An eCommerce Podcast Hosted by Brett Curry

Austin Brawner

The eCommerce Influence Podcast

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Mentioned in this episode:

Traffic & Conversion Summit

MVMT Watches

Pura Vida Bracelets

Chris Lynch

Everyday California

FLoC

Custom Intent Audience

Avinash Kaushik

“Made to Stick” by Chip Heath

OMG’s YouTube Ad Examples and Templates

Val Geisler

Klaviyo

Jay Abraham

Three Ways to Grow a Business

BOOM! by Cindy Joseph

Verb Energy

John Warrillow

“Built to Sell” by John Warrillow

“The Automatic Customer” by John Warrillow

“The Art of Selling Your Business” by John Warrillow

Hammacher Schlemmer

Onyx Coffee

Josh Snow

Sarah Still

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Episode Transcript

Brett:

Well hello, and welcome to another edition of the E-commerce Evolution Podcast. I'm your host, Brett Curry, CEO of OMG Commerce. Today's episode is different, you get not one E-commerce podcast host, but two. I have my good friend, Austin Brawner on the show today and this is a joint podcast, a fusion of the E-commerce Evolution Podcast and Austin's podcast, E-commerce Influence. It was one of the first podcasts I was ever a guest on, believe it or not. So we decided to do this podcast together. I interview him, he interviews me, and I think you'll find it to be a lot of fun.

Brett:

Now, a quick background on Austin. I first met Austin at an E-commerce event we both spoke at. I think it was about 2013, I think it was Ezra Firestone's, one of his first events, and that's were we met each other. Then Austin and I had this dinner after Traffic and Conversion Summit one year. It was a dinner that Austin put together and it was the who's who of cool E-commerce brands. Guys from Movement Watches were there, guys from Pura Vida Bracelets were there, my buddy Chris Lynch from Every Day California was there, a couple of big agency people. It was really, it was a ton of fun, Austin put it all together. It just shows you how connected he is in the E-commerce space.

Brett:

So I do want to mention, you've got to listen to E-commerce Influence. He interviews founders like the ones I just mentioned, and he's a brilliant podcast host as you'll soon hear as we dive into this episode. So we really cover a wide range of topics. We talk about privacy and iOS 14 and what that means for digital ads. We talk about creatives and what my approach is to crafting great video ads. We talk about things like subscriptions and E-commerce business models that we're excited about, and where do we see things headed in the E-commerce world. So I hope you enjoy this as much as I enjoyed recording it. So with that, let's dive right in, listen to this joint podcast with Austin Bronner from E-commerce Influence.

Austin:

Brett, excited to chat with you, man. It's been quite some time. We were just reminiscing, I think the last time we saw each other in person was probably at Traffic into Conversion Summit years ago with dinner with Steve and Drew? Was that the last time?

Brett:

I think so, yeah. So in person's been years, it's been too long virtually as well for podcasts and stuff. I know we send people to each other, we're like, "Hey, you need to talk to Austin for this," or you send people to me, but it's been entirely too long. So I'm really glad we're doing this right now, yeah.

Austin:

Yeah, man. It's definitely exciting, and yeah, lots has changed. This episode today, we wanted to hop on and connect and do a joint episode where we talk a little bit about some of the exciting things that are happening in E-commerce related to privacy. I say exciting because they're exciting for some people and not for others.

Brett:

Terrifying and nerve racking and anxiety inducing but also interesting. I think it'll be one of those moments, some watershed moment, whatever you want to call it, where it likely will create some true winners and losers and it's going to be interesting for sure.

Austin:

So yeah, so we're going to cover, we'll talk about that and we'll talk about also what we're excited about, things that we're seeing happening and I don't know, general trends and what's going on. It's a good time to catch up and dive into that.

Austin:

So I want to start by turning it over to you because you are in the ad buying world a little bit more than I am, on the front lines of the ad buying world. What is going on with some of the privacy changes? What are things that people need to know about? I have a little hesitation because there's a lot of talk about this, but we can get really nerdy, but overall, what is going on? What do you see is... what should people care about right now as we see all these privacy changes?

Brett:

Yeah, it's such a good question. I think the strongest word to use right now is uncertainty. We don't know exactly what's going to happen or how this is going to play out. We hear all types of plans that different platforms have. You got Facebook throwing up their arms and saying, "Hey, this is going to be unfair," all the privacy changes from iOS 14 and things like that. Google's announcing different things they're going to be testing and experimenting to try to get around some of these privacy things. They announced no more cookies starting next year, so we're moving away from cookie based targeting all together. So it's really interesting times.

Brett:

Just to give a little context, I'm a Google and YouTube guy, so we do some Facebook but I don't really get into Facebook so I can't speak personally with too much expertise there. We do a lot on the Amazon side as well, but Google's experimenting with things like, I don't know, Austin, have you heard of FLoC? Have you heard of Google... this will be slightly nerdy but just a little bit. Not enough to put anyone to sleep, but slightly nerdy. So as Google's moving away from cookies and targeting individuals, they're talking about how to target groups of people where identities are private and cloaked and stuff.

Brett:

So FLoC, it's an acronym and I think it's an acronym that I think they thought of the acronym first and then tried to fill in the meaning, because-

Austin:

Sounds like they definitely did that.

Brett:

Yeah, because it's Federated Learning of Cohorts. I'm like, okay, that's interesting, but basically what they're doing is they're saying, "Hey, instead of targeting individuals and based on behavior, based on search behavior, based on websites they visit, things like that, we're just going to put people into these flocks or these groups based on behavior but it'll all be anonymized and stuff." Anyway, so Google is saying, "Hey, early tests show the performance of FLoC is 95% as good as what we're doing now," but then you hear from browsers like Firefox and Microsoft Edge and a few others that are saying, "Yeah, we're probably not going to implement that. We're not going to use the FLoC technology." So then that technology would just be available on Chrome, as an example.

Brett:

So I think the bottom line is there's just uncertainty. The way there's been this trend where marketers have been able to give more and more control to the algorithms and to machine learning and just let the machine, let Google, let Facebook decide what to do. We may see a decent pivot away from that, at least for a time and at least to a certain degree, or maybe old school marketing comes back into vogue, or maybe some of the old ways of targeting become more valuable. Where it's all about building an email list and where it's more about the creative than it is anything else. So yeah, I think uncertainty really captures it, and we may see a renaissance of sorts in some forms of advertising. We can unpack a lot more there, but that's just a general first thought.

Austin:

I'm excited to dive into all of those things. I want to go just to the privacy side where like you said at the beginning, they're making changes. Where are they making changes, at what level? At least, what are you familiar with? What are some of the big, I guess, top level changes that are being made?

Brett:

Yeah, so right now if you look at Google search and Google shopping, so query based marketing, search based marketing. I don't think that's going to change a whole lot. We're not seeing any changes right now. We're talking to our Google reps every couple of weeks about this and trying to stay up to date and stuff. Not seeing any changes there, not really seeing any changes on YouTube just yet, although you and I were talking the day of this recording, seeing some volatility, especially hearing some Facebook advertisers, some volatility right now.

Brett:

So some of the audiences we've relied on in the past, so I'll talk about a couple of my favorite audiences on the Google side. One is called Custom Intent or that was the original audience name, that's were you can build a group of people based on what they're searching for on Google. So that's a pretty cool signal to use, what you're searching for on Google is a pretty good signal of what you're interested in and whether you're in the market for something or looking for a solution or whatnot. So, those audiences-

Austin:

Like size 12 Nike Airs, it's like, you know that's something-

Brett:

Yeah, yeah, exactly. Right, so or we, like in another example, and I'll pick one here. We have a client that has a solution for kids who hate to brush their teeth, which as you know, Austin, I've got eight kids so I've got quite a bit of experience in this environment that sometimes you have to bribe, you have to threaten, you have to do hostage negotiations, whatever, to get kids to brush their teeth. So anyway, this client of ours, they have a product that's real easy to brush your teeth, kind of fun, it's like animals, and anyway. So we started doing some toothbrush targeting, people looking for toothbrushes. That didn't work. So then we started looking at, what about people who are just saying, "How do I get my kid to brush their teeth? What do I do when my kid refuses to brush their teeth?" So, that kind of Google keyword, and it's crushing it. So it's like, all right, you can get creative with what people are searching for.

Brett:

So, so far, those audiences still exist and they still work, but that's like, we don't know. Google's indicating, yeah, those audiences will still exist but they're going to be powered by FLoC or whatever. So-

Austin:

Which may not be adopted, which makes it the chance it could go away.

Brett:

Exactly, so that's the thing, it's really targeting is going to change, and attribution is going to change, where I know you and I could talk about attribution for a long time and it's a bit of a black box and a gray area and every marketer has a different opinion on how to properly work your attribution modeling, but that's likely going to get messier and harder. So I think audience targeting and attribution are the two biggest areas that are going to change.

Austin:

That's interesting. Yeah, I see a lot of where we're going. You talked about old school marketing and I think people have different ideas of what old school marketing is, depending on how old they are, but I think what we're going to see is... With all this stuff, frankly, I'm not that concerned. I think it's going to be more of a pain for... I think it's going to cause more disruption for advertising agencies and freelancers, than it is actually for business owners, because it'll change the way that things need to be done. With that shifting, it's going to involve... I don't know, I think the uncertainty is how we're going to get from point A to point B, not necessarily whether or not we're going to get to point B. Point B meaning, somebody making a purchase. People are still going to be buying things and advertising's still going to be effective. It's more like, how on earth are we going to... we've gotten used to doing things a certain way, now it's going to change.

Brett:

Yeah, and so as an agency and I'm very interested in your perspective. How do you think I'll impact agencies? I believe, I agree with you, by the way. I think you're right, but in what ways?

Austin:

I think the uncertainty is more of a challenge for the agency than it is for the business owner because... so the reason I think that is that the way systems, as you build an agency and you get larger and you've got all these systems to do things, you train people. There's just going to be more people involved with having to shift and adjust with that.

Brett:

Yeah, when your SOP's all changed, this is the way we've always done YouTube and now it's got to shift, if you're a nimble agency, great, if not very nimble, yeah, it's trouble.

Austin:

It'll be more internal. I think there's benefits and downsides as well, because you're also going to then get an opportunity to go through and revisit how you're doing things, which can be really helpful and can lead to making some improvements, but yeah. That's where I see some of the uncertainty, volatility happening and it can be challenging in that space.

Austin:

I think it's going to be interesting for business owners because they're going to have to figure it out and I think when you say old school, in my view, it's going to be back towards like, we're spoiled.

Brett:

Oh man,

Austin:

The fact that we can say, "Oh, I spent $1,000 and I made $2,211," even though that attribution is artificial.

Brett:

It's not perfect.

Austin:

It makes us feel good.

Brett:

It's definitely not perfect, yeah.

Austin:

Yes, it's not perfect but it makes us feel really good.

Brett:

Yeah, yeah.

Austin:

It makes us feel really good, oh, I'm putting this amount in and I'm getting this amount back out, where 50 years ago we weren't even thinking about that at all.

Brett:

Yeah, yeah, or just to go back a little bit. I'll date myself a little bit, I'm not that old of a guy, I do have a lot more gray in my beard that you do, Austin. Your beard has stayed the same, my beard has really gotten a lot grayer since the first time we did a podcast. Maybe it's the kids, or I don't know, but.

Austin:

Or a growing agency. It's the-

Austin:

It's the privacy changes, the privacy changes.

Brett:

Yeah, people on a team, exactly, I love them but yes. So back in the early 2000s, I was doing radio and TV and some other stuff, so I was working all with local regional businesses and running TV and radio ads and stuff. We could tell, the business owners could tell when the phone rang more, they could tell when more people came in the store, but attribution was a mess. We'd have people, we'd be running radio and direct to mail and people would come in and say, "Oh yeah, I saw your TV ad." We're like, we're not running TV, I don't know how you say a TV ad. So that was really imperfect attribution.

Brett:

So now even the tools we have, we are spoiled because even if they're not exact, they're directionally correct. It's at least indicating there's some impact from these campaigns and from these messages, where before it was substantially harder.

Austin:

I think back to the old school style, you see... So, one of the things I really think is great and has been relatively new in the last couple years innovation is, just going to surveys, post purchase surveys at the end of a checkout. It's like, you can build your own attribution model based on what's happening from a survey. You can look at your different... Actually, we were having a call last night for Intentional Wealth, which is my mastermind group. One of the guys was talking about, he was like, "I spent 45 hours looking at attribution over the last two weeks." We were all laughing, I was like-

Brett:

.. that sounds really fun, yeah.

Austin:

Yeah, we were all... he was joking around, but he was like, and he was like, "What I realized, I'm just trying to find my own model." He was like, "The reason I spend so much time is I'm looking at all the models to create my own model, and one that I can go forward with. I recognize that everyone's putting their thumb on the scale a little bit. So we'll figure out what works for me."

Brett:

Yeah, and one interesting thing I'll say about attribution is we're a Google Premier Partner, so top couple percent of Google agencies, and have been invited to Google Marketing Live, it's an agency event that Google hosts every year. Used to do that live, in person. I remember, it was maybe five years ago, something like that, Google announced... I was at the New York Google offices and they announced Google Attribution, and they were like, "This is going to be it. It's going to tie in, it'll use machine learning, it'll look at Google Analytics, it'll look at your ad accounts, and it will use machine learning to look at conversion, paths."

Brett:

So hey, Austin bought from the website and he clicked on a Facebook ad first, and then a Google ad, and then organic search, and then this. We're going to combine those and look at those, use machine learning, and say, "Here's what you should attribute to each platform." So it was like, everybody was excited, I was geeking out, I was telling everybody about it, but nothing really happened. Then the next year, at the next Google Marketing Live, Google's like, "Yeah, attribution, okay it was a little harder but we're working on it, it's coming." Then nothing.

Brett:

Then the third year, I'm like, what happened to Google Attribution? Someone said, "Well, there's a dude at a small booth back here who's the Google Attribution guy." It's like, it faded, it went away. I think it sort of still exists, but so if you've got the smartest people at Google working on Google Attribution and they still don't have a real good solution... and I know there's other third party solutions and stuff that help you try to get closer, but I think that just underscores, it's not an easy problem to untangle. It's not a... even with machine learning and stuff, it's pretty challenging.

Brett:

So I think if you can... and one of my favorite quotes on the topic comes from Avinash Kaushik, he was the Google Analytics evangelist, has written books and fantastic guy to listen to, but he said your goal was to be less wrong. Just work on being less wrong because you're never going to be exactly right. I like that perspective.

Austin:

I like it, until we're all micro chipped and we're transacting but via our eyeballs, look at what we look at.

Brett:

Right, right.

Austin:

There'll be perfect attribution.

Brett:

... Google homes listening, everything in our eyes are being tracked. Until that comes, which probably isn't too far away. Yeah, exactly.

Austin:

Or just flash pockets who transact. That's-

Brett:

It's really encouraging future we're talking about here, I'm really excited about where this is going.

Austin:

Oh man, well so outside of the privacy stuff, what else are you excited about? What are you seeing that's been cool, that's making you say, "Oh wow, that's interesting"?

