if you haven't. You can check it out at www.tru.earth. Tru.Earth. It's funny. I think I've been on so many podcasts and stuff now. I think I probably have more marketer customers than anything else. No. It's great. Even if you don't like laundry ... I still enjoy ripping off a strip and hocking it in and not measuring, not having a mess, and more cupboard space.

Brett:

Absolutely. So it's got the imagine the Curry family stamp of approval, which I think carries some weight.

Ryan:

It's big.

Brett:

It's pretty big. And the other piece is check out Tru Earth, one, so Ryan can remarket to you. You do want to see his ads I promise you. You want to see the Facebook ads. You want to see the YouTube ads. So check those out. I'll link to some of that in the show notes as well but ... man, Ryan, this has been fun. Round two. I appreciate you coming on the show again and it's been super fun, man. And I know you've been super busy what with blowing up Canada and the US and the world and so keep up the good work, man.

Ryan:

Well, man, this is call to action number two. So now we need like an outro.

Brett:

So the outro is this. Appreciate it. So put this stuff to work. In addition to creative winning, I believe video ... this is not a bold statement, right? Video is where the video is today. It's where it's going tomorrow. So you need to master this and don't just master this for Facebook. Manage it or master it for YouTube and other channels as well. And so with that, hey, we'd love to hear from you. Let us know what you think of the show. We'd love that review on iTunes. It helps other people discover the show. And with that, until next time, thank you for listening. See you. That's a wrap.

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If you think the Amazon marketplace is wild right now, you should have seen it in 2003.  My guest today is Jason Boyce.  Jason is a former Top 200 Seller on Amazon - a spot he held for 10 years before selling his company.  Now he’s frequently interviewed and quoted in the media on all things Amazon.   He was recently interviewed for a PBS Frontline Documentary called Amazon Empire: The Rise and Reign of Jeff Bezos.  We discuss some hot takes on broader Amazon topics, plus dive into specific tips for sellers.  

Here’s a look at what we discuss:

• How big is Amazon really…and why it’s actually BIGGER than you think
• Amazon and antitrust and what it means for sellers
• How little improvements to CTR and conversion rate create a compounding effect
• Owning the digital shelf - what it means and what you should be focusing on
• Controlling your brand.  How to proactively control and protect your brand
• Lessons from Jason’s new book - The Amazon Jungle

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‍

Jason Boyce

Via LinkedIn

Via Twitter

Avenue7Media.com

“The Amazon Jungle” by Jason Boyce and Rick Cesari

Mentioned in this episode: 

eE 156 Rick Cesari

Amazon Seller Central

Joe Kaziukenas

Marketplace Pulse

James Thomson

Prosper Show

Amazon Empire

Jeff Wilke

The S-Team

Andy Jassy

Dave Clark

“Atomic Habits” by James Clear

Joe Hansen

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Episode Transcript:

Brett:

Well, hello, and welcome to another edition of the eCommerce Evolution podcast. I'm your host Brett Curry, and today I am absolutely excited to welcome a very well-known guest, a guest that's just all over the media. You see him in documentaries, and interviewed on the news, and all kinds of other places.

Brett:

My guest today is Jason Boyce.

Brett:

Jason is the founder and CEO of the Avenue7Media. You'll hear more about that in a minute. Also, he was a top 200 seller on Amazon for over a decade. He also is the author of a new book with his co-author Rick Cesari. The name of the book is The Amazon Jungle. It's a fantastic read.

Brett:

Also, Jason was interviewed on a recent Amazon documentary, which is a must watch. We'll talk about that in a minute as well. We're going to dig into several things related to Amazon to better equip you to dominate on Amazon, and better understand it. And so with that quick intro, Jason, thanks for taking the time, man, and welcome to the show.

Jason Boyce:

Hey, thank you, Brett. It's great to be here. I feel like we're of like mind here. You've got this great agency, and I'm trying to build one. And so, it's always great to talk to colleagues.

Brett:

It is. It is, and it's been fun. We've been able to catch up a couple of times, and of course, your co-author, Rick, is an awesome ... He was on the podcast, maybe a couple years ago, talking branding and stuff. But yeah, you can tell you built your Amazon business the right way, building your agency the right way. It's fun to talk shop, for sure.

Jason Boyce:

Absolutely.

Brett:

So I think just as a great background, because I think as anyone that's deep into the Amazon game knows, that you were a top 200 seller for over a decade. That's a big deal. That's a huge deal. Can you walk us through the 90 second version of what you sold on Amazon, what that looked like, and why you got out of it?

Jason Boyce:

Yeah, sure. I actually started as an eCommerce direct to consumer website called SuperDuperHoops.com back in 2002 and-

Brett:

Now, I didn't ask you. Are you a hooper? Because I love basketball. Did you like-

Jason Boyce:

I played in high school. My brothers and I, who I founded the business together with, we're huge Laker fans here in LA.

Brett:

Nice.

Jason Boyce:

It was just a good fit for us, and we played a lot of pickup games. It was just a really fun fit for us. We were doing direct to consumer eCommerce, and we had connected with this company called Overture, who invented pay-per-click advertising.

Brett:

They sure did.

Jason Boyce:

They had a little office-

Brett:

They sure did.

Jason Boyce:

... in Pasadena and-

Brett:

Well, yeah, little known fact now, but Overture started the PPC game.

Jason Boyce:

That's right. And then, they were bought by Yahoo, and Google had to license the technology after a court battle, and perfected it into AdWords. And so, we were all over the search engines at the time. A year later, Amazon picked up the phone and called us, and said, "Hey, we want you to sell your products on our website."

Jason Boyce:

And I was like, "What are you talking about? You guys sell books." Because I had no idea that they were moving into the sports and outdoors category, which is where we spent a lot of our time. Later on moved into toys, and then also into some household categories, but mostly in the sports and outdoors category. Made every mistake you can make, Brett.

Brett:

Did you?

Jason Boyce:

And learned from them over the course of 17 years. Had an exit, and took a lot of those learnings, and the playbook that we lay out in the book The Amazon Jungle, with my co-author, Rick Cesari. And now, we fancy ourselves a champion for brands with Amazon, because you need a warrior to battle Amazon these days. We help brands. It's very similar to what you do at your agency ... double, triple, quadruple, or take off on the Amazon platform.

Brett:

Yeah, I love it, and you're right. You do need a warrior in your corner. And really, I like how you and Rick work together, because I think really the next evolution of successful Amazon sellers are going to be those that build a brand, that build an identity. And not just a, "I'm private labeling a product and creating a great listing on Amazon, and going to try to get rich with it."

Brett:

But, "I'm creating a brand that consumers resonate with, and that has a following, and that has value in the eyes of the consumer, and also value in the eyes of Amazon." That's going to be useful. You know Amazon inside and out, so it's a great tag team there, with you guys, for sure.

Jason Boyce:

Rick has forgotten more than I know about branding. He's built billion dollar brands with a B. I built eight figure brands on Amazon, but his tactics ... and we share a lot of them in the book. They tap into human nature and-

Brett:

Yeah, -

Jason Boyce:

... this science and psychology of selling, if you will. It doesn't matter if it's DirecTV ads, which is were Rick really cut his teeth and became famous. But whether you're selling online, direct to consumer, or on Amazon, a lot of those strategies still work because the human mind really hasn't changed much in the last, I don't know, millennium.

Brett:

Exactly, and likely won't. Some of the tools, and mechanisms, and channels, and platforms change a little bit. But at the core, human nature is the same, and a lot of the core branding principles are the same. It's just the way you execute that really has evolved. And so, let's just do this ... quick takeaways from the book. Who is the book for? And just a couple of highlights we may touch on as we go too, but I would love to hear that quick take.