Brett:

Yeah, so I'll start with and this is top of mind because I get to... So I'm CEO of the company, so I'm building a team and running things and I'm also still managing, or not managing, I'm in some client accounts, and so looking at stuff like that too, but I mentioned this earlier. I believe the creative side is going to be more and more important. What you say is so valuable.

Brett:

I remember and again, we're tying this back to old school, tying it back to the old days but I just remember a good TV ad or a good radio ad versus a mediocre one and just the huge response difference. So I think there's going to be a lot more dependency or good creatives. So that's something we're doubling down on, we're finding good videographers, good script writers and pulling them together to work on creative projects. So I'm super excited about that. I still think there's going to be ways to test and improve on the creative side, even if some of our audience targeting and audience measuring things go away.

Brett:

So I like that, I used to like infomercials as a kid, which is really weird. I enjoyed watching the Ginsu Knife commercials and some other nerdy stuff like that. So I really get into the creative side of it, and I think that's going to be coming back. So that's the first thing that comes to mind and I've got more so I'll get into that, but. What about you? What are you excited about right now?

Austin:

I have some stuff but I want to ask you some more about creative-

Brett:

yeah, yeah, yeah, great.

Austin:

... because the thing that came up for me was the unique perspective you've got with a large agency of, how do you pump out creative? What are the systems? What are the things that you guys do that people can learn from? Because it's hard, it's not... I think a lot of times people talk about just, you have better creative. That's freaking hard.

Brett:

It is, it is really hard.

Austin:

It's really hard to do it over and over and over and again, new and... So yeah, what have you learned about pumping out good creative?

Brett:

Yeah, I think a couple of things. One of my favorite books that I'll recommend is called, Made to Stick. Have you ever read that? Chip and Dan Heath?

Austin:

I haven't read it.

Brett:

Got to check it out. So one of the things that they do a really good job of talking about and highlighting is that the creativity can be formulaic and good communication can be formulaic. So there's a study they reference in the book where they say... they took the most successful ad campaigns in recent decades and they realized, we can classify all of these campaigns into six or seven different categories. They all follow a similar pattern.

Brett:

Then they looked at a whole bunch of ad campaigns that just flopped and they said, "We can't really categorize any of these. They're all bad for unique reasons," but good ads can be formulaic, not that you want to be just a me too or you want to just duplicate what Squatty Potty is doing or something or what a big YouTube or Facebook advertiser is doing, but you can learn from formulas. So I think that is one of those things that can free you up a little bit.

Brett:

So I actually got, I put together a free resource where we pulled in our favorite YouTube ads and categorized them and broke them down on how they work. So it's a free guide, it's on our site at omgcommerce.com, so check that out.

Brett:

But one of the things that I would say is, really if you break it down and think about, I'm not reinventing my message. My core, if I have, what is my one thing, what is the thing I want to be known for? Then, what are the supporting elements that go with that? So Geico is, save 15% on car insurance, 15 minutes saves you 15% or more on car insurance, but they have lots of other little benefits too, like they're really high in customer satisfaction, and they have all these other things. So they've got the one thing, and then they've got their supporting cast. So that doesn't really change.

Brett:

So if you keep in mind, I don't have to reinvent that, those things stay constant. I just need to think of a fresh way to say it and really, we break it down on a few things like, let's test different hooks. So what are the... we know we want to lead with our strongest benefit, we know we want to lead with our one thing, but how do we lead with it? So let's throw out a bunch of hook ideas, let's test 10, 15, 20 different hooks. Okay, what is our offer? Well, let's test five, 10, 15, 20 different offers, and then in the middle as we're looking at the problem, solution, presentation, or the proof elements, some of those things, the myth busting. We test a few elements there too, so it's like, if you create formula, you break it down, then it can become fun. I know I say that because I'm a geek that likes ads, but I think it can be fun for other people too. Also, when you realize you don't need that many home runs, you really don't even need very many home runs at all. Doubles and singles are great too, and so I think those are important.

Brett:

Then the other piece is, I think relying on your customers. Let your customers feed you with new content. So getting testimonials, and you can do that remotely. Mining your product reviews and your customer support tickets and things like that. Mining that for content, for headlines, for hooks, for objection busting, things like that. Let your customers do some of the work too, I think that helps a ton.

Austin:

Yeah, it's one of those things that makes it easier and more effective. A win-win.

Brett:

Yeah, yeah, exactly, yeah. Maybe the most effective thing you could ever do is just repeat something a customer says to you. It's like, wow, that didn't take any creativity at all. That's another thing, and Chip and Dan Heath, the author of that book should pay me some of the royalties because I recommend it so much, but that's one thing they talk about too, is sometimes creativity is just spotting the idea.

Brett:

So one of the examples in the book was, remember the Jared, Subway? Jared, the guy that went on the Subway diet?

Austin:

Yep.

Brett:

Ended up he fell off the wagon and that kind of faded.

Austin:

Fell off the wagon quite hard.

Brett:

It was ugly, it's like, so forget about that part but for this, there was a number of years where that was a beautiful, beautiful campaign. It's like, hey, the person that did that just spotted the idea. They were like, oh, there's something here, I'm going to run with it and I'm going to make something huge out of it, and they did. Sometimes that's all we need to do. We don't need to maybe necessarily manufacture a creative idea, we just need to spot it, and then know how to exploit it.

Austin:

You need to spot it, use it, and then get rid of it before it ends up in prison.

Brett:

Yeah, before spokesperson goes to jail or whatever happened. I don't even remember what happened, but it was bad.

Austin:

I think he went to jail, I think he went to jail. That's really interesting, I'll have to check that out. Yeah, I was just interviewing Val Geiser, she is the customer evangelist at Klaviyo, but she's been a copywriter, freelancer, ran an email agency. She was talking about one of the things she loves doing is customer research. She throws out a... So when she starts, when she would start working with clients, she would email 800 clients a survey. On that survey, have a checkbox that also said, "Would you be interested in being interviewed if we select you?" So as soon as that 800 or 1,000 people gets back 100 or 200 results, filters through, finds the best ones, and then if the ones that are selected for an interview will actually dive in.

Austin:

It's to your point, it's just selecting the idea because it's coming to you. She said she's not... she's like... it was a great saying, I don't know who said it to her or if she came up with it. She's like, "I'm not a copywriter, I'm a copy paster."

Brett:

Copy... I love it.

Austin:

I'm a copy paster.

Brett:

It's so true though. Just one other quick example, worked with an automotive brand that just crushed it on YouTube and other platforms. We had an ad that just scaled like crazy for over a year. It was entirely a mashup of user generated content. So we added text, we strung it together, we had an awesome... I say we, I gave advice. They had their own editor, but it crushed it. It was entirely UGC with just a little bit of editing and some stuff to it. That's still the case, I don't see that going away anytime soon.

Austin:

Yeah, yeah, I mean it's we're in a unique time where it's easy to pull from our customers.

Brett:

Yeah, yeah, way easier now than ever before for sure.

Austin:

Don't need a focus group.

Brett:

No, no.

Austin:

I think what I'm interested in right now, couple things. One is just continuing to go down the path of subscription and adding subscription. I think the thing that's interesting to me more these days is less marketing tactics and more business model.

Brett:

I love this, I love this.

Austin:

Focusing more and more on like, okay, where is the underlying business model? What are some things we could change to make this more effective and make it... build it in a way that allows the company to grow faster without taking so many resources, and also allows you to out compete your customers just based on your business model?

Austin:

I think one of the things that's been most interesting to me over the last year or two that I'll share is, I had a guy on my podcast. We were talking, he sells commercial grade marijuana growing equipment.

Brett:

B to B or to people that are just -

Austin:

B to B, B to B. Mostly B to B, there's some B to C but it's primarily B to B type thing. These are very expensive and you can't advertise them.

Brett:

You can't advertise anything CBD, and certainly not anything marijuana, of course, yeah.

Austin:

Yeah, and so he was like, okay, well I got to get creative here on how I can get traffic. One of the things that he did, because he told me, he was like, "Yeah..." he's like, "I have negative customer acquisition cost." I was like, okay, how does that work, but what he did was he went out and he connected with all of these huge grow operations. So these are big, big grow farms in California and I don't know, wherever else they are. They said they would... he was like, "I pitched them to film a Cribs episode at their grow operation." They paid him to do it, he put it on YouTube and made his Cribs channels. It got millions and millions of views and then he linked to sell his products directly in the comments. So he has negative customer acquisition cost, which I think is pretty darn cool.

Brett:

Yeah, yeah. That's amazing. So a couple quick questions there. First of all, I love this. You and I, I think when we did our first podcast, we both talked about the fact that we were Jay Abraham's students from way back in the day. He's an old school marketer, but he talks about the three ways to grow a business. He talks about business model and stuff too. I think this is so interesting, so I've got a couple thoughts here and a couple questions for you.

Brett:

One, are you finding... So I love subscriptions as a consumer. I end up subscribing to probably too many things, but I like the convenience of it. Then my buddy, our mutual friend, Ezra Firestone, he runs Boom by Cindy Joseph, and we do all the Google and YouTube ads for Boom. People in his market actually hate subscriptions. They just took it off because he said people would call after they made a one-time purchase and just say, "Hey, I'm just making sure I'm not a subscription here." Are you seeing, is it millennials and Gen X-ers are really more into subscriptions? Are you seeing any trends like that, or is it more across the board?

Austin:

I think it has more to do with the product and the creativity related to the subscription-

Brett:

That makes a lot of sense.

Austin:

... than anything else. Also, I think the messaging around it as well is incredibly important. What one of the things I've worked with some clients around is, it had a lot of success is, revamping messaging around their subscription. Trying to figure out, I think a lot of people don't put enough effort into making their subscription work or worthwhile for a product that may actually have some success on subscription. I think one of the reasons I have maybe a unique perspective is I've worked with a lot of different clients. When you see a subscription working really, really well for a product that you wouldn't expect it to work well for. Then you realize why, it's because they put so much time and energy into it.

Austin:

Then you can take that and you can transfer that over to another business who may not have the same frame of reference, where they don't realize, oh, well the reason it works well over there is not just because people like subscriptions, because they're very deliberate about risk reversal. They're very deliberate about telling people, addressing any of the challenges in someone's head about why they... the biggest reason people don't want to subscribe to something is because they're afraid they're going to get caught on a subscription and won't be able to easily cancel. So you need to address that.

Austin:

I think it's interesting to me because it allows for you to compete on these paid social channels or on YouTube or in advertising, because you're going to have something that your competitor might not have, which is recurring revenue. The other side of it, it's a much more pleasant way to grow a business when you have, when you know generally a good percentage of the sales you're going to make the next month. I've been on both sides, I've been on both sides where my business now is primarily driven by recurring revenue. I sleep a lot better than I did when my business was primarily driven by events or one-time sales.

Brett:

Yeah, I love that predictability, it is amazing for sure. I'm just curious, can you give an example? So you talk about some businesses or products you might not think about being applicable for subscriptions? Can you think of some interesting ones that you can share?

Austin:

Yeah, so things that... one of them that's very interesting is Verb Energy bars. Have you seen those?

Brett:

No, no, sounds cool though.

Austin:

Okay, so they have a-

Brett:

Verb? Like with a V-E-R-B?

Austin:

Yeah, Verb. Verb, I believe it's called Verb, let me look it up. Yeah, Verb Energy Bars. So they have a trial to continuity model, which is very interesting. So it's a starter kit where you get an initial offer of four bars, it's basically free plus shipping type thing. Then it recurs into a subscription, and they manage the entire thing via text message.

Brett:

Nice.

Austin:

So you-

Brett:

So you can cancel via text anytime you want?

Austin:

You can cancel via text anytime you want, and they also... so the communication is very clear via text what you're signing up for, you actually, it's like the signup for text is a huge part of their checkout process. Where it's like, you need to select, enter your phone number, and it's very clear, we are going to be texting you about, this is the initial offer. Then we'll be texting you in this many days to let you know, and you can decide at that time whether or not you want to have subscription. So that's really interesting.

Brett:

Very easy to say yes to, and then if the product delivers, the product is good, then it's easy to keep saying yes.

Austin:

Exactly, they made all these things stacks so it's easy for you to say yes and that's the first step, is get the product into your hand, especially with something like an energy bar. First of all, it's weird, it's caffeine in a bar. It's not something that you can determine if you know that you want it before you try it. So, they're breaking down some of those things.

Austin:

Other interesting products, well, I think that there was a... I was just interviewing John Warrillow. You know John Warrillow who wrote the book, Built-

Brett:

I know John.

Austin:

Built to Sell. I've read Built to Sell or the Automatic Customer or the Art of Selling your Business. The Automatic Customer is interesting because he talks a lot about the different ways that you can build a subscription business in. One of them is replenish-able, which everyone thinks of, oh, subscribe to razors or something like that, or coffee. The other one is a curation, where you curate some sort of a box. Then there's - Like a Stitch Fix, type of thing? Blue Apron?

Austin:

Stitch Fix, exactly, yep. Then there's also interesting things you can do with a benefits. So this was an interesting one. I didn't even know I signed up for it, I don't know. I think this is a little bit slimy, but it worked extremely well. I bought my dad something, a sweater from Hammacher Schlemmer. You know Hammacher?

Brett:

No.

Austin:

It's been around for a long time.

Brett:

That sounds yeah, very distinguished.

Austin:

Hundred-year old brand or something like that.

Brett:

Did dad adequately appreciate this gift, or what was his reaction?

Austin:

Yes.

Brett:

Okay, okay, great, yeah.

Austin:

Yeah, I knew it's what he wanted. I knew it was this nice sweater. So I get it, and they gave me a refund on my shipping to sign up for their rewards program, which happened to be $11 a month. So re-billing, and so it was their version of their own personal version of Amazon Prime, kind of, but it was interesting, I was signed up for that for like two-

Brett:

$11 a month do? What do you get from that?

Austin:

It gave me discounts for the future. So I would get enrolled for automatic discounts. Again, it's one of those things that people buy a lot from them. I think they're one of those companies, it's a catalog business people could buy a ton from. So it can be worth your time, worth your energy, but they also know they're getting that $11. It's at a price point where you're not generally going to cancel. That was interesting to me.

Brett:

I love it, and think about the psychology of Amazon Prime or any subscription model where with Amazon Prime, that makes people absolutely think Amazon first for any purchase, right?

Austin:

Yes.

Brett:

So the sweater company's doing the same thing for apparel. It makes me think if I want a new sweater, cardigan, blazer, whatever they sell, I'm going to look there first. There's also this interesting thing too about, have you heard of a reticular activator? Have you heard that term before in marketing?

Austin:

I've heard it but I don't know what it means.

Brett:

Okay, so it's like, if you start shopping for... and I just bought a truck recently, so this is fresh on my mind but if you start shopping for a particular vehicle, you'll suddenly start noticing those vehicles everywhere. So you're looking for a 4Runner or something, you'll start seeing 4Runners all the time. It's like, where did these come from? Well, they've always been there but your brain is always scanning for things that are familiar or also your name. Your name is a reticular activator. So you may be in a room where there's lots and lots of noise and you hear Austin, and you're like, oh, I heard my name. It's a reticular activator.

Brett:

So there's something also then once you purchase something and you're no longer thinking about it, now you stop noticing it. So I just recently did a coffee subscription with this company called Onyx Coffee out of Northwest Arkansas. They're one of the best that I've ever had. So now I'm hooked on this coffee, it's fantastic. So I find I'm not thinking about or paying attention to coffee as much, whereas if I was paying attention or I was thinking about, man, I really would like good coffee. I would probably be even subconsciously be on the lookout for coffee. Now that need is taken care of so I don't think about it.

Brett:

So, it's interesting, just the power of subscription to even keep someone away from competitors because they'll probably stop seeing it, stop thinking about it, if they're on a subscription and if they're well taken care of.

Austin:

Yeah, it's super powerful, it also leads to larger valuations if you're looking to sell your business down the road.

Austin:

Speaking of coffee, Brett, 20 days no caffeine.

Brett:

No way?

Austin:

20 days. It's the longest-

Brett:

Now, if I'm not mistaken, have you tried this? You've gone down this path before?

Austin:

Many times, oh yes.

Brett:

Yeah, how do you feel, though?

Austin:

I feel great that first week or so. It's funny is, I don't even drink that much coffee. I just always have one cup of coffee. I'm addicted to one cup every single day. I was like, I don't want to be addicted to something. I don't want to, you know?

Brett:

Yeah, I love it, love it.

Austin:

So no coffee subscriptions for me right now.

Brett:

Okay, good, man.

Austin:

It's definitely been on my mind though. When you were talking about the reticular activation, I think I had some sort of activation for the first week of seeing coffee everywhere.

Brett:

You're seeing coffee everywhere, like, where is all this coffee coming from? Yeah, exactly.

Austin:

Smelling it in my sleep.

Brett:

Yep, yep, oh man, well good for you, dude. That's some serious will power and yeah, I think even if... and you know I'm a big coffee fan so I'll probably never go to it fully, but even if you do little cleanses, little purges to try to slow down that addiction would probably be good.

Austin:

For sure, yeah. No, the valuation thing is very interesting to me. I look at it and I'm like, okay, what can you do right now to start engineering a sale of your business in the future that's at a higher valuation? Those are the things that I'm interested in. It's like, can you, one, it's like, adding subscription's a great way to do that and being creative around that. The other side is, hiring and building an incredible management team that can run the business without you there so that you have a larger valuation. Also, in that time, a better existence when you run your business. Those are interesting.

Austin:

Then on the marketing side of things, yeah, just creating better offers. The reason I was asking you so many questions about creative is, creative is super interesting. It's freaking hard, it's so hard-

Brett:

It is hard.

Austin:

... to do well.

Brett:

It is so hard. Yeah, the offer that you make is super important. How are you enticing that first customer? I love the example you gave of both the energy bar company and the sweater company, super interesting. I think that's another thing too, where again we've gotten spoiled by hyper targeting and algorithms that help us optimize our ads, where maybe just a lame offer does good enough. So we're able to be lazy in our marketing but the machine, so to speak, helps us out. I think that's potentially shifting, so now we got to be really creative with our offers and with our messaging, but it's fun too.

Austin:

It is, it is. What are you thinking about as an agency owner right now? What's on your mind? What's the thing that keep you up at night that people may not think about?

Brett:

That's good. So, I mean it is the privacy topic, definitely is top of mind. I think one of the things that I'm thinking about a lot and this applies to all of E-commerce and certainly agencies, is just how fast things shift. So we have a good part of our agency is based on Amazon. So we run Amazon ads, we do some Amazon consulting and it's exploding, but it's so interesting how quick things shift in the Amazon world. How what people want there and or new software releases, how quickly that can change things.

Brett:

So my thing is just trying to think, trying to think about, what are the elements that are never going to change so we can really be good at those? Then, how can I listen better, pay attention to customers better so that then the things that do change, we can pivot pretty quickly? But one of the things just to give an example, and this may be a little bit boring, but on the Amazon side, it used to be in the past there'd be several people that would come to us and say, "Hey, we need someone to manage the entire Amazon channel for us. We don't want to touch it." There'd be a few of those but there were a lot of people that just said, "Hey, we just need help with ads." Now it seems like a lot of people say, "We don't want to touch Amazon. Could you please just manage all of it?" So that's really shifted recently.

Brett:

So anyway, I think that's it, is just the speed of change and trying to not let that drive you insane. So doubling down on the things you know won't change. Then really getting good at listening and not holding too tightly to anything so that you can pivot quickly. So I know some of that's a little bit general, but that's where my head's at.

Austin:

It's interesting. What about from... I mean, you have a much larger team now than you did four years ago or I think the last three, four years ago when I saw you.

Brett:

Yeah.

Austin:

How have you changed? Yeah, how has your role changed and what do you as a leader think about these days?

Brett:

Yeah, it's so interesting and I love that question. My head is here a lot more than it is other places, even new technology and stuff. It's like, how do I need to show up? How does my role need to shift as CEO, because we've got a great operator, we've got an awesome COO, Sarah Still is her name. She crushes it, in terms of the day to day management of the team and process implementation. I used to be the guy when it came to some employer related things or even some campaign related things. Now it's more about, how am I building my team? How am I regularly meeting with my top specialists and giving them ideas and inspiring them and helping them work through problems? But really helping them become the star. I used to definitely think if a client relationship is going to be successful, I've got to be heavily involved, and I no longer think that.

Brett:

I remember, I was at a client meeting in Denver with a shoe company, you would actually know the owner, but I went because I always go to the client meetings. I was sitting around the table and I had five of my team members there. I realized about 30 minutes in, I was like, I don't even need to be here. Not that I don't want to be, but just couple of the people on my team were just explaining things so well. I'm like, I can just go grab coffee or pizza or something, this is good. So I think it's about, how do I bring out the best in the people around me? That's what I'm thinking about. So how do I cast vision? How do I look ahead and think, where is the industry going, where are agencies going? Then, how do I just bring out the best in my people. It's really fun.

Brett:

I actually got roped into coaching basketball. I can't remember if I mentioned this. I think we've talked about basketball, because I know you're a basketball guy. You blew out your achilles, I remember that. So I got roped into coaching high school basketball, and it was crazy stressful and it was not a good idea when you have a big family and a business and coaching basketball, but it really taught me like, okay, I can't step on the floor to go do something. How do I bring out the best in these people? It was really a trial by fire and I've learned a lot but I think there's a lot of correlations between coaching and being a COO or CEO. It's like, how do I bring out the best in the people? How do I create scenarios where they shine? So yeah, that's where my head is at most of the time right now, so yeah.

Austin:

That's cool, I like that. I had Josh Snow, head of Snow Teeth Whitening on the podcast. He was talking about, he was like, "I want to attract the Lebron James' of business." He's like, "My role is like, I got to make sure that the gym is good enough for them, and that they can come in and work in there. That they won't... maybe it's not perfect but when they show up they're not like, oh man, this is not up to speed."

Brett:

Yep, yep. Yeah, how do we create an environment where the brilliance of our people can shine? I was reading this thing recently where Jeff Bezos, according to the author of this book, it's called Always Day One, and he's talking about how really Bezos worked as a facilitator. Of course, brilliant guy coming up with ideas on his own for sure too, but how do I just facilitate great ideas and make sure the best ideas rise to the top? Do we execute on that, and how might people get unstuck and things like that? But more facilitator is how he operated, which is super interesting.

Brett:

But what about you, man? This is funny because this is a joint podcast. So we get to fire questions ..

Austin:

Yes.

Brett:

How has your role and how's your perspective shifted in recent years?

Austin:

Well, I think the thing that has shifted the most for me has been a shift towards the things that I am really good at, and just trying to get myself into the two things that I'm good at. One which is content, creating content. Then the other side of that is coaching.

Austin:

So there are few things that are really easy for some people, and everyone's got something that's really easy for them and hard for other people. For me, the coaching and being in a workshop or a mastermind and helping people out, that actually gives me energy. I'm really good at it, I could do that all the time. So it's trying to figure out how to put me in a position to be able to be more effective in that space and help the team be effective in their roles that allow me to be in that role. So that's where we're at right now, if I do more content and do more coaching, we continue to grow.

Austin:

The rest of the stuff, it's incredible because I'm trying to attract really the best people that I can to be able to do those things. I'm always thinking about seats. I think that's one of the... there are things about the traction, EOS method that I like and things that I don't like. But one of the things that I really like is the seats, getting people in the right seats and thinking about that all the time and trying to recognize that your business has seats. Don't try to create seats for people, but try to put people in the seats and try to find the right people for the seats that you have. That's really interesting to me.

Austin:

Then the other thing that I realized over the last couple years is, one of the most valuable things that I can do is go and talk to other founders and come up with ideas that way, and spend more time, whether it's in my mastermind group or whether it's going... I went on a six-day backpacking trip with-

Brett:

With other founders?

Austin:

Most of them yeah, were. It wasn't a specifically founder only, but almost everybody there ran a business. I came back and I was like, man, I feel so clear about where we need to go.

Brett:

Were you completely off the grid or were you still checking in and stuff like that?

Austin:

Completely off the grid.

Brett:

Dang.

Austin:

The first night, it was four degrees with wind chill. It was very cold.

Brett:

Wow.

Austin:

It was very cold.

Brett:

You have to have the right gear for that.

Austin:

Yeah, I definitely had a summer sleeping pad so I was rocking an emergency blanket for the first night. It got warmer after that, the first, but it was definitely... I'll look back on that night, it was like, oh man, that's what I remember about the trip for sure.

Brett:

That was dangerously cold, yeah.

Austin:

So yeah, those are the types of things that I've been thinking about is, how do I put myself in a position where I can show up more as myself to attract people who want to be in our company? Who have the same vibe, message, goals and aligning those is really, really the thing that's exciting to me.

Brett:

Yeah, yeah, I love it, man. When you're doing that, when you're executing and doing the things that you're best at, everything just better. Then you create this environment where that's the expectation and other people do the same thing. So it's really cool, man, really cool to hear for sure.

Austin:

It's fun, and it also makes... I think the thing that I've been thinking about more and more is, I mean, it's a long game. So you don't want to burn out and you don't want to... how long have you been running OMG Commerce?

Brett:

Since 2010. So yeah, 11 years. Yeah, which is crazy.

Austin:

11 years.

Brett:

Things have pivoted and changed so dramatically. We were doing local marketing the very beginning, and then pivoted all to E-commerce. So yeah, a lot has changed.

Austin:

In those 11 years though, where has... the last three years, how different were the last three years and the first three years as far as growth, revenue, profits?

Brett:

Oh yeah, the last three years have just been ..

Austin:

It's all compounded.

Brett:

It's all compounded, exactly. It's compounded. Yeah, we made the Inc. 5000 list now three years in a row, and have been growing on that list and stuff. Yeah, it's definitely compounded, but a lot of the decisions and the learnings and the disciplines of those early years helped create that compounding, so.

Austin:

Oh, no, for sure. I mean, that's what it is, you had to put in the time at the beginning and be able to continue to stay in the game long enough so that you can get those compound returns that come later. They come from... the reason that you can hop on, you promote a YouTube event and you have everybody promoting it in our industry is because of 10 years of you being out there going to events, talking to people, people know you, all those different things. So yeah, that's interesting to me, but.

Brett:

It's awesome.

Austin:

Brett, this has been freaking good, man. I like it.

Brett:

Good, dude.

Austin:

It's fun catching up.

Brett:

We talked privacy, we talked creative, we talked subscription. We talked what we were excited... this was good stuff, dude. We could keep going, yeah, that's awesome.

Austin:

Well, let's do a little promo. So if you're listening on my podcast, Brett, why don't you tell them about your podcast?

Brett:

Absolutely.

Austin:

Yeah.

Brett:

Yeah, so E-commerce Evolution is my podcast and I really started it one, because I enjoy being on podcasts. So I thought, well, easiest way to consistently be on a podcast is to host one. I like meeting people and it really gives us an excuse. I mean, guys like you, Austin, where it's hard for us to schedule an hour to sit down and just chat for no reason, but if we're on a podcast. So I learn so much from the podcast, I connect with awesome people, but E-commerce Evolution. What's new, what's next in E-commerce. We talk traffic, we talk conversion rate optimization, it's all interview based. So yeah, if you're not a listener and not a subscriber, what are you doing? You got to check it out.

Austin:

Go check it out.

Brett:

Go check it out.

Austin:

Go check it out for sure.

Brett:

Then for my podcast, yeah, let's hear about-

Austin:

Yeah, if you're listening to this on Brett's podcast, my podcast is called E-commerce Influence. We just hit our 300th episode.

Brett:

One of the first E-commerce podcasts, correct? I mean, it was maybe like you and one other, right?

Austin:

Yes.

Brett:

Yeah.

Austin:

I think it was me and Youderian?

Brett:

I think so.

Austin:

And maybe Steve, but yeah, over 300 episodes. We really focus on, how do you build wealth and how do you live fulfilling life while running an E-commerce business? We have interviews that talk about random stuff, how to grow your business, and that's been my focus is exploring different paths to those things recently. So, check it out, ecommerceinfluence.com. Yeah, Brett, thanks man, this was really fun. We will talk soon here.

Brett:

Thanks, dude. You're a true OG. Thank you, appreciate you.

Episode 159

:

Chris Tyler & Amber Norell - OMG Commerce

Important Tips, Dates and Tactics to Maximize Prime Day 2021

Join me for this week’s episode to break down what we’re expecting for this year’s Prime Day and what you need to do to get ready.

Prime Day is one of the biggest shopping events of the year. We now fully expect Prime Day to land in June of 2021 (at the time of recording this podcast we were still uncertain of whether it would be June or July). OMG’s Amazon Director, Chris Tyler and Amazon Specialist Amber Norell join me for this week’s episode to break down what we’re expecting for this year’s Prime Day and what you need to do to get ready.

If you do nothing as an Amazon seller, you’ll likely see some lift in sales for Prime Day. If you use some of the tactics we discuss in this podcast, you could generate some record sales days for yoru brand. Here’s a look at what we cover in this episode.

Prime Day discounts and coupons - which is usually better and how to structure your offers.
Amazon Live! - a perfect compliment to your Prime Day deals
Lightning Deals
Amazon posts
How to maximize your storefront for Prime Day
Does and don’ts to get your listings ready for Prime Day
Plus more.

Also, read our complete Prime Day Blog here.

‍‍

Mentioned in this episode:

Amazon Sponsored Brands Video

OMG Commerce Blog - Prime Day Prep 2021

Amazon Live

Open Broadcaster Software (OBS)

Amazon DSP

Amazon Sponsored Display Ads

‍

Chris Tyler

Amber Norell

eCommerce Evolution 98 Charles Livingston

‍

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 super excited about today's show. Today, we're diving in deep, to Jeff Bezos's favorite holiday. Yes, this was a holiday all about shopping. You love it, I love it, as Amazon sellers, we love it. We're talking about Prime Day 2021. How do we prepare for it? How do we maximize it? How do we extend the value and the impact from Prime Day to beyond?