Jason Boyce:

Sure, thanks. Really, the book boils down to ... There's two elements of the book, talking about what is this Amazon thing? How big is it? And then basically, we say ... The premise of the book is Amazon is not your friend. You have to be on Amazon, because that's where now, I think, 60 percent of the online market share is after COVID-

Jason Boyce:

And if you're going to be there, learn from my mistakes over nearly 20 years of iterating on the Amazon platform, and follow our strategy. And the strategy is, like you pointed out, Brett, the long game on Amazon is you have to have your own brand. You have to have great products. You have to be listening to the customer, and iterating on what they're saying, what they don't like about your product, and making it better.

Jason Boyce:

And then, we walk you through everything from coming up with a product idea, a branding strategy, and then all the technical basis for launching on Amazon. So if you're brand new, if you're an entrepreneur, solopreneur, and you want to start a product company, the book is great. If you are selling in brick and mortar retail, or through DRTV, and you want to learn more about a successful strategy on how to sell on Amazon, the book is great for that as well.

Jason Boyce:

I've got to tell you. One of the most surprising things for me, Brett, when I started with the agency and wrote the book was I didn't think that Amazon sellers who were doing seven figures could benefit from me because I figured they knew everything. I am amazed at how many of these sellers we've taken on, and doubled or tripled their revenue. Because to be honest, they're so busy.

Jason Boyce:

They have so many other parts to focus on with their business. So to have an agency like yours, or like mine, to come in there and really double down on best practices ... Existing Amazon sellers can really launch their business as well, with the help of an agency. It's been really quite a learning for me over the last two years, and been enjoying the heck out of it.

Brett:

Yeah, it's awesome. Maybe we can get into some of those mistakes that you see when you're working with other successful sellers. You were making mistakes back when they were brand new. You had to make mistakes because you were one of the first, but now people could and should learn from that. Actually, while we're on the subject, could you pick two or three? What are some of the biggest mistakes you see sellers making on the Amazon platform that can be fixed pretty quickly?

Jason Boyce:

Well, the first thing whether you're a small brand or a big brand, stay away from 1P. Stay away from the vendor central world if you can. There are some, definitely, reasonable use cases where it makes sense to be in 1P.

Jason Boyce:

For example, one might be if you're selling to Walmart, and you have no control over your retail price, and you don't care. Give that product through the vendor central platform. We clean up a lot of folks who are on 1P, but really shouldn't be, and move them over to 3P. It's a tricky dance to do that-

Brett:

.. that's right because Amazon can get pretty angry about that. They can -

Jason Boyce:

They can call you back.

Brett:

... domestic stuff.

Jason Boyce:

They can absolutely call you back, so you have to be really careful about how you do it. Just picking the right way to sell on Amazon is step one. And then second, not having a decent seller policy for your brand to make sure that you're the only one in your own buy box.

Jason Boyce:

That's really, really important because if you are selling wholesale to other sales channels or distributors, and then those guys have the ability to attach to your hard work and listing, not only are you going to lose sales and profits, but you don't get 100 percent access to the data needed to improve your listing. And so, channel controls ... Being on seller central, channel control is really important, and laying down a solid foundation so you can prevent folks from attaching to your listings. And then, I would say the third thing is these listings are ... You can't set it and forget it.

Brett:

Yeah, totally.

Jason Boyce:

I just talked to a potential client earlier this week. And they were like, "Yeah, we launched these things up. We're doing seven figures. We haven't done anything with it in three years." I'm like, "Oh, my God, we're going to triple your revenue. Let's get going." Because you have to constantly optimize.

Jason Boyce:

Optimize for SEO. You have to constantly optimize for merchandising, so that all these great feedback ... All the negative feedback that you're getting, or comments through the review system and the seller rating system can be put forward and upfront on your listing. So if you're doing that continually, then you'll have much more success, rather than just setting it and forgetting it.

Brett:

Yeah, it's such good advice, because I think some people can get lulled to sleep a little bit by success, or by what seems to be success. Like, "Hey, it's a seven figure channel. We're doing good. We're selling. We don't need to do anything else." When really, they don't understand that there's so much more that could be gained there.

Brett:

And if you build it, nurture it, optimize it, you're succeeding because Amazon is so huge. It is likely 60 percent of all eCommerce, by some estimates. But likely, you're not getting the share that you could be getting if you're doing all the things that you talk about.

Jason Boyce:

Yeah, and we also developed some proprietary software. We call it our Early Warning Detection System. Sometimes sellers just don't know when their listings have been taken down, and it's gotten worse in the last 24 to 36 months, really bad. And funny thing about eCommerce ... If you're not in stock, and your listing isn't live, you really can't sell anything.

Jason Boyce:

Sometimes we just take over that piece, and we're automatically increasing sales by 30, 40 percent. Because we're just giving better visibility to the client about, "Hey, you're out of stock. Do you know this?" "No, we didn't know we were out of stock over there." Or, "Your listing is down because of an NCX reason." Insert whatever reason you're down for.

Brett:

Yeah, when that product is not on the digital shelf, you won't make sales, obviously.

Jason Boyce:

That's right.

Brett:

So find out all the reasons why it could be removed, or blocked, or taken down off that digital shelf, and just get it there more frequently.

Jason Boyce:

Yep, absolutely.

Brett:

Yeah, amazing. So you talked about it in the first part of the book, and then something we talked about offline too, is how big is Amazon, really? I think this is interesting to understand. It's important to understand as sellers, or if we're just competing with Amazon. It's important to know.

Brett:

I think there's some myths about Amazon. There's still people that believe Amazon's not profitable. Amazon's only growing because they don't have to turn a profit, which is actually wildly inaccurate. Amazon is turning immense amounts of profit. And also, Amazon is much larger than they appear because of, really, some accounting rules. Do you want to walk us through? How big is Amazon really?

Jason Boyce:

Yeah, absolutely, so Amazon is a public company. Every quarter they have to make reports to the Securities and Exchange Commission about their revenue. The revenue that Amazon reports to the SEC does not include the total dollar value of goods sold through Amazon.com.

Jason Boyce:

For example, you or I, Brett, through our Seller Central account ... We make a $100 sale on Amazon. We're likely, depending on the category ... We're going to give $15 of that $100 to Amazon. And we're going to take the $100 of the sale. Amazon is not reporting the $100 sale that happened on their website. They're only reporting the $15 and-

Brett:

Right, that's the third party marketplace rules for ... The GAAP rules, the Generally Accepted Accounting Principles. You can only report your take on that, which Amazon's 10, 15 percent, somewhere in there.

Jason Boyce:

EBay has been reporting GMV forever in their public documents, and others have as well. My personal opinion-

Brett:

GMV is Gross Merchandise Value. Is that -

Jason Boyce:

Gross Merchandise Value, so that's the $100 of that value sold. Amazon may say, "Well, that's not our sale." Well, when you're taking 45 cents of every dollar of that sale, then I think it should be recorded as a part of the sale.

Jason Boyce:

And I think regulators and investors would find that information incredibly helpful in their investment decisions, and the same with the regulatory side. Anyway, I think they should announce that. I've had the good fortune of meeting a lot of really smart analysts who can extrapolate what that GMV number is. The GMV for 2020 by the most recent estimate from my friend, Joe Kaziukenas at Marketplace Pulse, is that Amazon pumped 490 billion dollars of goods sold through their website last year and-

Brett:

Which is just insane ... And so, the breakdown in this ... You get the 1P, which Amazon does account for that fully. But then you've got the 3P, the third party marketplace where they're just counting their take rate, 10 to 15 percent, in that range. And now they're ... More than 50 percent is 3P now, correct? Do you know the breakdown there?

Jason Boyce:

Yeah, so if you breakdown that number according to Marketplace Joe, 300 billion of that 490 is third party sellers. Amazon retail was 190 in GMV. And so, three to two ratio, third party sales versus one party sales.

Jason Boyce:

Now look, there's some folks out there that say that Amazon's going to get rid of retail. They're not. You can't just give away 190 billion on your top line. They're not going to do that, but their third party marketplace, in my opinion, is the most important part of what makes Amazon tick.

Jason Boyce:

There's a lot of public stories that say, "Oh, AWS is the profitability. That's where the profits come from." You take that 300 billion and you pull out 15 percent of that. That's 45 billion dollars. And then later on another ... Let's say another 10 points for ad spend, right?

Brett:

Mm-hmm (affirmative).

Jason Boyce:

Ad revenue has become a huge part of the third party seller. That's another 30 billion. That's 75 billion dollars ... I don't want to say pure profit, but very high margin-

Jason Boyce:

... profit dollars. AWS last year hit about 50 billion. Why is Amazon not telling that story? I don't think they want anybody to know that the third party marketplace is a cash cow. Number one, because it keeps competitors at bay, but I also don't think-

Brett:

It keeps regulators at bay, maybe, or it did.

Jason Boyce:

That's the second part. That's the second part. Well, until we started talking about it, until analysts started pushing this information out there. I think regulators are starting to get a good idea that they're massive. I've made this prediction, and so has Joe, that I think Amazon, in terms of GMV, will surpass Walmart's numbers, which is in the $520 billion range, but at a much slower growth rate overall ... that they will surpass Walmart as the largest US-based retailer in the world this year, 2021.

Brett:

Wow, but if you look at their percentage growth, and you look at that 490 billion GMV value, it's almost inevitable. It's going to be this year at some point-

Jason Boyce:

Absolutely.

Brett:

... which is just mind-boggling. Because there's still some people that believe, "Oh, well, Walmart is still way bigger than Amazon." Well, only if you're looking at the financial reports that have to be reported to the SEC, not if you look at GMV. And so-

Jason Boyce:

Yeah, look, Walmart's last stand is the grocery business. And they're innovating, and they're doing some really cool things there, but Amazon's coming. Amazon is a runaway train about to pass them on the tracks. It's just going to happen.

Brett:

And so, we alluded to the keeping regulators at bay, and the antitrust business that's coming up. I think Google was the first one to officially end up in antitrust court, but it's going to happen for Amazon. Do you have any thoughts or predictions around that? What should we be watching for related to antitrust and Amazon?

Jason Boyce:

Oh, wow, there was just a couple of announcements. The Biden administration ... Their names escape me right now. But they've brought in some really heavy hitters to be part of the FTC, and part of the Biden administration's team to take a look at big tech. Not just Amazon, and Amazon's clearly in their sights.

Jason Boyce:

But there's no question in my mind, and in my opinion, that Amazon has not one monopoly, but two. In the AWS space they have, according to Gartner, 50 percent market share. And we know from our analysts on the market place side, they own 62 percent, 60 percent of the online retail market share.

Jason Boyce:

They are so massive that they ... I mean, what company in history has ever had two monopolies at once? And Amazon does. I fully expect the Biden administration, the FTC to come hard, and the antitrust committees, the judiciary committees in both the House and the Senate to come after Amazon and the other big tech companies in a big way.

Jason Boyce:

Now, will they be successful? We'll see. I think with Ms. Khan, who was just announced as trying to be the head of the FTC ... has some very interesting ideas. But the antitrust laws themselves need to be updated before they take action. If that happens ... If they lay the foundation for new rules and laws in antitrust for the 21st Century, then absolutely these companies will be broken up.

Brett:

Yeah, and that would be the end result, right?

Jason Boyce:

Yeah.

Brett:

You'd see these companies broken up, where AWS is split out into its own business entity, and break ups like that with Google, and with other tech companies as well.

Jason Boyce:

Yeah, and the funny thing about Amazon ... If I'm Jeff Bezos, I don't care. Because if that happens, and AWS gets broken up, you're going to see a three times valuation increase. AWS is actually being constrained in its valuation because it's under the Amazon umbrella.

Jason Boyce:

I feel the same way about the Marketplace, and the advertising angle, even the fulfillment network. I think Amazon may be internally ... Again, this is just my opinion. I don't have hard evidence. I think they're preparing for the inevitable. Maybe not this year, maybe not next year, but five, 10 years down the road where these business units are already, technically, standing up on their own. But there's real potential for them to be broken up.

Brett:

Yeah, that totally makes sense. One thing that you and I were talking about a couple weeks ago that I think would be interesting to mention here is Jeff Bezos stepping down as CEO. People are like, "Oh, retirement ... going to buy a yacht and sail the world." He's the Chairman of the board. He's going to be very involved, so what do you think this move is really about?

Jason Boyce:

Yeah. No, I think this move is about Jeff Bezos wanting to play in some other spaces, but he hasn't left Amazon. Whatever Amazon looks like 10 years from now will be because of what Jeff Bezos is doing today, and as he steps into this less visible role as Chairman of the board. He likes to look at the future.He's going to push poor Andy Jassy into the hot seat in front of those House Judiciary Committees, so he can answer all those antitrust questions so he doesn't have to. And he's going to work on the fun stuff, and frankly, he's brilliant at it. I'm sure-

Brett:

Yeah, why wouldn't you? You'd rather ... If you were an Amazon shareholder, you want Bezos working on the next 10 years of Amazon, not answering questions before Congress.

Jason Boyce:

Absolutely, and his crystal ball is as good as anybody.

Brett:

Poor Andy Jassy.

Jason Boyce:

Yeah, poor Andy Jassy. Bezos' crystal ball is as good as anyone, and he's not going anywhere.

Brett:

Right, yeah, totally agree. I got to watch a documentary recently that you and our mutual friend, James Thompson from Buy Box Expert and also PROSPER Show ... a documentary that both of you guys recommended, and for whatever reason, I missed. You recommended it, and I watched it. And then, I'm like, "Oh, well, Jason's in this documentary," which was pretty awesome, and so was James. But talk about ... It's a Frontline documentary. Talk about ... The name is escaping me ... The Amazon Empire, I believe.

Jason Boyce:

Yep.

Brett:

Talk about the documentary. What's it about, and why were you in it?

Jason Boyce:

Oh, good question. I'm an old guy, so I've been in this game for a very long time. I was one of the few sellers who has always been willing to speak out against practices that Amazon takes that are bad news for sellers.

Jason Boyce:

I think they appreciated that, and again, I've just been around a long time. That's it. 2003, I was an Amazon seller. There aren't a lot of people who say that. And so, it was a really fascinating documentary. I thought they did a brilliant job, as always-

Brett:

Well done piece.

Jason Boyce:

... Frontline does.

Brett:

Yeah.

Jason Boyce:

To me, when I think of the documentary, the most interesting piece to me ... I don't know if this had anything to do with Jeff Wilke stepping down, who until just days ago was head of Global in the dotcom business. -

Brett:

Wilke was the heir apparent. Everyone believed Wilke was going to take over for Jeff Bezos when Jeff Bezos one day stepped down.

Jason Boyce:

I secretly wish he had, because he's got the consumer experience, and I'm from the consumer world. That's not to say that Andy Jassy doesn't have enough experience to do well, but I really was hoping that Jeff Wilke would take over that role. But announced late last year that he was stepping down, but there was this gotcha moment in The Amazon Empire where ... I tipped off the interviewers about this product safety issue that the Marketplace has. Section 230 of the Consumer Decency Act protects platforms like Facebook, like Amazon from liability from folks selling on their platform, or saying things on their platform and-

Brett:

Yeah, because they can say, "It's not my product. It's just my platform."

Jason Boyce:

That's right. Yeah, that's right. And so, Amazon didn't really have a massive incentive, especially as it rolls out the red carpet to China mainland factories to dump goods on its platforms at cheap prices, to require product safety. The interviewers, who were just brilliant, were given 30 minutes ... Not 30 minutes and one second, 30 minutes with each of the S-Team members that they interviewed for the documentary. And I had to-

Brett:

Just real quickly, because I've heard this term before. Inside the higher ups at Amazon are called the S-Team ... What is the S-Team?