Brett:

Today man, I get to bring on some of my team. Some of OMGs very young, some of our best and brightest. And I'm just going to grill them with questions about what we're planning and thinking for our clients, for our brands on Amazon this year. And so I want to first welcome back to the show and I think this is man, this maybe four. Is it? Real quick, Chris, is this the fourth episode you've been on or five?

Chris:

I think it's fourth.

Brett:

I think it's the fourth. That was my thought as well. So Chris Tyler, he is our Amazon director. Tons of experience. He's kind of a PPC mad scientist. A little bit of a savant when it comes to PPC. But also just understands business growth and online marketing and knows the Amazon platform inside and out. And he's becoming a really solid podcast guest as well. And he's got a fun background that he's using right now if you're watching the video. So welcome back to the show, Chris, and how's it going man?

Chris:

Man it's good to be here. Things are going well. Keeping busy but always have time for your podcast.

Brett:

Thanks. I mean, you have to say that. But I also felt like you meant it-

Chris:

I do.

Brett:

So that's all that matters. And then in addition to that, we've got a newcomer. And I just found out this is the first time that this guest has ever appeared on a podcast. And so we're bringing on our Amazon specialist and she heads up our Amazon full service offerings. She's got seven years experience managing brands on Amazon. That's like a lifetime of years working on Amazon. She's very, very bright. She's managed some amazing brands on the Amazon platform. We're just thrilled to have her at OMG. But I want to welcome to the show, Miss Amber Norell. Amber, how's it going?

Amber:

Good. Brett, I'm excited to be here.

Brett:

Yeah. Thanks for taking the time guys. So it's going to be a lot of fun. So we're going to dive in and as we get started, I just want to set the stage. I want to look at Prime Day globally. We all know it's huge. We all know it's the biggest day of the year for Amazon sellers, or biggest few days of the year typically. But just a quick recap. So last year, 2020, odd year obviously because of the pandemic and all the things that transpired there. There was such a huge COVID bump with e-commerce and Amazon had crazy volume all throughout the year that they weren't ready to do Prime Day in July like usual. So for the first year ever, Prime Day was in Q4, Prime Day was in October last year. But it was still a big increase over 2019.

Brett:

So let me just unpack the growth, talk about the growth a little bit over the last couple years of Prime Day. And then I want to get Chris and Amber's perspective on what are we anticipating for this year? What are we expecting? So in 2019, total of about seven billion, 7.19 billion, I believe in total sales on Prime Day. That's when it was in July and this was according to Statista. And that represented about a 70% year over year growth in 2019. Last year again, it was really kind of a kickoff to holiday shopping because it was an October. 10.4 billion in total sales.

Brett:

So nice increase really just a huge, huge couple of days there, but it was a slower growth rate. So it was a 40% year over year growth rate from 2019. So now as we look at 2021. I've got some thoughts here, but curious Chris and Amber, what are you thinking? What are you expecting in terms of year over year growth and total volume? And then just what do you think we can expect? And I'll dig into a couple of specifics in a minute. But just globally, what are you expecting this year for Prime Day?

Amber:

Yeah. I think-

Amber:

... go ahead, Chris.

Chris:

Oh no. You're good, go ahead.

Amber:

So I think similar to any year, we're going to expect to see a normal growth. I think more similarly to 2020, we can expect some curve balls just because of the state that we're still in. Some things popping up, movement of deadlines. But similar to 2019, I think we can expect a more normalized timeline. Where we're not so close to Q4 experiencing really difficult situations with inventory going in and running out of inventory from Prime Day and trying to replenish with replenishment limits. I think that's something that could clear up a little bit this year.

Brett:

Yeah. Awesome. What about you Chris?

Chris:

Yeah. I agree with everything Amber said-

Brett:

Hey, I think that could be the strategy for this show Chris. You could just say," No I totally agree with Amber."

Chris:

You've given away my plan. So now I got to think of something.

Brett:

I tipped your hand.

Chris:

I do think the benefits of this Prime Day is we have months to prepare. There shouldn't be any challenges on Amazon's end. I remember last year clients kept saying, "All right, When is it really? When is the day?" And even references people that we chatted with within Amazon were, "Hey, we don't know or we can't tell you." And it was a few weeks it felt like before and they're like, "Here's Prime Day." But I think as advertisers, there's challenges we face and that even the customer is not really knowing when it was coming out.

Chris:

We're not going to face those headwinds, so I do think it'll be more normalized this year. I do think though on top of that it's going to be hard to follow 2019's 70% growth, right? As these numbers increased, I think you said 10 billion last year. Even 40% is 4 billion which is more than 2020's 40% growth. So I can't say I'd see the 70% because that's 7 billion would be pretty massive, though that'd be fantastic. But I do think it'll be normalized. I do think we have time so as a team on our end and as advertiser being able to prep for that, it's going to be so beneficial.

Brett:

Yeah. I agree with you guys. I think once you get into really huge numbers, which Amazon has been there for a long time. But $10 billion over a couple of days, doubling that or increasing that by 70%, I think it would be really really tricky outside of some crazy outside circumstances. Like a global pandemic, like last year, hopefully we won't be dealing with anything like that this July. But yeah, I think we can say it's going to be bigger than last year. Almost certainly probably a slower growth rate. But lots more opportunity. I think this year for sellers to benefit because of the things you mentioned, because there's not as many inventory concerns and because we do have a clear timeline and so we can execute that and be ready.

Brett:

Any specific things you guys might share on what you're expecting this year in terms of ad spend and... We'll start with ad spend. Any expectations there for this year and what clients might expect with ad spend for Prime Day?

Chris:

Yeah, I think looking at the numbers from 2020 and 2019 there has been an increased use in CPC. Also, the correlation with Prime Day growth, whether it's 40 or 75% does tie into ad spend growing with that. So that's naturally going to happen Amazon would continue these expanding their PVC offering. Some of that pay-to-play mentality comes in. Granted, if you get organic, that's the place to be. So I do think expectations are ad spend will increase at the same rate or even a little more than previous Prime Day periods. And then one specific campaign call out I would say is sponsoring video.

Chris:

That was pretty new last year, kind of the golden era and still performance is great with advertiser we're working with. But CPC and a cost to continue to take up as more and more... I'm trying to skid get into that space. Depending on your goals, your margin, what you're trying to accomplish you definitely want to review and see if you should be pushing or if the numbers just don't line up with maybe the goals you've set in terms of expanding ad spend there.

Brett:

Yeah. It's very similar to Q4 on other platforms as well. So I'm more of a Google guy in terms of my background and my day to day. But when holiday comes search, shopping, CPCs do go up, but conversion rates also go up. So performance is still good. Volume is up. So it's guaranteed, we're going to spend more. And wholeheartedly agree with sponsored brand video is a place to be right now. And even though it's getting more competitive, it's still very powerful and I think should serve us well. And our clients well for Prime day. Anything you would add to that Amber?

Amber:

No. I am totally in agreement with you guys.

Brett:

Cool. And just for those that don't know and I'll show this really quickly. This is what a sponsor brand video ad looks like. It's used to be video and search. I think most people know, but just in case not. It's where you see that video ad in the search results as you're cruising through and looking for products on Amazon. So it's probably my favorite ad unit right now on Amazon because I've always loved video and I used to love the tie in with video and search and it's pretty powerful. So awesome.

Brett:

Let's talk now about our game plan, our plan of attack. So how do we get the most from Prime Day? I think it's clear that most sellers could do nothing and still see a bump. Because there's more shopping, more people on the platform, rising tide raises all ships type of thing. But why would you want to do that? Why not come with a game plan? So you can maximize those couple of days and build some momentum there that you can carry on into the rest of the year and into holiday shopping and things like that. So let's talk about this Amber.

Brett:

As we're looking at planning how we're going to maximize Prime Day talk to me about Prime Exclusive Discounts and Prime Week coupons. Because like holiday shopping people do expect Prime Day deals. And so they're ready to buy, but they don't want to buy a full price that they're looking for deals typically. So what advice would you give around Prime Exclusive Discounts and Prime Week coupons?

Amber:

So I just from experience have noticed that the Prime Exclusive Discounts do tend to create a higher lift. Part of that could be because the minimum for setting those up is higher. You have to offer a minimum of 20% off. But they also have a deal badge that says Prime Week deal exclusive. So it kind of ups that urgency where they feel it's not just a standard coupon, I need to buy now in order to get this discount. I think they're super effective. And if it's something that you can set up you definitely should. Some things to keep in mind is that you do have to have FBA inventory available.

Amber:

Again, that 20% off. And the deadline to submit those are two weeks prior to the event, which we don't know the event dates. So we don't have a firm deadline on that. We're tending to just kind of submit them now, just so they're out of mind. And you can cancel them at any time, but once that deadline hits, you will not be able to set them up at all. So definitely get those in if you're wanting to go that route.

Brett:

Awesome. And we are still thinking July. That we haven't seen any indications it would lean towards a late June or something. We're still thinking sometime in July?

Amber:

Yeah. That's kind of what I'm thinking. Chris.

Chris:

I would think so. It's interesting how many people I've talked to or articles I read and it's like, "Oh, for sure June. Oh, no, it's back to July." So to be safe, I would say definitely summer. And I'd probably look at June, July with July being the higher probability.

Brett:

Yeah. So have all your stuff together. And I know Amber is going to cover some more dates for a few other things, a few other deadlines. And we also have an amazing resource and also blog posts that Amber put together. Thank you, Amber, that we'll link to that has all the dates there. So you can have that as an easy reference. But yeah, just kind of plan on, okay it could be late June into July. And kind of three to four weeks in there just to be safe to prepare there. So I liked that though and considering what's going to create the greatest lift? What has the best perceived value to the customer? What does maybe Amazon favor and then what have we seen as far as results? So you're saying that Prime Exclusive Discount is working a little better than just doing a coupon during Prime Week.

Amber:

Yeah. It tends to work a little better. I mean a coupon is always a great fallback because it will show up on all ad types. So it is still giving that extra incentive. And at least that's something, I think the minimum is 5% for that. So it's if you have products that have tighter margins, that's definitely the way to go. And I've seen standard coupons get submitted during Prime Day and go through. So there's a little more flexibility with the deadline there.

Brett:

That's awesome. Okay. Let's talk about Lightning Deals. And I only have a slight understanding of Lightning Deals. I've seen them obviously. But you guys are the pros on setting these up and maximizing these. What advice would you give around Lightning Deals?

Amber:

Yeah, so Lightning Deals, if you're listening to this podcast, the deadline has already passed you can't opt into them now. But if you were able to slide some through, definitely be keeping an eye on your price prior. You don't want anything off of Amazon at a lower price point that can cause a deal cancellation. Keep an eye on the timelines, because if you get like a really wonky date or it's late into Prime Week, maybe you feel like you want to cancel it. Just knowing that that price to opt into a Lightning Deal is 500 bucks per deal. That would be my main thing is just watch your pricing on Amazon and off don't make any crazy pricing increases. 30 days leading up to Prime Day.

Brett:

Nice. You said 500 bucks per deal. Can you explain that?

Amber:

Yeah. So there is a $500 price to run a deal during Prime Week, normally it's 150, right.

Brett:

Okay. I was thinking some kind of discount or what was something that we're showing the customer and I was confused by that. Okay. Totally makes sense. Let's talk then about Storefront Deal pages. So that's something that we help with at OMG. We help build client storefronts and really help maximize those. I think that that's an important part of managing your brand and growing your brand and really maximizing Amazon as a channel. But talk to me, Amber, about Storefront Deal pages. What are those, how do we get max value out of this?

Amber:

Yeah. So a deal page is super easy to set up. It's just a matter of setting up an additional page on your storefront. There's a module that you can use that's featured deals. You basically just populate any ACE that you plan on running a coupon or a Lightning Deal or anything like that into that module. And it's basically done and you can run traffic to that page. Sponsored brand ads will give us some flexibility to mention Prime Day, so we can... as long as we're canceling it on Prime Day, so that it's ending with the event we'll have-

Brett:

Because you want it to be a true Prime Day deal and not just something we're calling Prime Day deal.

Amber:

Yeah, exactly. So we can run additional ads there and it's really just highlighting anything that's going to have some sort of incentive. The other thing that's really cool about this module is that it's dynamic. So say you're running a deal during Prime Day and then some during Prime Week, it's going to change out according to deals. And very few of the modules on Amazon are dynamic. So that's a pretty cool thing where you're not having to monitor it.

Brett:

That's awesome. Chris Tyler anything you would add on storefronts. So that's something you've been involved with and we've definitely seen an impact and a benefit as we have clients that we help build out their storefront. Anything you'd say to that in general or to deal pages.

Chris:

I would say we just think solid success, even when creating these not during Prime Day. And we have some clients that ran some aggressive deals during their own seasonality. And so I'm excited that this Prime Day what it can do. And as Amber said being able to run sponsored brand campaigns. I can run DSP and we'll talk on that a little bit later. I think we'll just do really well. And then one thing I would add the coupon in an exclusive discount discussion is... One cool thing with those, especially if you're a category in a product that does get repurchased or as a really high margin. Going aggressive with those Prime Day discounts, we have seen much higher improvement in performance compared to the coupons. They both do really well.

Chris:

So being able to plan out that you can tie that to, okay, what's going to be in the storefront. How aggressive do you want to be? One other kind of PBC and DSP do you want to run for that? So just be thinking if you're in that space that 20% steep as a coupon, but could you really well to bring in new customers and previous subscribers to the account and a few other things.

Brett:

Nice. Okay, awesome. So I want to talk about something now that I think well, it would just be interesting to dive into this a little bit. People are getting all excited about Prime Day and we're talking about how do we maximize and get the most from it. And I have a suspicion that there may be some people that are saying, "My listings are not all that well optimized." And Chris Tyler talked about, "Hey, I want my ads to really be performing well and at their peak, but also organic. I wanted to capitalize on organic. So I'm optimizing my listings. Let me see if I can get more organic traffic and optimize those listings." Amber, what would you say to people that are having this internal urge to maximize and tweak their product detail pages and their product listings on Amazon?

Amber:

Don't do this in the weeks leading up to Prime Day. Do this well in advance. So this is something you should be doing now. Look at your search term reports, things that are converting really well for you that are maybe missing from your listing especially your title. Work that in now, because if you experienced a listing suppression or D indexing, you do not want to be dealing with that during the days leading up to Prime Day. Another thing to consider is that A-plus content is now taking up to seven days to review. So if you're considering testing different things in your A-plus content, you don't want to be waiting to get things approved. I mean, it's taken... if you make additional revisions, it's taken three weeks in some instances for changes to go through for us. That's crazy right now. So be doing that now and-

Brett:

Now as in the time we're recording. Probably by the time you're listening, the answers just don't do it until after-

Chris:

It's too late.