Jason Boyce:

Gosh, it's ... I don't know what the S-Team stands for, to be honest with you. I've just -

Brett:

That's like the execs of the execs, right?

Jason Boyce:

That's right, the leaders-

Brett:

- top echelon of Amazon.

Jason Boyce:

... of the individual business units that make up Amazon.

Brett:

Right, okay.

Jason Boyce:

So Andy Jassy was head of AWS. He took it from zero to monopoly status, and he was in charge of that business unit. Jeff Wilke was in charge of Global. Gabe Clark was part of ... Now, he's a member. He's taken over for Jeff Wilke.

Jason Boyce:

He was on this team, and Head of Fulfillment and Delivery, and Warehousing, and Supply Chain. And so, these are the decision makers. These are the folks that set the strategy at Amazon.

Jason Boyce:

They're not doing the day to day operations, but they're developing, hiring the team, putting the message, and making Amazon work. That's this S-Team. The interviewers from Amazon Empire had 30 minutes that they literally shut down the cameras at 30 minutes and one second. And they had-

Brett:

I just got word it stands for Senior Team. I just -

Jason Boyce:

Oh, Senior Team. Well, I just learned something.

Brett:

... used a little tool called the Google and found it.

Jason Boyce:

Well, thank you for that, Brett. Now I know. Senior Team, okay, that makes perfect sense. I thought it would have been something goofier, but yeah, Senior Team makes perfect sense.

Jason Boyce:

And so, I was interviewed by The Amazon Empire folks two days after they had this round of interviews, and they did such a really good job. The one gotcha moment that sticks out ... And look, it's a fairly balanced view. Amazon is a victim of their own success.

Brett:

Right.

Jason Boyce:

They have done this better than anyone.

Brett:

They've done so ... They're so brilliant, and so amazing in so many ways. But yeah, they've also made mistakes, too.

Jason Boyce:

Yeah, but it's an American success story. Jeff Bezos is living the American dream, so it's really hard to knock them for what they have done in terms of the innovation scale. They're a remarkable company.

Jason Boyce:

But they also took a fair and balanced look, I felt, of the dark side. One of those is product safety. I just remember this painful moment in the interview with Jeff Wilke where Jeff Wilke basically admits that, "We're not requiring safety product sheets, safety testing for toys on the platform." And the interviewer says-

Brett:

That's scary.

Jason Boyce:

"How can you be customer obsessed if you're not making sure that the products you're selling on your Marketplace don't injure your customers?" And it was just a ... It was one of those moments. That's the one thing whenever I think of The Amazon Empire ... It wasn't the six hours that interviewed with them.

Jason Boyce:

It's that moment, but it's a great overview of the growing power of Amazon, how their success has been. And there's a lot of discussion about some folks that would hope for more from Amazon, the seller community, warehouse workers, delivery drivers, et cetera. It's definitely worth watching.

Brett:

It's worth watching. It's a great background. It does highlight some of the success, and Amazon is a great American success story. But it does highlight the dark side as well, so I think it's a must watch.

Brett:

Check it out, and you get to see Jason Boyce, again, interviewed on the doc. It's a great one. Fantastic, so let's talk more about sellers, and how they succeed now, and what things are going to look like here over the next few years. What are other recommendations you're making?

Brett:

You can highlight something from the book, or just something from the agency. What do sellers need to be focusing on in 2021 and into the next few years to really succeed? You may underscore something you've already mentioned, but I want to pose that question.

Jason Boyce:

We talked a little bit about some of the basics. I'm amazed at how many basics escape successful sellers. I mean, click through rate is a really important metric on Amazon.

Jason Boyce:

What are the two things that help you drive click through rate? Great main image ... Does your main image and does your product color stand out on the search results page? If the answer is yes, your click through rate is going to be terrific.

Jason Boyce:

If it's not, your click through rate is not going to be good, and you're going to lose traffic, and sales, and clicks. And then, the product title ... Not only is the product title important for SEO reasons ... I think you should have at least three of the highest volume, most relevant keywords in your product title. I'm amazed at how many don't.

Jason Boyce:

And you should duplicate that keyword in another area, bullet points, or description, or back in keywords, or subject matter. Just those right there are really, really important for success, but it doesn't replace making a great product. I hear these stories all the time. "This Amazon shopper left this review. They're so terrible. They're evil." They take a defensive stance instead of saying, "Thank you."

Brett:

It's the shopper that's dumb. The consumer doesn't know what they're talking about. It's not our product.

Jason Boyce:

They don't know what they're talking about. They didn't read the instruction manual. Well, you always should have to read the instruction manual, right?

Brett:

Yeah.

Jason Boyce:

So there's lots of that kind of ... I think it's a mistake if you're a product company to not say, "Thank you," every time you get a negative review, and to identify themes from other shoppers or customers of yourself. And build, and talk ... put that in front of your product manager. Say, "Hey, next time we bring this product in, we need to fix this problem because now we've got six shoppers who took time out of their day to tell us what they would prefer didn't happen with our product."

Jason Boyce:

That is really critical. That's something that Rick and I compared notes on. Part of Rick's massive success in the DRTV world with brands like the George Foreman Grill, OxiClean, and all these others, is he would pull together ... For the purposes of recording a testimonial to use in an infomercial, he would pull together real shoppers who paid real money for the product. And he would put them in a studio and ask them a series of questions, and by the time-

Brett:

- fantastic way to learn. Not only do you get these great videos, which we need for YouTube ads and other things, but man, you learn so much. Yeah, sorry, go ahead.

Jason Boyce:

Exactly. He said, "By the time I got to the sixth or seventh interview, I knew what was wrong with the product, and I knew what they loved about the product. And I ran with that, and I took the information that was wrong with the product back to the brand to say maybe before you spend $50 million on a TV ad campaign, you might want to fix this before it goes out there." And when he told me that, the lights went off in my head.

Jason Boyce:

I'm like, "My God, we've been doing that with reviews forever." Yeah, look, nobody wants to have someone tell them that their baby is ugly, but you've got to take that information because you can do something about it. We entered into that same process by reading. I personally read, for my brand at the time, Harvel ... It's been since rebranded under the new owner. But for my brand, Harvel, I read every single negative review over eight years. And-

Brett:

You have to -

Jason Boyce:

... whenever I got a theme, we fixed it. And then, you know what? At one point, we started getting four to five stars only. We didn't get any one stars anymore, because we were iterating on the product. Nothing replaces that.

Jason Boyce:

Once you get to that phase, the next phase is what can you do on the listing itself? Amazon has, I think, a limit, 1000 pixels is their minimum. We do 2500 pixels. We go way overboard.

Jason Boyce:

We want the equivalent of our imagery, and our branding for additional images, to appear like you're walking into ... A, you're seeing a beautiful premium brand in a high gloss magazine ad. Or, you're walking into a premium store with amazing lighting, with great product placements and settings. As opposed to what I see every day on an Amazon listing, which is the equivalent of walking into a brick and mortar store with light bulbs out on the neon sign.

Jason Boyce:

You walk in. The flickering fluorescent lights, some of which are out ... And you're walking the shelves, and half are empty. You don't get that warm fuzzy feeling, right?

Brett:

Right.

Jason Boyce:

So we try to-

Brett:

I was shopping ... Just for a quick anecdote, I was shopping for a product the other day. It was actually a pretty well-known brand. I clicked on their Amazon listing, and this was likely an anomaly for just this one product. But I get to the product detail page, and there was one picture.

Brett:

I can only see one angle of the product. I'm like, "What is this?" You want to be able to simulate what it would be like in a showroom. I want to pick this up, and look at it from all angles, and examine it, but it was one picture. I think there's a lot of successful brands that are still doing that with their Amazon listings, so that's to your point.

Jason Boyce:

That transition from a wholesale brand, sometimes a nationally known wholesale brand, to direct to consumer thought process is really difficult.

Brett:

It is.

Jason Boyce:

We've got a couple of really good clients that we're helping make that transition. In the old days, they would make a great product. They would give it to a retailer, and the retailer would do that.

Brett:

Right.

Jason Boyce:

But Amazon doesn't do that for you. Amazon is a DIY platform. You've got to do this stuff yourself, and you've got to know how to do it. And another lesson that I learned from Rick was features tell, and if it's-

Brett:

Yeah.

Jason Boyce:

At the end of the day ... We were talking about these images. At the end of the day, those additional images should be pushing the benefit of the product.

Brett:

Exactly.

Jason Boyce:

I use this example in the book, but when I first met Rick, we were selling ping-pong tables, and it looked like a factory spec sheet. It had one image. I did have a video, but it was an assembly video, to which Rick said, "Boy, that looks like work."

Brett:

You successfully convinced me not to buy this product. Thank you.

Jason Boyce:

That's right. I really don't want it. And so, I took some of ... I sat at Rick's feet, and learned how to do this. And we went from showing the dimensions and weight of the playing field and all this specifications to, "Bring friends and family together," as a marketing message. It's like, "That's what this table is for, for you to have special time with your family and your friends, and for you to build memories. That's what this product is for." Very few people care about the thickness of the legs, right?

Brett:

Mm-hmm (affirmative).

Jason Boyce:

I see that everyday on Amazon, still. People are just throwing it up there. They're not sprinkling that pixie dust, the brand .. Making that connection for the end user, "This is what you get when you get my product."

Jason Boyce:

I think those are the biggest opportunities. Still, when we take a brand who's had some success on Amazon and we do these things for them, they double their revenue. They triple their revenue.

Brett:

Yeah.

Jason Boyce:

It's remarkable.

Brett:

That's not hyperbole, that's actual results.

Jason Boyce:

No, those are real numbers.

Brett:

You're doubling, tripling sales.

Jason Boyce:

Right.

Brett:

Yeah, and it makes sense. I think there's always been this impact. And I've mentioned this book a few times on the podcast, I think. But it's called Atomic Habits by James Clear. And he talks about the power, just in your personal life, of making one percent improvements every day.

Brett:

I'm going to get one percent better in a bunch of areas. Over the course of the year, if you do that, you're 37 times better because you're making just these little incremental improvements. The same thing can be said about your Amazon listing, or any area of your business.

Brett:

Hey, we're going to make little improvements to the product, and just like your product, where we're eventually going to get to where we only get four and five star reviews because we've listened to our customers. We've made improvements, and we're going to make little improvements on our listing over time. We're going to improve all these little areas. When you combine that together, it has a compounding effect, and it's pretty massive.

Jason Boyce:

I couldn't agree more. I love that book, and I love hearing the stories about how these professional athletes ... Half a percent improvement makes a difference, a one percent improvement. And that's exactly the process in product improvement.

Brett:

Yeah.

Jason Boyce:

That's exactly the process in listing improvement. And you've got all the-

Brett:

How can I improve my -

Jason Boyce:

... metrics you need to know.

Brett:

... by one percent? How can I improve my conversion rate by even one percent? Those things really add up. Yeah, sorry.

Jason Boyce:

No, absolutely, I couldn't agree with you more.

Brett:

Fantastic. Cool, well, let's talk a little bit about the agency then, Avenue7Media. And if I'm not mistaken, Avenue Seven is where the Amazon HQ is, right? In Seattle.

Jason Boyce:

7th Ave, that's day one, buddy.

Brett:

That's where the bio-dome thing is and stuff.

Jason Boyce:

You mean Jeff Bezos' glass balls. That's what I refer to them as, yes.

Brett:

That's exactly what ... Funny story, so a couple years ago my Amazon director, Chris Tyler ... He and I got to fly out to Amazon and spend time with the DSP team. We were one of the fastest growing agencies, and so we got invited out. Yeah, we heard that that's what it's called, Jeff Bezos' glass balls. It was hilarious. But yeah, what a cool area, and some fantastic food down there. It's a cool spot.

Jason Boyce:

Yeah, that whole area ... At last count, they had 45 high rise buildings in Seattle.

Brett:

Wow.

Jason Boyce:

I didn't say four to five. I said 45.

Brett:

45, yeah.

Jason Boyce:

That's insane. Now, they're taking over Bellevue, which is a sister city next to Seattle. It's just amazing. Now, they're going to do the same thing in Virginia. They're amazing.

Brett:

They're a monster, for sure.

Jason Boyce:

An amazing company ... yeah, a monster.

Brett:

Talk about the agency. Why did you form the agency? What do you guys do, specifically? Why should someone reach out to you? Let's chat about those things.

Jason Boyce:

Well, thank you for that opportunity. Avenue7Media ... I learned this a long time ago at the first PROSPER Show. You know the PROSPER Show for Amazon sellers-

Brett:

Absolutely, yeah. -

Jason Boyce:

... founded by our friend, James Thomson, and Joe Hanson. Light bulbs went off for me. I was on a couple panels. I didn't actually give a talk, but I was on a couple panels.

Jason Boyce:

And after the presentation, as if often the case at these trade shows, there's a line of 30 people asking questions like, "Hey, Jason, this is happening to me. What should I do?" And I was like, "Oh, yeah, three years ago that happened to me. Try this." And they were like, "Thank you."

Jason Boyce:

And then, the next person would come and say, "I'm having this problem." I'm like, "Oh, yeah, this happened to us six months ago. Try that." And they're like, "Oh, thank you."

Jason Boyce:

I got such massive feedback, even after I left the show, from people emailing me and saying, "Thank you so much for that tip. You've changed our life." Something occurred to me while I was in the midst of building my own big branding company. I really enjoyed that more.

Jason Boyce:

I enjoyed helping others battle Amazon, and succeed on Amazon, than I loved building my own brands. And so, I always knew when I left my previous company that I was going to start an agency. And that's whatI've done. I was a seller. I made every mistake you can imagine.

Brett:

Yeah.

Jason Boyce:

And I learned from it the hard way, losing and making my own money. And so, we just put all that together. A lot of those strategies are in the book, but we put all that together, and adopted those repeatable processes that we used over 17 years.

Jason Boyce:

And we've built this agency where we apply those lessons learned. We help with strategy, but we also are basically your fully outsourced Amazon department. I mean, you know this, Brett. In the old days, you could have an Amazon person. You could hire one person. I don't know, at a college, or high school, or whatever. Go figure out Amazon, and have success.

Brett:

Yeah, because nobody knew at that point.

Jason Boyce:

Nobody knew at that point, and those days are over.

Brett:

For sure.

Jason Boyce:

I've got seven different departments with experienced Amazon operators, team leads in each of those verticals, that are necessary for success on Amazon. You didn't have to do that 10 years ago, but you can't succeed without it. You have to have as many people to manage your Amazon business now as you do to have success on your eCommerce site.

Brett:

Yeah.

Jason Boyce:

And I think the number's growing. I think, ultimately, it will be more.

Brett:

It's not getting simpler. It's getting more complex.

Jason Boyce:

It's getting more complex by the month, and that's what we do. We simplify things and we say, "Look, you make great products brand. You give us your brand book. If you don't have one, we'll make one for you. Let us make you a brand on Amazon, and we'll help you grow." It's just been incredibly meaningful.

Jason Boyce:

Just one side story ... We took on a client a year ago. They had had six, seven different consultants, or Amazon guys over the years. I'd never seen an account or listings that were so screwed up. It took us nine months to clean them all up. And now, they're on a hockey stick growth trajectory.

Brett:

Man.

Jason Boyce:

There isn't any agency out there ... Maybe yours could. There isn't another agency out there that could have done this without blowing it all up and starting over.