Amber:

But yeah, another thing that you can definitely leverage, is experiments under brand features in seller central. So if you want to really prove that what you're doing is working. Do some AB tests with the title of the A plus content, the main images, so that it's serving two different options through that tool. And you can really weigh that out and go with the best option during Prime Day.

Brett:

Awesome. Anything you would add to that, Chris?

Chris:

No, I agree with Amber.

Brett:

Game plan is in action.

Chris:

Yeah.

Brett:

Yes, I agree with Amber. Very smart. I like it. Okay, good. That's brilliant. Okay. So let's talk about Amazon Posts. And this is something that they could be new concepts, at least some people listening. But what are Amazon Posts? How do we utilize them for Prime Day?

Amber:

Yeah. So for Amazon Post it's something that should definitely, I feel be implemented because it's driving free clicks. I mean where are you going to get free traffic on Amazon other than that. We don't have the ability to see what's actually converting, which is kind of a bummer. But we can see the clicks now, which is great. You can easily repurpose anything you're using on social. So it's very low effort to do that. And kind of breaking news this week, we've spotted that posts are automatically populating on Amazon Storefront as a page. So if you're running ads to your Storefront, your posts are going to be showing up there. It's also something that you can use to kind of promote a Lightning Deal. So you can schedule it at the same timeframe or right ahead of a Lightning Deal that you know is going to run.

Brett:

And how do you, for those that are unfamiliar with that don't know. How do posts drive organic traffic? And Chris you want to talk about this one because I know you've done quite a bit with posts, maybe not as much for Prime Day, but in general.

Chris:

Sure. Yeah. So placement for posts are mobile, the product pages, young brands pages, competitor pages, and the past few months, it actually also came out that it could show on the bottom of search results, which is pretty awesome. So it's not just relegated to specific pages. And then brands have their own feed that customers can follow the brand and be able to see what posts come out. And we actually have a couple of brands with several thousand followers, which I think is pretty awesome. And I think that Amazon has a focused on brand presence and building that whole brand equity. That posts what they're doing with Storefront are going to be more and more important.

Chris:

And so I think you mentioned it at the beginning of the post section, you're saying some people might not know this. And it's a pleasant surprise to a certain extent because we're able to tell them. But there's an audits we do that on thing, "Hey, what about Amazon Post? You're running that." And they're like, what? So I think that that value alone, if you're not running it, just setting it up, reviewing what it does, what you can put out there and then putting the game plan. We're kind of saying in place can do a lot of good for free essentially.

Brett:

Yeah. And not a huge amount of effort either, right? I mean you want to be strategic. You want to think it through, but it's not a mountain of work and then there's no cost other than creating the content and-

Chris:

You've got the one image and you can put up the 10 ACE and that used to be just one ACE. Now you can put a child variations in there. And I think it's up to 2000 characters, though we usually recommended a paragraph or so. People aren't really going to read a whole novel within that. And at least at the time of this recording, they're not indexing by the keywords and characters you put in that content. They do auto kind of categorize what your product is. And so your posts can go into whatever station or categories in. So I would just be more attention grabbing and clearly stating what the product is or what it does. Lifestyle images do best. Don't do the white background images and try to improve click rate. Think kind of that social proof mentality.

Brett:

Love it. Let's talk about another concept that I just think is awesome. And I've always enjoyed infomercials. I like a good sales pitch. This is fun for me I guess I'm little bit weird that way, but let's talk about Amazon Live. So Amber, what is Amazon Live? How can we use it for Prime Day?

Amber:

So Amazon Live is an option where you can live stream depending on whether or not you're using a brand account or you have an influencer doing this for you. It'll show up in various places. Main places, the Amazon Live hub. Also if you have a brand account or a seasoned influencer account it'll actually show up on the detail page. My thoughts on Amazon Live are, we're getting a boost in traffic on Prime Day. It gives you a rare opportunity to really like engage with customers real time. It can be really impactful to showcase products that have Lightning Deals and answer questions while it's happening. From what I have seen it converts really well on Prime Day. Click through rate is great on Amazon Live videos and you can get a huge burst of views and traffic. So I think if you have someone in place that has that experience and is familiar with OBS, it's super easy and it's a no brainer to definitely tap into that during Prime Day.

Brett:

Sorry, what was that acronym you just used?

Amber:

OBS.

Brett:

Which is what? Sorry.

Amber:

It's a streamer software that you use-

Brett:

Got it. Got it. Okay. Okay. And yeah, I mean people love QVC and they love to see... even though there's like a little bit of cheesiness to those things sometimes. People like to see a product live in action and see people demoing it and talking about it and stuff like that. It just ties in really well to retail is a hobby for some people. There's shopping therapy that goes on and we like to watch and see demos and explanations. So definitely tap into Amazon Live if you can. Let's talk about ad budgets. So we already talked about this a little bit and you know what some expectations are there.

Brett:

But let's maybe put some parameters around that just a little bit and create some expectations of, okay we're expecting this huge lift in overall traffic, in lifting competition, more advertisers jumping into the fray and bidding on keywords or increasing their bids on keywords. So I'll pose this to you first, Chris and then Amber, I want to hear your perspective too? How are you advising clients to adjust or look at their... prepare their ad budgets for Prime Day?

Chris:

Yeah, great question. For specific answers, we always like to go client by client and be able to get their own data. But high level, the things we're looking at is what are the trends for the past couple of years of Prime Days? We know there's anomalies with last year. But we don't want to say that that is worthless. So just seeing what happened then, what were some wins or some challenges or what were things that are available now that weren't then that they should be using and if they are using should be pushed and then breaking down and probably carry it into the lead up. The two days of the run of Prime Day and then the follow-up because I did mention earlier, you normally see a 10% plus increase in sales post Prime Day. So we want to prep for that, we want to capitalize on that-

Brett:

And post Prime day. How long is that post Prime Day window typically? And again, obviously it's different for every client, but how long does that 10% average bump last after Prime Day?

Chris:

I would say for most clients that actually kind of starts that next level of growth for some that are seasonality based it's about two weeks, and then we'll kind of settle into wherever their numbers should be. But we found as we get more aggressive kind of post Prime Day with DSP, coupons, PBC that that kind of pushes the next quarter, at least in our view to be a bit stronger. Obviously I said fits the KPIs the clients are going after but I would look the two weeks after, but you use that as kind of a jumping board for the next few months.

Brett:

So maybe that just unlocks a new level of growth Prime Day kind of unlocks that. And now we can accelerate growth just a little bit afterwards.

Chris:

Yeah. We've seen success with that. I also think that obviously you have your client and for us we work on this with our clients. We want to know what the strategy is all the time. What are you going for? Is that eight cross tacos growth or next year? And it always is a combination. But determining what it is that you, as an advertiser want to be seeing during Prime Day, some clients just want to do that. "Hey, I'm just going to rise with the tide." Others want to own the space for products or keywords, or just capitalize on sales with some coupons and deals. So I think high level figuring that out is even talk any kind of budgets. And then based on deals, coupons, promotions you're running go product level to figure out, okay where should a budget be spent during the lead up, during an after, but at the product level, because if you're running a deal on 10% of your products, those need to have some focus and not just one size fits all.

Brett:

Awesome. Amber, anything you would add to that or did Chris do a good job? Or do you want to like, make him feel good just say, "I agree with that."

Chris:

Or did I do a bad job?

Brett:

Really kind of you Amber to help Chris out like that? I agree with Chris as well. Okay, good. So let's let's move on then. I want to talk about DSP and typically if I'm invited to speak at a YouTube event or I'm sorry... Tell where, what I usually talk about is YouTube. I get invited to speak at an Amazon event or Amazon podcast I'm usually talking about DSP. I love it. It's fascinating to me. So just a quick explanation of what DSP is, and then I want to dive in. And I want to hear from both of you on why you view DSP as a bit of a secret weapon for Amazon sellers for Prime Day? And not the DSP itself is a secrets so much anymore.

Brett:

I think a lot of people are talking about it. But it could be a secret weapon for Prime Day. So DSP for those that don't know stands for Demand Side Platform. It's really just a way to target shoppers on Amazon, off Amazon, but based on their Amazon shopping behavior. So you can run ads that appear on news sites or blog sites or things like IMDb or other Amazon owned properties, or just across the web, even like kind of through a back door of the Google display network. You can run ads to people, display ads based on what they're doing on Amazon. So it could be remarketing ads, people that have viewed your ACEs on the Amazon, they didn't buy. Now you can hit them up with an ad on potentially espn.com or something like that and get them to come back.

Brett:

So there's all kinds of opportunities with Amazon DSP. I think it's still not a fully understood platform conceptually, yet people understand it. But how to maximize it people don't typically understand that. So I'll kind of to both. I don't know who wants to start. But why do you DSP is kind of a secret weapon and how should sellers approach DSP for Prime Day?

Chris:

Yeah, I can-

Amber:

I agree with Chris. Take it away.

Chris:

I was going to say whatever Amber says.

Brett:

This is super productive guys. Thanks.

Chris:

Yeah. So as you mentioned DSP isn't as secret anymore. There are more advertisers that are leaning into it. But I would say the secret weapon part is that full funnel approach. The lowest hanging fruit is retargeting, repurchasing and cross promotion, things like that. And those should always be run on one benefit obviously during Prime Days, you're going to have an increased traffics when you want to kind of lean into that and make sure you have the budget for it. But the difficult part is-

Brett:

Marketing audiences will suddenly balloons, a lot more people to target on your remarketing lists and then cross promotion, repeat purchase stuff, or just true remarketing that there's going to be huge opportunities for that. So yeah, awesome.

Chris:

Right. Yeah. And that's naturally going to happen, but the hiring the funnel aspect says you can push that more leading up to Prime Day, that you can have that competitive advantage that maybe your other competitors aren't leaning into. And so that's competitor targeting, so targeting people that your competitors and not purchase their products or yours, in-market people that are in market for the category you're in. And there's a few others with different placements, but it's kind of that just throughout. And one of the strategies we run is kind of the two weeks prior, we start to ramp up that targeting. You want to feed the funnel. You want to be able to during Prime Day period and onwards, be able to retarget to those. And one of the benefits of that, especially if you're running a deal, any type of promotion that does show in the ad copy, when you're running a dynamic eCommerce ad, which is just the way of saying the creative you build within DSP.

Chris:

And you can kind of push awareness for that product leading up to Prime Day. And then as you run those deals get really aggressive on the retargeting and the competitor targeting. If you're running on Prime Day exclusive discount of 20% and your competitors not being able to target people that viewed those competitors and have not purchased yet with your 20% off Prime Day badge is such a unique way to steal sales. I don't think there's other platforms that do it quite this way. So I think there's kind of a secret kind of approach there. And one of the things we also say is going back to that two weeks after Prime Day when we are going to see a lift.

Chris:

We found really good success, even putting like a 5% coupon, 10% coupon and running that retargeting still for people that need your product, even during Prime Day period, when you have that influx and it's not purchased we also normally add in purchases competitors as exclusions. Because someone could obviously look at your product during Prime Day buy another, hopefully not. Probably doing everything we said, that's not going to happen. But the ability to kind of extend that audience targeting that influx with DSP and coupons does fulfill that beginning to end approach through our strategy and adds another layer that I think not as many advertisers are using as I thought. And so I think it's a secret weapon.

Brett:

Yeah. For sure. Amber anything you want to add to it DSP?

Amber:

Nope. I think that was pretty well put together. Chris, did you want to talk on the dynamic ads and that as an alternative maybe?

Chris:

Yes. A great thought Amber. So sponsored display is DSP lite lite lite. With DSP you can manipulate where the ads are off and on Amazon device types, timelines, ACE and things like that. But sponsored display is enhancing and improving what it offers. And recently a new update came out where they-

Brett:

And maybe just to clarify that just really quickly, Chris. So Amazon DSP is a separate platform, separate program. It has minimums. You have to sign up for it. There's some, there's some hoops you got to jump through to get that going, or an agency can help you. But the benefit is you have all kinds of controls, all kinds of control on who you target and who you exclude and where you show up and all kinds of stuff. But then there's also sponsored display, which you call it the lite lite lite version, which I would agree with you. Easier to set up, easier to get going.But yeah, so let's talk about the differences there a little bit.

Chris:

Yeah. And that's available within seller or vendor. So it's something that anyone can access and then the benefit there is the accessibility to it. But up until now it's been very limited in what you can target. Amazon rolled out an update where now you can go after in-market, life events, lifestyle and interests. And this is really new. We're testing it. Don't have the results maybe at the time of this publishing we'll have maybe some stats we can add. But the benefits of this is there's no minimums with DSP you need 5,000 unique visitors for your audience and you can combine the ACE, but for advertisers that have new products or maybe products that just don't meet that threshold, which like everyone has, I think running these type of campaigns helps kind of give you the potential on that lite version, but still meaningful in general. But leading up to Prime Day and using a similar strategy in a condensed version I think can do well.So I recommend everyone kind of looking at sponsored display, getting familiarized with this new update because I do think it will be impactful.

Brett:

That's awesome. Really good. So before we kind of talk about maybe a couple of dates to remember, although we'll mainly keep that focus in our blog posts that Amber wrote just because that'll be an easier reference. I want to just kind of step back a minute and think what broad general Prime Day recommendations do we have? Anything we missed? Anything that you would add as we look to kind of wrap up here?

Amber:

Yeah. I think just going back to making sure everything's really aligned make sure that you don't have coupon overlaps. So if you have a deal going, you don't have coupons scheduled or you're monitoring that and canceling them and restarting them after the deal closes. Because you definitely don't want to stack coupons unless that's your intention. Just making sure that your budgets and what you're monitoring and PPC is aligned with your deals. So if you have a Lightning Deal going and you have a high budget auto campaign, you don't want it that to just go through the roof again unless that's your intention. So I think it's really just keeping an eye on everything holistically. Again, off Amazon pricing is huge, make sure everything is stable for L30, leading up to Prime Day.

Brett:

And when you say off Amazon pricing, mainly what you mean is you don't want there to be a lower price off Amazon leading up to Prime Day or during Prime Day that will hurt you significantly.

Amber:

And don't make... I would recommend if you can, if you're going to increase pricing on Amazon, do it incrementally and do it before the 30 days leading up to Prime Day, don't start making changes during that month leading up.

Brett:

Great advice, Chris, anything in general from you?

Chris:

Yeah. So taking that same thought of stability on the PPC side. I think thinking of what type of campaign you're going to want to be running during Prime Day and for what products and having those have data prior to Prime Day is key. Don't think, to build all these campaigns the week of Prime Day and just push them. You want to have somebody throw up a significance within Amazon, get the data and be able to have an efficient KPI, whatever that may be for you. And things that stand out are two months of display like we talked on, I would start testing that ASAP. So you have a month or two of data. So you know, what's working, you know where to push. And then sponsoring video, even though more advertisers are using it. There's still a huge amount of growth potential to kind of scale to more products.

Chris:

And I think that's one where if you're going to do that, do it a month or two prior, so that you can kind of leading up to it, get data, tweak it. Because the idea with Prime Day is you're going to lift budgets and push what you know, will work ideally. Instead of saying, "Hey, here's new campaigns." And let's find a lot and hopefully get the desired outcomes. So I think prep work so that you're stable during Prime Day is key.

Brett:

Yeah. So this has been brilliant. Thank you guys so much. I love the idea though, of thinking about this and being strategic, regardless of what your product is, regardless of your category, maybe Prime Day historically has been pretty good for you. Maybe it's been gigantic for you. I think just getting the most you can out of it. How do we leverage it so that those couple of days are huge? But so that we leverage that for growth beyond that. And that takes some planning and some prep and then some strategy. So maybe just a couple of dates to keep in mind. Amber, and then we'll mainly link to our resource. But any really important dates you want to point out?

Amber:

Yeah, I would just keep an eye on inventory shipments. That'll be in the blog post, but just depending on different regions and where you're selling, make sure that you're getting your inventory in and plenty of inventory in well in advance.

Brett:

Awesome. Sounds good. All right guys, fantastic man. You crushed it. It's going to happen again. I'm going to have to invite Chris back for the fifth time and Amber for sure inviting you back for a second go around here very soon. So thanks guys. Thanks for taking the time. Even though I didn't really give you an option, but I do appreciate-

Chris:

This was exciting.

Brett:

And you guys yes-

Chris:

Thanks for having us. Yeah.

Brett:

Awesome. And as always, really appreciate you as well. So we'd love your feedback. What would you like to hear more of on the show? And if you haven't already, leave us that review on iTunes, let us know what you think about the show. It helps other people discover the podcast and hopefully get some good stuff out of it. And hey, if you know other Amazon sellers that could benefit from this podcast, share it with them and love to connect with you on the socials as well. And so with that until next time, thank you for listening.

Episode 158

:

Matt Clark - Life Boost Coffee

Scaling eCommerce Sales from $17k to $2 Million Per Month with Matt Clark from Lifeboost Coffee

Matt Clark knows what it takes to scale a business.

Matt Clark knows what it takes to scale a business. He’s the CEO of Amazing.com the creator of the most successful information product of all time - Amazing Selling Machines.

He’s also the co-owner of Lifeboost, a company that he and his business partner Charles Livingston have grown from just $17k per month in sales to over $2 million in monthly sales in just a few short years. So that begs the question - How did they do it? That’s what we dive into in this episode. We discuss their keys to scale both from a marketing and a product development standpoint. Here’s a snapshot of what we cover:

- How focusing on the hook, headline and offer in their ads allowed them to scale from a few thousand in spend to over $400,000 in monthly Facebook spend.

- Their simple approach to testing and optimizing that doesn’t require any fancy software or split testing tools.

- How they are building their business to sell to the right investors

- How they forecast and measure to make sure they are constantly improving and hitting targets

- Mistakes they made while expanding their product line and their new approach to developing products

- How to better listen to customers

- More!

‍

Mentioned in this episode:

BOOM by Cindy Joseph

eCommerce Evolution 96 Matt Clark

SellerCon

Facebook Ad Library: Lifeboost Coffee

‍

Amazing Selling Machines

Lifeboost Coffee

‍

Episode Transcript:

Brett:

Hello and welcome to another edition of the eCommerce Evolution podcast. Today is going to be an amazing episode. We have a returning guest and this guy is the man. He probably needs no introduction.

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 e-commerce operators like Native Deodorant founder Moiz Ali, Movement 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 crush it culture plugging our industry.

Brett:

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Brett:

Matt Clark is joining me and he is the CEO of Amazing.com, creator of Amazing Selling Machines. And there's also the co-owner of Lifeboost Coffee. And so this is going to be a merchant story. We're going to dig in, see behind the scenes of how Matt and his business partner, Charles have scaled Lifeboost Coffee. It's an amazing stories, it's amazing product, and they do some really, really cool things. And so we're going to dive into that.

Brett:

But with that intro, Matt, welcome to the show, man. And thanks for coming on. Appreciate you taking the time.

Matt:

Hey, what's up Brett? Thanks for having me on again, excited to be here.

Brett:

This is round two on the podcast. And the first time you were on, we went meta or something, like we were talking about making better decisions. That was a really fun podcast. Today, we'll do maybe a little bit of that, but also going to get pretty tactical and practical as well, which will be really fun also. Do you want to share maybe just the brief origin story of Lifeboosts like how did it come to be? How did you and Charles start working together?

Brett:

Were you like workout buddies? You're both very buss and very fit. How did that all come to be?

Matt:

Charles started in Lifeboost, it was like a side project, I think back in like 2015. This was before he and I started working together maybe 2016 or so. I didn't even know he had it going on. And so he and I met because we were doing our big events for Amazing and Amazing Selling Machine. And I saw him, somebody told me he was sitting in the audience and I was familiar with him because he used to have the number one product, him and his business partners on ClickBank called Fat Loss back there.

Matt:

When I was first getting started in like internet marketing stuff, I was trying so many different businesses trying to get something to work. And I tried a few like info products, like a muscle building one, a weight loss one. And basically I was just ripping his stuff off, not the content, but the whole marketing for -

Brett:

Like his style, his approach type of thing.

Matt:

Yeah. I was like, "Okay, long form sales letter, cool videos." I was like all this kind of stuff. That's how I was familiar with who he was. And then, yeah, long story short, went and did a whole thing with amazing and e-commerce and everything like that and found my path there. But then yeah, he was looking for another business to do, and so he bought our course and he was in the audience. And then he and I hitted off a lot of similar interests. I did some work with them off and on for a while.

Matt:

And then I think it was 2000, I guess it had to have been like 2018-ish, I started having some more time because we'd grown Amazing so much. And I was like, "Okay." Because I went from doing only e-commerce to teaching e-commerce to being like, "I've been teaching e-commerce so long, can I still actually do it myself?" I was looking for something to do in that space because I finally had some free time again.

Matt:

I started getting really into healthy coffee and then was reading all of Dave Asprey's stuff and going into all the coffee shops. Yeah. And then I found out he had this business there that was selling the same exact kind of product. And I was like, "Okay, this could be cool." And so I was looking at his numbers because he wasn't really doing much with it, because he was just busy on doing other things.

Matt:

And then I found out though, people just kept rebuying, and rebuying, and rebuying, and rebuying. And I was like, "Okay, there's something really to this product, I love the product-

Brett:

The science of a great product.

Matt:

Yeah, for sure. It's amazing coffee, but when we first started working together in beginning of 2019, it was only doing like 16, 17 grand a month at that point. That's how we got started.

Brett:

Which is amazing. And so, to get the intermediate story, I did interview Charles Livingston, he was on the podcast for episode 98, so I'll link to that in the show notes, go back and listen to that from Charles' perspective. And he shared some great insights, but what's crazy is even since that episode, you guys have scaled even more, just amazing growth. And if anybody's watching the video, can see you get the Inc 500 plaque behind and you guys are rising in the ranks there on the Inc 500 list, which is awesome.

Brett:

But now let me make sure I have this right, just doing like two million a month in revenue, so from 17,000 a month to two million a month in just a few years, that's pretty insane.

Matt:

Yeah. I think after about the first year, so we started 2019, beginning of 2019, started scaling it. By the end of that year, we were doing about a million a month. And then we're right here at the beginning of 2021, but basically another year later, so two years total, yeah, we've gotten to about two million a month right now.

Brett:

That's insane. And so I wanted to look at this from a few different perspectives. We're going to talk about keys to scale from a marketing perspective and the way you guys approach your marketing efforts and how you scale those. I also want to talk about product because you guys have done a good job of adding to your product line and getting people to buy more. And of course, it is a consumable, so that's nice to, get people on automatic reorder and it's an awesome product.

Brett:

But you've also had some mistakes along the way with the products that you've shared with me, so I want to dive into those. But before we do that, you mentioned something before we hit record that I thought was really interesting. And I think this is a great place to start the conversation. But you talked about how you believe one of the keys to your success, that you and Charles have had is your ability to forecast.

Brett:

And your ability to look at the business, create this forecast and set these expectations for you thought you could do and then compare and measure along the way of what you were actually doing. And then being able to know, hey, should we do more of this, less of this, and that type of thing. So do you want to explain that a little bit and what that process looks like?

Matt:

Yeah. I actually got this from a coach of mine and his kind of story is he took a company public in his late 20s and went on a whole self-development journey after there. But he ended up teaching the model on the finance side that's worked amazingly. It's basically just like a 12-month rolling forecast. And so you have a few targets for the year. It's like, okay, we think we want to do 20 million in revenue, 10 million in gross profit, two million in net profit, for example.

Matt:

Like a high level forecast for the year and then you break it up by month. And so like for the month we could say, "Okay, January, we think we're going to do this, February, March and so forth for the rest of the year." And then when January comes, okay, you're doing your thing, you're growing your business, you're producing sales. And then by the time February is there, you compare that to, okay, what did we think we're going to do in January versus what did we actually do?

Matt:

So then you're able to reality check yourself and see how far you're off. When we first start doing this, you're going to be pretty far off, most likely, unless you've already got all your numbers dialed in. And then you do the same process again for the rest of the year. Update those numbers, another month comes comparing to what you thought you were going to do. To me, this system is like a perfect compliment to somebody who's very marketing-focused, which is me.

Matt:

And maybe a lot of people that are listening to this, you love doing the marketing stuff. You love figuring it out, selling stuff online. But if you don't sit there and try to forecast what you think is going to happen versus what actually happens, then I feel like it's really easy to start lying to yourself and diluting yourself, which ties back to the more decision-making podcasts we did. But I think it's a great compliment to direct marketing.

Matt:

And so rather than just doing a bunch of stuff and being like, "Well, maybe these numbers are kind of good or I think they're okay." It's like before you even start, you have an expectation of what good is going to look like. Write that stuff down, even if you only do it for one month. Write what you think is going to happen, do all the stuff you're going to do, and then compare what actually happened to what you thought was going to happen.

Matt:

You're going to get a lot smarter, a lot better at forecasting and allows you to plan expenses and cost of goods sold and all that kind of stuff. Because maybe you produce good sales, but maybe your gross profit was way lower than what you thought it was going to be. And it could be nothing sales-related. Maybe you spent too much on ads, maybe your supplier overbilled you.

Matt:

But if you don't have that kind of forecast in place, I find it's real easy to not be able to sort that stuff out when you're just like in the weeds. And we've done it with Amazing also. At one point we were paying affiliates 50% commission, and we're like, "Okay, if we keep paying them this amount for the whole year, it's going to cost us however many millions of dollars." We're like, "That's a lot of money. What happens if we reduce this to 40%?"

Matt:

And so we did, and then didn't lose any affiliates, and all of a sudden we made way more money. But without extrapolating that out for a full year, it's like we would've never had that clarity because we'd been doing this for years, and years, and years, and years, but you're just in the weeds sorting problems out. And so we did the same thing with Lifeboost and I think it allowed us to be a lot smarter with our decisions in terms of how much to spend on ads, how much to focus on recurring sales. When does it make sense to try to reduce cost of goods sold, all that sort of thing.

Brett:

I love that. And yeah, it's interesting how you find areas, and then to use that example from Amazing where you can reduce something by 10 points, or maybe it's only a couple of points or five points or whatever. That can sometimes double your profits. It can double your total profits, and so looking for those little things. But you're right, we did this on the agency side as well where we've got specific targets we want to hit for our net income.

Brett:

And then if we don't hit those expectations and you want to look at why. So I love that process because if you don't have an expectation of the goal upfront, then you'd be very tempted to say, "Well, this could have been worse. This was probably good." Right? Or maybe it wasn't.

Brett:

Any tips on how to go through that process? Like where do you come up with some of these numbers? And I know we could get too complex, I want to keep it as simple as we can. But where do you come up with some of these numbers? Are you just pulling them out of the air? Are you basing it on previous businesses? Where are you coming up with these baselines?

Matt:

Yeah. I think it's like the less experience you are in this specific business, it's the more you're kind of just guessing. For Lifeboost, for example, the business was only doing 17 grand a month at the beginning of 2019. We put together a full 12-month forecast for that business. It got to be like a few months in and we were so far above that forecast, the original forecast, but that's the point of like re forecasting. You've got your annual targets and we're like, "Okay, we're going to blow through these."

Matt:

Great. But now that we have more real data, say, we originally thought we were only going to be doing 50 grand a month and say, it was by I don't know, halfway through the year. But instead we're doing like 200 grand a month in sales. Is that great, pat ourselves on the back? Awesome. But now that we have this information, what do we think we're going to do next month? We're not going to do 50 grand a month in sales, but are we going to do 300, we're going to do 400.

Matt:

What our cost of goods sold going to be? What is the resulting gross profit and net profit? And then allows us to sort out any surprises like, "Hey, what the heck is this operating expense that popped up that's like an extra $1,000?" Without that kind of forecast, we're just tiering throughout the year, but then we're missing all kinds of opportunities to be more efficient financially.

Matt:

And so I think at first it's going to be pretty much a guess, and you may end up completely overshooting your annual numbers, but each month you should get smarter, and smarter, and smarter, and smarter. And so you're really dialing it in. Our sales can fluctuate because there's... Especially last year with all the craziness going on in the world-

Brett:

Sure.

Matt:

... and politically and all that kind of stuff. And with a lot of our acquisition being from Facebook ads, it's very volatile because of all that stuff going on. But we're still in general fairly accurate, I would say on the revenue side, plus or minus like 15%, and then on the profit side-

Brett:

Awesome.

Matt:

... it's like we're definitely digging into stuff far by more than like 25% on net profit after everything than what we expected to be.

Brett:

Totally makes sense. Awesome. That's super helpful stuff. Let's dig into the marketing side of things because you guys are fantastic at this. But what are some of the keys to success, what you've identified as keys to success that has enabled you guys to scale with your marketing efforts?

Matt:

I think the first one is picking your battles. I don't claim to be a great person on social media, or even SEO, or any of that kind of stuff. It's like my main tool is direct marketing and the best way to do it now, I think for most businesses is going to be through Facebook ads. And so we pick that channel, and then at first I was running all the ads myself and we kind of had a process that we ran through that I think is very replicable.

Matt:

It's a bit of work, but I think will work for just about anybody if they're willing to put in the time and effort. The first step is to think about like what is the main hook? And I hate to use that word because it sounds... people have a hard time understanding what that even means in marketing. It took me probably like eight years of doing marketing before I really wrap my head around it. But in general-

Brett:

It sounds like a really simple concept, but it's not that easy to execute. It's almost like landing on a good tagline or something. A tagline is only eight words, but yeah, it could take you like years to really get a good tagline.

Matt:

Yeah. So to me, a hook in general is like, what is that thing that's going to grab people that stands out that's going to make them want to buy? And you may have a lot of ideas for the general angle for that in your business because a lot of times we just assume, and then we run with it. And so for us, it was like, okay, is it that most coffee is toxic and this one's not. That's a potential angle.

Matt:

We donate a portion of profits to an environmental organization so it's like is it the environmental angle? We try to make it the healthiest coffee possible, and so is it that angle? A lot of people have stomach pain and then this coffee helps them drink it, so is it like a stomach pain or acid reflux angle? So we had these guesses, and I cannot remember who guessed what, but it's like, okay, these are the general things that we think is going to get people to buy.