Brett:

Yeah.

Jason Boyce:

We didn't want to lose the history, and we didn't want to lose the reviews. We figured out how to do it. So that's just incredibly meaningful, and that's what I love about the picks and shovel business, instead of the gold digging business.

Jason Boyce:

I really like where I'm at, and we get better every day, which is hard to say after you've been doing this for 20 years. But we do, and it's just really meaningful. I enjoy the heck out of it.

Brett:

Yeah, I love it, and I think there's a special ... It takes a special personality from a leader standpoint, and then you have to hire the right people to run a successful agency. But for some people ... I'm with you. I really enjoy helping great brands.

Brett:

I really enjoy the ... You also have to be a servant mindset to a certain degree, to help in these areas. And yeah, to your point, our agency's great at the ad side, and some of the strategy pieces. We're not a fully outsourced Amazon department to the point like yours is. But yeah, I have the same mindset. It's just fun to help great brands, and to see those turnaround stories for sure.

Jason Boyce:

Yeah, and look, for brands that have that Amazon team who are great, they don't need a fully outsourced department. So they come to you, and you rock the traffic for them, right? And the conversions ...

Brett:

Exactly, 100 percent. So let's talk about if someone's listening and they think, "Man, that's what I need, or I at least need to talk to Jason." How can they best reach out to Avenue7Media?

Jason Boyce:

Look, I'm going to give you my email address. It's-

Brett:

Oh, beautiful.

Jason Boyce:

Yeah, Jason@Avenue7Media.com. If you want, you can go to the website, Avenue7Media.com, and you can put inquiries through there as well. I'm on LinkedIn. Jason R Boyce on LinkedIn, and @JasBoyce, B-O-Y-C-E, on Twitter. I like to try to keep Amazon honest on Twitter and LinkedIn so-

Jason Boyce:

I'd love to have you follow and see what I'm thinking about Amazon. And yeah, if you're a brand and you're struggling, or even if you're having success, let's have a talk and we'll see if we can help you hit that next level.

Brett:

Awesome, love that. Jason, this has been tremendously fun. We'll have to do this again as more Amazon news and things come out, which is all the time. But we'll have to circle back up, because I know you've always got a really great inside perspective, and you know people on Amazon, which helps. We'll definitely have to do this again. Appreciate the time, man. This was awesome.

Jason Boyce:

Same here, Brett, thanks for having me. Great podcast ... I'm a listener. Keep up the good work.

Brett:

Awesome, we'll do. Hey, check out the book, The Amazon Jungle. Check out the documentary, The Amazon Empire. And with that, hey, we'd love to hear feedback from you. What would you like to hear more of on the podcast? What would you like to hear less of? And as always, until next time, thank you for listening.

The death of email has been boldly proclaimed and then retracted so many times I’ve lost count over the last 10 years.  Finally, I think most people agree that email marketing is here to stay, at least for the foreseeable future.  

This episode is a double-header in terms of topic but still delivered in the same amount of time as usual.  It’s a “two topics for the price of one” special! Itay Paz is an online marketing veteran of 25 years.  He’s also the publisher of the Morning Dough newsletter and an SEO expert.  

Morning Dough is one of my favorite newsletters.  It’s one of the few that I open regularly.  In this episode, we talk about how and why eCommerce brands should be using email marketing beyond just transactional emails.

We also talk Web Core Vitals and how Google is going to use certain core performance metrics to score your site.  How your site scores in Google’s eyes will have a direct impact on both your SEO and your paid ad performance.

• How to land on a newsletter strategy that fits your personality and your brand
• Tips for getting your emails opened and read
• How often you should send emails and how to avoid spam and promotional folders
• What are Web Core Vitals and why you should care
• How to test your site in 60 seconds to see how it performs what Google’s Web Core Vital

‍

Itay Paz

Via LinkedIn

Via Facebook

‍

Morning Dough


Mentioned in this episode: 

Huckberry

J. Peterman

Everyday California

Chris Lynch

eE Episode 136 Chris Lynch

BOOM! by Cindy Joseph

Morning Brew

The Hustle

1440 Newsletter (1440 Daily Digest)

GlockApps

Sunday Scaries

Episode Transcript:

Brett:

Well, hello and welcome to another edition of the eCommerce Evolution podcast. I'm your host, Brett Curry, CEO of OMG Commerce. And today we kind of have a two part special for you. Two major topics that I believe have a big impact today, but will also have an impact into the future as we look at a privacy first internet, and SEO is always going to be important to a certain degree.

Brett:

My guest today is Itay Paz and Itay is the founder and CEO of Morning Dough, which is one of my favorite newsletters. It's a daily online marketing newsletter. He's also an entrepreneur and a veteran digital marketing, he's an affiliate marketing SEO email marketing, content marketing, conversion, optimization, monetization. He knows his stuff. And so, today we're going to be diving into two topics. One, how to build a good email newsletter. And I believe this was super important, whether you're an e-commerce merchant or service provider, or regardless of what you do online, especially as privacy kind of takes over. Having a good email list and having a good email plan I believe it's critical. And then we're going to talk about a really important topic. It's a slightly nerdy topic, but it's really important, and that's a core web vitals and how that's going to impact your organic traffic now and into the future. So with that quick intro, Itay, how you doing? Thanks for taking the time and thanks for coming on the show.

Itay Paz:

I'm good, and thank you for inviting me.

Brett:

Yeah, it's great to connect with you. I don't even know how I found your newsletter, but I remember after a week or so... A lot of times I subscribed to things and then I realized, why did I do this? This was such a bad idea. And my inbox is full, so me and my assistant were unsubscribing. But your newsletter, I don't know how I got it. And then I'm like, this is great. And I'm sharing stuff from the newsletter with my team, it's just really valuable. So, maybe just a quick insight on what is Morning Dough. And then I'm just going to pick your brain on email marketing and newsletter creation, and I think it'll be a lot of fun, but what is Morning Dough?

Itay Paz:

So Morning Dough is a daily newsletter that curates the best online marketing news on a daily basis, we sent five times a week. And the great thing about it, or the two great things it's curated manually. At the end of the day someone is doing the work manually. And second thing is, this someone has 25 years of experience, meaning myself. So-

Brett:

That someone is you.

Itay Paz:

Yes, me.

Brett:

You are the magic behind.

Itay Paz:

So I'm actually the person that wants... Well, we have a system that actually curates initially all the titles and have it, and then we take it into a smaller list because some of the things are duplicated and written in many places. And then there's a 300 titles list, and from that I select personally the things that's interesting to me. And we just put it plain and simple. People can read it in less than two minutes. You get what's going on. If you need to read more, you read more, like you said, you can transfer it to someone else, but it's really cool, very simple, clean format, and we get reviews just because it's so simple.

Brett:

Yeah. And the thing that I noticed and the reason I started consuming all the time was I opened it in three days in a row I was like, oh, that's the stuff I'm interested in. Those are the articles I need to look at. Hey, here's what Google's doing with moving away from cookies. And here's some privacy changes, but it was some of the best articles and you'd have the tiny snippet so all you want to do is the headlines and snippet great, otherwise click through and read it. So, really great stuff. Kudos to you. I'll link to it in the show notes, I think you should check it out.

Itay Paz:

Thank you.

Brett:

But let's talk about building an email newsletter because... And I kind of alluded to it a minute ago, but as we get into this privacy first web and then some of the ways that we target people with our advertising it's going to change a little bit, I think there's still be plenty of opportunities to advertise, but it's going to change a little bit. I think people have kind of predicted the death of email for a decade or something, and now finally people have stopped or it's like, okay, yeah, email is going to be here probably forever. And the most successful e-commerce companies I know they have a large email list and they utilize that list, they communicate with that list effectively, and they monetize well. And so, let's talk about if you're advising a merchant or service provider like myself, the agency something, what are the tips you would give in building an email newsletter?