Matt:

And then we basically put those into headlines, essentially. Headlines and a leading paragraph on the sales page and didn't change anything else on the page. And we used a very direct marketing typical long form sales page. Still to this day, that's our main acquisition funnel. But all we did was change the headline and maybe the first paragraph or so, and to tie into the headline.

Matt:

And so we threw these angles against the wall, had one ad for each that tied in, so there wasn't a big disconnect between the ad and where they hit on the page. And then we started testing. That was the first thing that we tested was like, okay, what's the main angle that's going to grab people? So we figured that out. And then the next thing we tested was like, okay, a big thing in direct marketing is the headline can dramatically improve or hurt your performance.

Matt:

And so we're like, "Okay, we got the general angle, what are like 10 different headlines that fit that angle?" And so then we tested that next. Once again, didn't change anything else on the page. And so then once we figured those two pieces out, the next major thing we tested was the offer. And so the typical direct marketing from supplement funnels all the way back in the day was like a one, three, six. So you can buy one model at this price, three models at this price or six models at this price.

Matt:

We replicated the same thing, one bag, three bags, six bags. And then we tested a ton of different variations. Like what if we give people the same discount on all of them? What if we give people escalating discounts is what you would expect? What if we frame the discounts and dollar amounts versus percentage amounts? What if we did a two, four, eight, what if we did a bunch of different combinations?

Matt:

And what ended up working our best for us was just, they didn't have to buy three or six. We don't even have a one bag option on there-

Brett:

Nice. Nice.

Matt:

... because shipping costs just kind of kills you. So we do three or six and we give them a 50% discount versus retail price. And so it's a huge discount, we frame it basically as like a first-time customer discount, but they have to buy three or six, then we do all kinds of order bumps and upsells and that kind of thing after. And so once we really dialed in the main angle, the headline, the offer, that's when we were able to scale this thing extremely quickly.

Matt:

So I was running all the Facebook ads at first for the first few months, but I had a friend of mine who his main expertise is taking you from like 100 grand a month in spend to like 500 grand a month in spend, plus he's good at the scaling piece. But he's very honest like, "Look, I'm just going to be costing you a bunch of money if I'm trying to get you from nothing to like picking up traction."

Matt:

And so he was working with me behind the scenes because I had run way more Facebook ads and stuff for like an information marketing business at Amazing than I ever had with e-commerce. That was years ago and I used different channels and very big on Amazon, but it's different than that sort of channel. So he was mentoring me a little bit behind the scenes on the e-commerce side.

Matt:

And then as soon as we picked up the right numbers, handed it off him and he's been scaling it ever since. He basically scaled it from like when we were like maybe 30, 40 grand a month in spend and now we spend 400 plus $1,000 a month on Facebook ads.

Brett:

It's amazing. I wanted to get into a few things, and then first of all, that was awesome, and I love the breakdown of the hook, the headline, the offer. What's interesting, when you laid out in the beginning, these like all the potential feature/benefits, right?

Matt:

Yeah.

Brett:

It's free trade, it's low acidity, it's clean, it doesn't have all these pesticides and stuff, but what's really going to resonate. And so one of the things I think is pretty easy for entrepreneurs is that step, here's all the benefits. But then what is going to be the hook? What do we lead with? That's the really tricky part. And so a way we frame it as we're building YouTube ads, we call it the supporting cast versus the golden thread.

Brett:

All those benefits, hey, free trade and we donate 1% for the planet and stuff like that. That's probably your supporting cast. Those are nice things that once someone is really hooked and interested, it's like, oh wow, this is the great company, of course, I want to buy. But those are not the main thing. I'm just curious, were there some surprises along the way? Were you surprised by what hook and/or headline actually landed?

Matt:

The environmental thing just completely bombed. It's like as much as people say, they want to feel good about the products they buy and stuff. That's not been our experience for this product anyways. We have like-

Brett:

What's the worst thing about that is, I think people... Obviously, nobody wants to hurt the planet, but we still buy for selfish reasons. Maybe I don't buy if I know a company is really harmful to the planet, but that's not the main reason people buy.

Matt:

Yeah. But we do use it as you call it a supporting cast, we have all those things on there somewhere. Because it's like, okay, if there's just one person who's sitting there, that's like, hey, they also support the environment. Okay, I'm in. After everything, then it's totally worth it. One thing that has surprised me is like, we've run so many different headline tests and we have not been able to beat one of the original headlines that I came up with for the ad, which is like coffee almost as alkaline as water.

Matt:

Within Facebook, if your headlines too long, then it gets truncated and you can't really read it. And so it's what kind of punchy headline, I think really stands out. We've tested so many things that have not been able to beat that. Also on the creative side, what tends to work best for us is almost like this really delicious looking little video clips of like a piece of cake getting cut out of all thing.

Matt:

But one of our first early ads that just crushed, it was literally just a piece of chocolate cake being cut with a fork, and it just grabs people's attention and it clicked on it-

Brett:

And there was like coffee next to it or something, right?

Matt:

No, no.

Brett:

No, just the cake?

Matt:

Just really a very close up image of like a piece of tape getting cut. And so we run a bunch of different ads like that. And then we've run more typical like before and after ones of somebody who was like their stomach is hurting with a coffee and then another person is holding it up and they're happy and stuff. But yeah, a lot of those little like food tasty videos of have worked really well.

Matt:

I had a little of an advantage because I've been writing copy for 10 years or so. But I don't think it was anything that crazy. I think it's like you either hired a copywriter or just picked up your copywriting one-on-one stuff for like... The good thing is, is like with an e-commerce business with a relatively low transaction value, it's like testing is so cheap as long as you stay focused.

Matt:

I think if you start trying to test a million different things at once or you aren't really clear on your ad channel stuff, it's like it's almost impossible and it's going to be way more expensive. But if you're focusing on like one channel, one ad, one landing page, then testing, as long as you don't get too distracted is relatively cheap. And so I don't think you have to be the best copywriter creative person, because I think you can just add so much stuff and figure out what works rather than guessing.

Brett:

And this really, this process of getting a little bit better each time, gaining a couple of points of efficiency, increasing your conversion rate just a little bit and increasing the AOV just a little bit. It all really adds up, and so I'm glad that you said it because I think sometimes we're looking for like one magic breakthrough, which is that's not the way it works. Like test headlines, find the winner, test the offer, find the winner, tweak the landing page.

Brett:

Any insights you can share on your testing process or methodology? How do you know what to focus on for your tests and how long do you let a test run? Any insights there on testing?

Matt:

Yeah. Our main Facebook ads guy would be able to talk to this way better, but it's like I was running it with him at the early stages. And so a few tips or principles is like, one is, test as cheaply as possible. Even though we knew we wanted to scale up really big, we were starting with... The campaign structures changed a little bit over the past year with Facebook's campaign budget optimization and all that kind of stuff I'm sure you could tell people about.

Matt:

But back then, we were basically running like $20 an ad set to start off with. And so super low budget because I find with most of these businesses, every business I've been involved in, the biggest nightmare at the beginning is the tracking piece. And it's like, you can spend 1,000 bucks a day if you've got the budget, but it doesn't mean the tracking is going to be any more correct until you really have like beat it up and you're very confident.

Matt:

And so starting super small helped. And we started off trying to use Google's split testing tool, but then we found that it was way easier for us to just test, do our split testing with Facebook. And so we would run like a brand new clean ad set. And then we would have a control version with no social engagement history or just a clean, basically fresh one. And then say, if we wanted to test five different headlines, we would have five different landing pages where the only difference was a different headline.

Matt:

And so then we would have five different ad sets all with the same ad, same ad copy. The only differences are going to a different headline page. And that for us has been the cleanest way to test. We actually don't use any split testing software-

Brett:

Nice.

Matt:

... kind of a unique, they don't really have a lot of people talk about, but it's worked really well for us. It works so well that we just stop looking at split testing software, and that's how we test. Whether it's an ad test or a landing page test.

Brett:

It's a simple thing, and then you're only changing one variable in this case. Right? It's just the headline. The ad's the same in same ad set, but different different landing page.

Matt:

Yeah.

Brett:

Whereas if you're testing a whole bunch of things at once, it's hard to know, was it the headline or was it the ad or was it the audience?

Matt:

Yeah. And for us it was like, I didn't want to have to spend the rest of my life running freaking Facebook ads. So it was like trying to pick up enough traction where it made sense to hand it off to an agency. Because the guy that we hired, we get a little bit of a discount because we're friends, but it's like his normal fee and it's not that far off what we pay. His normal minimum is like 10 grand a month, and so you got to be doing some certain volume for that to even make sense.

Brett:

Absolutely. Just starting out, you can't really make the numbers work paying that kind of fee.

Matt:

Yeah. So my whole thing was trying to do like the 20%, the 80/20 that was going to get us enough traction to I didn't have to run Facebook ads any more myself so that he can manage all that split tests and stuff and I could move on to other things. Other thing that surprised was, on the landing page, we have this long form, ugly landing page that we've tested all kinds of stuff. We try to have a nice little pretty landing page, it looks like a nice e-commerce store and stuff and it's just like completely terrible performance.

Matt:

And so I would love to beat it because I think it would make our brand look better, but we haven't been able to beat it. And so like along the way, we also didn't really focus on the e-commerce store at all. We still don't spend a lot of time there. We spend it mainly on the acquisition channel and then the email marketing after, and the subscription. But we don't spend a ton of time optimizing our own e-commerce store, because it's just one of those things. It's like we run this business super lean even at $2 million a month in revenue.

Matt:

So it's like, that may be an eye opener for some people who think they have to have the prettiest, nicest looking e-commerce store that's on par with all these billion dollar direct to consumer businesses and stuff. And that's not been our experience I guess.

Brett:

And you're tracking and measuring it. And that's one of those things where, man, don't let your preferences dictate what you do. Look at the data and the way you guys are scaling and growing with Facebook ads, if those are the pages that are working, that's what you got to double down on. And it sounds like you're making the right choices there for sure. That's really good.

Brett:

Any other thoughts on keys to scale with your marketing before we transition to product strategy?

Matt:

Yeah. We've been able to get multiple channels to work well, but I think it all was because we had one funnel that we really dialed in the numbers. And so we had this one funnel that we focused exclusively on Facebook ads, Facebook and Instagram together, but Facebook ads. And we really dialed in that thing. We knew our conversion numbers, our revenue per visitor, all that kind of stuff.

Matt:

And then we were able to take that and then use it to get a lot of other channels working very quickly. Started with affiliates, and so affiliates have been huge for us. Charles and mainly him has a lot of personal relationships in the health space from all his past stuff, so he's got some of them to promote. I also started contacting all the sites ranked for like best organic coffee, best low-acid coffee.

Matt:

Started contacting all of them and was like, "Hey, you're promoting this Amazon associates thing where you're making your like stupid 5% or whatever." I was like, "We'll pay you $30 per person that buys."

Brett:

Wow.

Matt:

"You're going to have a lower conversion rate because we're not Amazon, but it's going to make up, so you're going to make way more money." And I even made them an offer, I was like, "Hey, I'll guarantee you I'll double your commissions next month from this page if you put us there for a month. You can always swap us out later. I'll literally guarantee you this amount of money no matter how many sales you make." And so that was enough to get a few people to try it out.

Brett:

Nice.

Matt:

And then was able to say... I went to their competitors after that and I said, "Hey, this site is promoting us because they make way more money off of their best coffee affiliate site." And then, so it was real easy to get people to sign up back to that. So if you search for any of those terms, now you'll find us listed like all over there. We're the number one organic coffee, number one low-acid coffee according to all these coffee affiliate sites.

Matt:

And I used to think, it opened my mind because... And I've been doing marketing stuff for a long time now I feel like, but I still had something that was like, "Yeah, these review sites, it's people that are just super passionate about coffee. They're literally talking tasting and reviewing all these."

Brett:

testing, they're just choosing this..

Matt:

Oh, freaking way. It's just somebody who took a course or something on how to do SEO. Not really good at it, and then now created a site that basically just has all these review pages, which is 100% and just engineered for Google. Some of them asked for coffee samples, but some of them don't even care. They're literally just that's his business. Usually a guy, I guess it could be a girl, but in experience, it's guys.

Brett:

Whatever reason in the SEO space, that has always been dominated by dudes. I don't know why.

Matt:

I don't know. Literally just whoever can make them the most amount of money is all they really care about for the ones that I've seen. But it all started with having one funnel working really well, which I think is the secret for all affiliate stuff is like, you can have relationships and you can beg them to promote, but they're not going to keep promoting unless they're making money. So it's like once we have this dialogue get affiliates working, Google search working.

Matt:

Some more retargeting, but YouTube a little bit. We have some acquisition on Snapchat, a lot of retargeting on Snapchat and Pinterest. And it's all because we have this one funnel working and getting everything else working at the same time was all very easy at that point.

Brett:

Got it.

Matt:

That's basically been our approach to marketing, and Charles manages all the email marketing stuff. But it's like pretty typical email marketing stuff for like a direct marketer. That's like, we want to manage the relationship with the customers and all that, but we're doing promotions all the time and we're probably mailing at least five times a week or so. Which somebody who does direct marketing through email is going to be like, "Yeah, that's normal."

Matt:

But then other people are kind of like... More typical e-commerce people are terrified to email people too much, which I think is a mistake, but that's like-

Brett:

It is a mistake, yeah. You're almost certainly not emailing your clients, customers enough. I want to just highlight a couple of things. One, I love that approach of, hey, get one funnel that's working. So one landing page, one offer, that whole formula that's working because to your point, if you're going to get people to promote your product for you, you can get them to do it once. But if it doesn't work, then they'll likely never do it again.

Brett:

And I love, I love your approach to SEO because a lot of people are probably thinking, oh man, I got to get my site to rank so that I can capitalize on organic traffic. That's not the best strategy. Right? What's that?

Matt:

I don't have the patience for that.

Brett:

Yeah. It's great, so okay, create some content, do some things, of course, get your page looking good instructional that, but it's a slow game, man. It's months and months and probably years. So why not just contact the people that are already ranking and say, "Hey, I'll cut you a deal." And I love the fact that you were bold enough to say, "Hey, I'll double, your commissions, doesn't even matter how it works." Because you knew and the fact that you had a funnel that worked gave you the confidence for that and it was totally worth it in the end.

Brett:

You sort of bought your SEO to a certain degree and now you're in so many more places than if you had just said, "Hey, I'm going to go hire an SEO firm and see if I can start to rank over time -"

Matt:

It's like we could have spent 12 months doing SEO ourselves and maybe got the same result and there's this thing we have to manage. Or instead we had literally number one rankings all over the place in like a month, like 30 days. And the other benefit too of that is not only the consistent sales and everything, but we've taken screenshots of our number one rankings on those sites and added them as social proof, because we're like, "Hey, we're the number one coffee on this, we're the number one coffee on this."