Itay Paz:

So, I'll give you the tips and you mentioned earlier that everyone should have it. It's very effective. It's so effective. Every research done shows that it's also cost effective, so the investment you make in your dollars coming back few times more than any other investment in online which is very important. So, creating a newsletter is pretty simple. So don't be stressed about it. Some people say, "Oh, I don't have writers, or I do have writers. It's complicated, we don't have time." And it's totally understandable. You need to remember you want to build some kind of an email marketing it's like a muscle. What I mean, as you strengthen it, right? You do the exercise again and again and again, then the muscle gets adjusted to what you do. Same way goes to email marketing.

Itay Paz:

So your audience, as long as they keep on sending them emails and they open it, they get to used to opening your emails and that's the easiest way for you to get your current customer to buy more, or just people that registered into one of your opt-in or one of your either deals or relearn discount, whatever it is coupon, and then you can email them as well. Now, in order to do that you need to do one simple thing. When people subscribe to your newsletter and we'll talk about what type of newsletter, the most important thing is always to tell them what they get and when they get it. Because if you just subscribe and now you mail, let's say once a week or once every two weeks, and then suddenly you say, "Whoa, I have a big promotion. So now I'm sending every day an email." These people will opt out and probably complain about you spamming, although you're not spamming because they did give you the permission apparently.

Brett:

They opted in but now they feel you're spamming them.

Itay Paz:

Exactly, because the button is very simple, just click spam and that's it. So it's always good to tell people, "Okay, we're going to email you four times a week, two times a week, once a week." Tell them what you're going to do. And I wouldn't recommend it to be less than once a week, just for one fact that they want to remember who you are. So if you send them once a month and then they forgot who you are, this is why I'm sending them.

Brett:

Yeah, that's one of those counter-intuitive things of email marketing, right? Where people think, oh, I can't email too much. I'm going to email every month or two. I remember when the lockdown's first or COVID was kind of first hitting and everybody sent out their emails of what they're going to do about COVID. And it was like, oh, I forgot I subscribed to that. Cool, I'm going to unsubscribe. I don't need to be on that list. This was the first time you've emailed me in a quarter or something, I don't need to be on this list. And so yeah, if you email too infrequently it's just going to be a reminder for people to unsubscribe. So you're saying no less than once a week?

Itay Paz:

Yeah.

Brett:

Okay.

Itay Paz:

You want to be in their minds, they remember you, and also you can actually segmentize the list. So if you have people registering to get send me deals, so that's a different list than the newsletter and they get the deal. And you tell them, "I'm sending you the deal as soon as they're out. So if there's a deal at two o'clock and then you have another, whatever special coupon offer tonight, you might send two emails, but you tell them that they'll be happy because they're looking for this deal. They're looking for coupon. So it's very simple. Now, if you go to transaction emails, it's a completely different thing. It's normally the systems, the transaction people buying confirmations. These are not the things we're talking about, but these are also something that is important for you to set up if you haven't until today.

Itay Paz:

And lastly, of course is what we call the newsletter. The newsletter is a simple format, you can select one, two or three simple formats that you mail with. Usually either updates news about your company, your products, what you do, and it could be also earn, or you can have a newsletter which is what we do is curation. So we don't have our own products. So we deliver news about the industry. So for example, if you're an e-commerce store selling, let's say fitness products. So if you send a weekly newsletter that has five, six, 10, depending on your market, of course, curated titles or information about special research that's done about something, or a new video that was released by someone that is relevant, or if there is a special event for fitness, the day of the fitness or whatever it is.

Itay Paz:

So you can curate and put this information your audience will love it because you're actually making it fun, right? If I love fitness and going to the gym and doing this stuff so I like to read about it. So you're actually giving me service by just pointing me and telling me, "Hey, here's an interesting article to read. And this is how like you said you got the newsletter for the Morning Dough and you said, "Oh, this is what I'm interested in." And we didn't try anything. We just curated for you, and it's high value. People perceive it as high value. It doesn't matter if I wrote it or I just curated it, it's the same thing.

Brett:

Yeah, I love that. And so, how do you see this playing out for an e-commerce store owner? So, I run an e-commerce store. So let's say it's an apparel brand. What tips might you give me for creating a great email newsletter? And would you recommend that email newsletter be a once a week thing, a minimum as well? Or how would you advise an e-commerce store owner?

Itay Paz:

I would still do that, because if you're doing an apparel and if you're doing digital marketing you probably have a blog to that, then you probably have some different blog posts. So maybe, the collections of the week or a certain season is coming, or a holiday or why do women love to wear hats and what hat you want to wear which event. So you have the content there. You don't have to send them out to other content you can... And that's what I said, or you can actually say, "Here's what we wrote about hats or the new season. " Whatever it is. And you can also say, "Here there's a new event for whatever it is, the new fashion week, and you give the link to whatever it is.

Itay Paz:

So it's perfectly fit for you just collect the information and the things you're already making, you don't need to say... Well, you can write from scratch and use it, all right? You can have the... Okay, so I'll go back to the start. You can have a newsletter which it looks like a blog. So basically, you're writing a newsletter. It's a blog post, it's a long one. You write it nice, and that's one way to do that. The other way is just directly to the content you already create anyway, and you don't need to make all the efforts of writing in again the new stuff, you just package it differently and push it to your audience. Does that make sense?

Brett:

Yeah, it totally makes sense. And I think one of the keys here is thinking about repurposing content, right? So, I host this podcast and so, we're cranking out three episodes a month. And so, we transcribe these podcasts and we email our list of podcast so that they can check it out and people will dig into the content that they want, and then we can sometimes create a blog post about the topic of the podcast. And so now we've got multiple ways to use that content and then to share that content, and I know my buddy Ezra Firestone with one of his companies, he does a weekly digest where he highlights, okay, here's some cool things from our blog, here is something cool on social media, in our community, and here's an article, too. Right?

Brett:

So it's kind of similar to Morning Dough, but it's a curation of what's already in their ecosystem. You can do something very similar, I think for an e-commerce brand. So I think the cool thing about content is that it's very intimidating at first and it feels you're just going to burn out, and how could you ever create one email a week? But once you start understanding the structure and what goes there, it really can become kind of fun. And it's not as intimidating or as hard as it sounds.

Itay Paz:

Just to share with you. So when we began the Morning Dough, and it went through different formats, but it took us about, I would say one day to craft. So it was one day worth to craft to one newsletter, just because the process wasn't there, but once we did figure out what works for us, what's good for us. If you like to write, I would say write. If you like to curate, curate. If you have content already ready, then use your content. But once-

Brett:

If you like to speak do a video and have it transcribed and then use that.

Itay Paz:

Exactly.

Brett:

Yeah, do what fits for your personality.

Itay Paz:

It takes us only one hour, for me one hour today to craft a newsletter. Well, maybe a little bit, one and a half hours. That's it, it's very short and it fits to what I like to do. And I want to say one more thing, you need to know your audience.

Brett:

Yeah.

Itay Paz:

So if your audience are... Let's say you're a e-commerce store that sells business suits. So your audience are probably business people. I would imagine their time is usually very limited. Just giving you an idea, try to be shorter to the point versus if your audience is, I don't know, you sell a website for, I don't know, something that fits to the elderly people. I have no idea what could it be. I don't know, bow ties. I don't know, something like that.

Brett:

The bow tie shop. I like it.

Itay Paz:

Yeah, it goes to the elderly people. They love to read, they have more attention-

Brett:

Elderly and hipsters. Hipsters like the bow ties as well. So you don't get the young crowd, but anyway, we we'll stick with-

Itay Paz:

I meant in terms of the attention span, think about the attention span of your audience. For me I know that the audience for Morning Dough they are all marketers, business people, so they read faster. There's so much content, they don't need me to write them a long newsletter. They will never read it. I don't want to read it, so why should they read it as a digital marketer?

Brett:

Yeah. Yeah.

Itay Paz:

So the same thing, think about your audience whether they like to write, read, and how much time they have, and just build a format that works. You can even ask them. Many times we ask people, and we got the reply. People said, "Hey, listen, this was the long word." And then we shortened it. And we shortened it and we shortened it, and then we were left with just the line, which is a snip like you said. So you just amend it and fit it to your audience.

Brett:

Yup. Yup. I love that. So any point you would point as a great example for a newsletter that people can learn from and potentially copy, or be inspired from? Obviously your newsletters' great. I'm also thinking of e-commerce brands and I'll mention a couple that I think people should subscribe to and learn from. One is called Huckberry. So Huckberry is a men's apparel line, and they're always just telling a great story about a new desert boot or a new jacket, or a bomber jacket or something. Just their fascinating stories sort of... If you remember the J. Peterman catalogs from long ago, and J. Peterman was kind of made fun of in the show Seinfeld back in the day.

Brett:

But, Huckberry is kind of like that only like not cheesy, but they're telling stories about price. I love their newsletter, I open it a lot. Everyday California, good friend of mine Chris Lynch, he's been on the podcast before. They sell cool apparel based in San Diego. And so it's kind of a so Cal brand, they've got a great newsletter. I mentioned is it Boom by Cindy Joseph, I think sign up for that watch what they do with their email marketing. Who else would you recommend people watch and pay attention to?

Itay Paz:

Well, in terms of e-commerce I can't really pinpoint the specific website for e-commerce.

Brett:

Yeah.

Itay Paz:

But I would say first of all, and before I name a couple of names, go in like you said, registered to view even in your niche and see what people do, look at the formats and find what works for you. Don't copy the format . Well, you can copy, but I mean, do-

Brett:

Be inspired by but don't copy..

Itay Paz:

We began by copying something that the format that the other people do, and we said if that works for them and they have millions of subscribers, happy ones, we should do the same. But we felt it... Eventually, that didn't work for us. So just find something that looks good but fits to you, so one of the formats that we as the Morning Dough. So there's the Morning Brew, it's completely different industry, but they have a very-

Brett:

I like the Morning Brew, too.

Itay Paz:

Yeah, they have a cool... It's a longer format.

Brett:

It is.

Itay Paz:

Much longer format and they have their own writers, but to get inspiration, definitely also the hustle, and that also it's 1440 newsletter. And it's also a great one. So this two I would definitely subscribe to get some information and see how it looks in the format.

Brett:

Yeah. I'll second the Morning Brew. So I'll link to both Morning Brew and Morning Dough. Those are the two newsletters that I pay attention to the most different formats. Yours is curated, Theirs is more of a long form, you just kind of read what's in the email, but really good stuff. So what are tips and tactics for... How do you get people... How do you keep people consuming your newsletter over and over again?

Itay Paz:

Well, the thing is all about the content you send. But some people would say it's all about... You see the open rate, for the many people see the open rate if you do a sequence or something, you see their open rate goes down and down because over time people don't read it. And we tested so many titles, just idea to see is the title actually affecting the subject line. Yeah. Yeah.

Brett:

Correct.

Itay Paz:

Subject kind of email. Yeah, sorry. And about two and a half weeks ago, I had a day that I couldn't figure out what's the best title. I didn't find something that is, oh, wow. So I said, "Let's put Monday mornings roundup. That's it. And we saw that the open rate was the same as the other emails, then I see the Tuesday, Wednesday, Thursday, and we found out that it's the same thing. So how can it be? Right? It's crazy, and that goes to what you say, how you make people actually consume it. It's all about what you put inside, right?

Brett:

Yeah.

Itay Paz:

So if I take for investors, okay, let's look at the investors. And we have Berkshire Hathaway CEO, right? And he writes a newsletter, it has one paragraph. It says, here's my weekly tip. It doesn't matter what the title will say, the subject of the email, if you're into investing you'll read it, right? Because there's gold inside. So that's the same thing. What we try to do is see if we give enough value that we'll see that the same people still open, it doesn't matter what the title is and what the subject of the email and that works well. So going back to e-commerce or anyone else, it's all about the value you put inside.

Itay Paz:

If you make it a sales promo, pushing just... It's okay if you told them in advance it is like that, but if it's an user for updates, then make it fun. Like you said, make it enjoyable so people will like to read it and they will open again and again. They'll have a smile and say, "Oh, this is really important for me. This is interesting. Oh, there's a new gadget or there's new product that is coming up soon. I can now preregister. Cool. Pre-order give me the details." So it's all about what you put inside, make it fun, make it effective so people get to open and again, and again. Once you do that... It's a cool secret. Once you're able to make them open again and again, at least once a week or more, then you can actually send more emails. So we're sending them out five days a week. I don't want to call it get away, right? Because it's not getting way. But I can send another two, three emails just with a promotion or anything and no one will complain.

Brett:

Yeah. No one want to.

Itay Paz:

They're getting enough value from you. That's what I'm saying. Put the value, people will open your emails, your promotion emails, whatever you send with the value inside. And like we discussed earlier, it could be interesting things, links, your information, whatever it is.

Brett:

Yeah, yeah, yeah. And the curation process can be simple if that's something you enjoy, making a collection of things that are interesting to you and that you think will be interesting to your audience. And now you've got a curated newsletter and the Morning Dough is proof that that can be super powerful. I think, where people get into trouble is when they start crafting an email newsletter or any type of content because they feel like they have to, right? I'm supposed to create an email newsletter, so I'm going to. And then it can feel forced or staged and there's no real purpose here, but if you're delivering value, if you're giving great tips or ideas, if you're entertaining a little bit, if you're delighting the person that reads the newsletter in some way, yeah, once you get into a habit of opening an email, people will stick with that. Do you have any kind of quick tips though on subject lines? Cause people always like tips. I know some of the things we've found that help is lists, so seven ways to XYZ, or a secret to do this, Any kind of formulas or structures, or tried and true subject lines you go back to?

Itay Paz:

So first of all, emails with numbers, people always open. Numbers, it could be figures. Okay, it could be-

Brett:

People just want to know, right? It's like curiosity type of thing.

Itay Paz:

Always, and that's why also short titles could be very intriguing, like really, for example, or this is true or whatever it is, people are intrigued to see what's inside the email. So definitely, short and intriguing, and numbers are always winning. I can tell you also empty emails, empty subjects also work, but not every time. Once in a lifetime.

Brett:

Five days a week they're all empty subject lines. Yeah.

Itay Paz:

But also they know it's you. Yeah, and also having re RA it's the return email again, do it smartly. Don't put it as a spam thing because people don't like it. Also forward, right? So, if let's say you're sending me an email and it's very interesting, I will do F, well, W, right? In the subject, and inside I'll say, "Here's an email I got from Brad and he was talking about that and that, and I'm putting a quote from what you're saying, so people will open it again. It's all kinds of things that on the top people are looking, and another factor that is really important is the sender.

Brett:

Yeah.

Itay Paz:

So an e-commerce store usually don't have a face. Most of them.

Brett:

Usually it's the brand.

Itay Paz:

Right? It's Amazon, Amazon. Does Amazon write from Jeff? Powell Jeff? No.

Brett:

Yeah.

Itay Paz:

So we always try to put... Well, I'm putting my name and Morning Dough. So I'm getting again, remember the muscle we were talking about that people get to know me and also the name, they're opening an email from Itay as well so they have the personal relationship. When I ask them, can you tell me your advice about something they understand and not answering to the best team or best regardless team. It's someone. Have someone sign on it. It's not a big deal, and it's humanizing the emails. So people love to open emails from people, not from companies, or it's better in many ways.

Brett:

Yeah. Make it personal? I totally agree with that, totally.

Itay Paz:

One more thing.