Matt:

Because it's like a lot of people like look at those sites and they think they're super credible. Maybe to some extent they are, but it's your opinion, I guess, but I'm like, "Hell, if they say, 'We're the number one coffee,' I'm going to let people know that just until I get something that

Brett:

Absolutely.

Matt:

... gives you an award or something."

Brett:

Absolutely. And that's just looking for all the assets that you have at your disposal leveraging it, and getting a little bit more from each channel, each opportunity. It's brilliant. That's awesome. All right. We got about 15-ish minutes, something like that left. Let's talk product for a minute because you and I had a fascinating conversation about product several weeks ago when we were prepping. If you're going to get to $2 million a month in sales in e-commerce, you probably don't have just one product.

Brett:

You probably got several products and a variety of stuff. Walk through how you scaled with your product development, product launches. And I'd also love to cover some successes and failures along the way.

Matt:

Full transparency, Charles manages most of the product stuff, but we make a lot of the decisions together. Like we started off with our basic product, which has all the major roasts, medium, dark, light, decaf, espresso roast, but the main ones are medium, dark and light and decaf. Those are the main products that bring in probably 70% of the sales if not 80%. And then we also have a line of flavored coffees. Charles has been building those out for a while. We keep adding new flavors.

Matt:

And then along the way, we had one kind of premium more exclusive coffee that we would do like limited batches just to have extra stuff to sell people that were already customers. Because it's like, if you just bought six bags of medium roast, because that's what you drink, it's like getting you to buy more bags of medium roast. It's like you can only physically drink so much coffee.

Matt:

If you have a flavor that you can buy or a special roast, you can buy that and maybe give some bags or something like that. It's like it works out well there. But then along the way, like any business, we're like, "Okay, cool." I've done a bunch of information marketing stuff, so is Charles. Used to have as super successful weight loss product and stuff. That was all information-based.

Matt:

And we're like, "It'd be nice to have like a product that we could sell that at zero cost of goods sold, 100% digital." So we ended up paying a guy to create like an inflammation course that... We paid them like a fixed fee. So then once it was created, it was ours to sell for whatever we wanted. It just didn't really work out. It's not really what people wanted. They knew us as a coffee business and they were sitting here trying to sell like an inflammation course.

Matt:

Then we started talking with an investment bank because we're eventually going to sell this business. And so we were talking with the investment bank and then they were advising us and stuff and saying like, "Hey, stay really focused with your products there. Otherwise, it's going to be way harder for like a potential acquirer to wrap their heads around this business."

Matt:

We also tried like a few supplements because we both sold lots of supplements in the past. -

Brett:

Yeah. It always another recurring revenue product and-

Matt:

Yes.

Brett:

... you're selling healthy coffee, so the supplement made sense. And honestly, the inflammation product made sense too, it's healthy coffee so that it makes sense that you tested it, but it also makes sense that it didn't work.

Matt:

Yeah. And so then with the supplement is the same kind of thing, it's like we did all this work, created this product. Sold okay, but then we're like, "This is just like a huge distraction and it's also like really diluting the brand." And it was harder for us to sell, but it's like as soon as we add like a new coffee flavor, a new special version of coffee, then those are so much easier to sell.

Matt:

And it's like I found the same that... I learned the lesson quicker in this business because I'd already learned it very painfully in Amazing where just like back in the day with Amazing, we tried to go from like just teaching Amazon stuff to teaching everything in business, and then like nearly killed the company. And then had made a few more mistakes. It took multiple mistakes to really ingrain that in my head.

Matt:

But then as soon as we went back to like, okay, what else can we teach related to Amazon courses, events, mastermind, software? Everything sells very well because that's what people are expecting. Same thing in this business, it's like we started deviating from coffee stuff. People are like, "What the hell is this?" But then we'd go back to selling more coffee stuff, it's very easy.

Matt:

And only slight variation we've had from that is we've created a coffee creamer product, which we both, Charles and I both, we both try to be pretty healthy and stuff. We both literally put college and creamer and MCT, the whole kind of like bulletproof approach in our coffee. And so from an authenticity standpoint and also it's very much related to the coffee experience. That has gone pretty well.

Matt:

And we think that'll be more of a long-term product, but anything that's just started some random other health product is been a waste of time for us and waste of money too.

Brett:

Yeah. Keeping it tight and focused and also being simple. I think sometimes entrepreneurs, we're idea people and we're always thinking about the next thing, the next innovation, the next breakthrough. And so that can lead us to wild ideas. And sometimes it's okay, but with your product mix, stay tight, stay focused. What do your customers expect? What do they know you as? And really double down there?

Brett:

I love the creamer idea. I think that is going to stick, and that is very... For a lot of people, the two go together, you can't have coffee without creamers. I think that totally makes sense.

Matt:

Yeah. I think it also depends on your goal with the business. Our goal has been very clear, to sell it. And so, because that's our goal, it's like we want something that's very easy for people to wrap their heads around it, potential acquirers like, "Okay, this is a coffee company that sells typical coffee stuff." Also, what's gone very well for us is adding K-cups, biodegradable K-cups, because we're in line with the environmental angle. So we didn't want to do typical like plastic K-cups biodegradable.

Matt:

Those have also gone exceptionally well. Another coffee product, big surprise, it goes very well for us versus like other stuff that didn't. And also it's just makes it real easy for a potential acquirer to wrap their heads around this thing versus like, oh, I'm buying this coffee company, but they're also selling these inflammation products, inflammation. They also have some supplements it's like... Nevermind, I'm going to get something else that's easier to understand.

Matt:

Maybe somebody's goal is different though. Maybe their goal is like, I want to build a lifestyle brand and around me is like an influencer or just try to produce as much profit as this thing. I don't ever really care about selling. And maybe their answer will be a little bit different, but for us, the outcome has been very clear, so if that is your outcome, I think also thinking in terms of like, why would somebody actually buy this thing and what's going to be like the easiest thing for them to understand? That's helpful too.

Brett:

Yeah, totally makes sense. What is your ultimate outcome? And how do you build towards that end? Because yeah, to use an example, look at Amazon, they're always inventing crazy businesses. They're venture into voice devices, and a voice assistant, and speakers. That was a departure from a lot of what they were doing before, but now it all totally makes sense and it ties together. And so, yeah, I think that's a perfect clarification there, really depends on what your goals are with the business. That's going to dictate product strategy too.

Brett:

Any tips or insights you can provide on like when do you add a new product? How do you get ideas for new products? Is it driven by customer feedback? Is it just you and Charles like brainstorming? What does that process look like?

Matt:

As far as when is, I think the whole theme for this thing for me has been staying as focused as possible, which everyone talks about, but it's like how do you actually put that into action? And so for us, it was like very focused on the marketing side. I know Amazon stuff better than a lot of people because I've been doing it for so long and we teach and all that kind of stuff. I've got access to everybody on the planet.

Matt:

We didn't add Amazon until like four months ago. It is because-

Brett:

Interesting. Would we can elaborate on that a little bit? That was actually one of my next question was, what was your Amazon strategy? Because you were the Amazon guy. But behind the most successful Amazon course or most successful info product of all time, Amazing Selling Machines. Why did you decide to go that route waiting before you got on Amazon?

Matt:

Because we knew we were going to have another channel we had to manage. And as soon as we have multiple channels to manage, we're probably not paying good enough attention to the first channel. And so for me, the channel being like the Shopify store, another channel being Amazon. We didn't want to have to do any of that sort of stuff and take our focus away from the sort of main channel we were running.

Matt:

But then for us, it's like once we got, call it like 18 plus months into this and the Shopify store, we've got our Facebook ads acquisition dialed in, our subscription dialed in or email marketing dialed in. It's like there wasn't a lot of variability happening over there. We could very well kind of predict what was going to happen and we... It wasn't a big load on us anymore. So at that point we were like, "Okay, now we're ready for another channel."

Matt:

And it's like, I'm not saying one is necessarily better than the other, but it's like, I feel like you've got to pick your battles. Basically we tell the same people the same thing on Amazon, "Don't start trying to add another channel until that first one is super stable." And so for us, that's how we made the decision to transition from Shopify and add Amazon. And we actually have an external team who manages the whole thing for us, because we've kept this business as lean as possible.

Matt:

And it's like our model, it's like me and Charles are full-time. We've got a full-time operations person, a bunch of customer service people that are kind of full-time, but they're contractors. Everything else is outsourced. All the ads, design, development, managing Amazon, all that kind of stuff is outsourced, which has been our model. And so for me, it's the same thing on the product side is when we felt like we had really tapped out the potential of our core products, like we're trying to get as many freaking customers as we possibly can and sell them our main rows.

Matt:

And we're trying to sell as many of these flavors and other products to our current customers. It's like at that point, it makes sense to start adding more products. And we feel like we fully tapped out the first ones versus like adding a whole bunch of stuff, it's a whole bunch of extra stuff you have to manage, but you're leaving the low-hanging fruit, which is all your current products.

Brett:

Right. Really maximize and be very, very good at your primary channel and to expand from there. And one thing too, I think in some ways it's harder to build a successful brand off Amazon than it is on Amazon in some ways. And Amazon is a jungle, it's tricky for sure. But I think if you can build that momentum, that brand off Amazon, then when you do launch on Amazon, you are going to have a ton of momentum, there's going to be a lot of people looking for you. Native Deodorant... Go ahead.

Matt:

Sorry. I didn't mean to interrupt. That was one of the big reasons we jumped on there is because like, if you went and did a search for our brand on Amazon, there was already like a million different searches that were in because people are looking for it and I was like... And we experienced the same thing with another brand. We manage for a period of time, those super heavy into direct marketing. Just being on Amazon, we immediately start making sales because some people will just-

Brett:

You immediately get a lift.

Matt:

Or buy on your store.

Brett:

Yeah, exactly. We worked with Native Deodorant and they saw the same thing where they built this amazing brand off Amazon and they knew, and they were getting feedback from Amazon too, that as soon as they just put their product there, an immediate lift. We're helping Boom, as we run Boom by Cindy Joseph right now, we run their Google, and YouTube, and stuff and we're helping them now on Amazon or get ready for Amazon and expecting the same thing.

Brett:

There's already a ton of people searching for Boom on Amazon right now. It's not available, so it's going to be a pretty and immediate win that way. That's awesome. Any, any other thoughts on timing and where you get the ideas for new products? Just any other insights on the product piece?

Matt:

Yeah. I wish I had more to add there. The big one for us was on the K-cup side. That actually wasn't even on our radar because neither he nor I use K-cups at all. But he did say, because Charles, he likes to be very tied into the customer side of the business, which I think makes sense for his position. And so literally, every customer support ticket gets emailed to him in addition to the normal ticketing system where it's handled, but he just wants to see all that stuff..

Matt:

Because he would say like, "Probably a couple of times a day, somebody would be asking for K-cups." And so eventually we're like, "Okay, we probably got to add this thing." It's a bit of a hassle because you got to find, where do you get the little cup things? Who's going to put them in there. Where do you get the box there? Who's going to ship them all out? So was a little bit -

Brett:

How can you environmentally friendly? Otherwise, you're going against your core.

Matt:

Yeah. So it's a bit of a hassle that we're going to figure all that out. Now that we've done it, it's getting better. But that was another thing where we were seeing the data from the customers, and then we are also heard about this from the investment bank that we're talking to. And the thing is helpful to talk the whole idea of like thinking with the end in mind. If your goal is to sell the business, talk with somebody who sold a lot of these businesses and they may have some good ideas for you to.

Matt:

We've run a lot of ideas by them and they kept hounding us. They were like, "When are you going to have to K-cups? When are you going to K-cups? When are you going to add K-cups?"

Brett:

Nice.

Matt:

Why they keep making such a big deal about this? It can't be that big. And then, so I started researching statistics and it was like one in four coffee drinkers in America only uses K-cups.

Brett:

Is that right? I had no idea it was that many.

Matt:

I always thought it was just like a separate thing that people did, but it's like almost one of those core forms of coffee. There's people who like ground coffee, there's people who like beans coffee, and there's people who like pods. They're all equally as important, and so as soon as we added that, the thing started selling like crazy. Because some people will only use those and they don't really have to use the little one where you put it in there yourself and stuff. It's messy, but we used to that back in the day. So yeah, that has been huge for us too.

Brett:

That's awesome. I love several elements of that. One, Charles getting those customer emails. And I hear, and prick off as true. Bezos did the same thing, he would get customer complaints. They would be sent to him because he wanted that data, he wanted that information and-

Matt:

I did the same thing in Amazing. It's like we've got a lot of customers over there and but I eventually just put my email inside of the actual course. I was like, "If you ever have an issue, email me." And there's a lot of times people think that all people are just going to hound you all day long, especially with ad business, if I get info marketing like mini celebrity kind of business. But it's like most people, unless they're just crazy, are only going to email you if there's a real problem.

Matt:

And it's like, I may get a few a week in there, and like thousands of people have seen that. And usually it's pretty legitimate stuff. And so, I'm a big fan of that strategy, of like being as close as possible to the customers, literally let them contact you directly.

Brett:

Being as close as you can and getting data as quick as you can. Don't have it filter through three levels of people before it gets to you, just get it. Get that feedback. Because sometimes it's like a really simple thing, or sometimes I know in our business like as an agency, reporting is an issue, like how do we show the results that we're getting for our clients? And I remember early on some things that people just kept having issues with, and I'm like, "Man, that seemed obvious to me." But now I see that it's not obvious.

Brett:

And so we fixed it, and added more visualizations, stuff like that. Or in this case where I would have been in the same boat as you and Charles. I hang out with coffee snobs at times. I like fresh coffee and I've got a nice Bonavita coffee maker and a nice grinder. It's like, K-cups, no way, man. I'm not using the K-cup. But listen to the customer. And if it's 25 or 30% of people use a K-cup, you better offer it. That's a no brainer.

Brett:

But if you're not listening to the customer and then also people will experience like your investment bankers and stuff. Really good -

Matt:

And I think, because we've had some products that it works, some products that have not worked. I think that as long as you're maximizing the sales of your products that you already have, and with the new products you roll out, you try to reduce risk as much as possible. And that is one smart thing we did on some of the supplement products is we found a way toe barely order any or get the supplier to actually fund the inventory and stuff.

Matt:

Then I think it's way less risky to add and test more products. And we've used that to be able to scale up pretty quickly without huge financial risk.

Brett:

Yep. Small calculated risks. Then you find winners, you double down, you go all in on all those that are winning. That's awesome. Fantastic stuff, man. This has been a ton of fun. This was a perfect compliment. Go back and listen to the episode where Matt and I talk high level decision-making and mass process there, but this was tactical, practical, really, really good insights. Appreciate it very much.

Brett:

Matt, how can people find out more about you? If someone's wanting to enhance their Amazon game. Talk a little bit about Amazing.com and your events and products and stuff. And then we'll talk co coffee in a second too.

Matt:

Sure. I finally have created like a personal brand website that's like a hub for everything.

Brett:

Nice.

Matt:

Everything Matt Clark has taken, so I did mattaclark.com. Middle name is Alexander, mattaclark.com. You can have links to social. I've got a few blog posts I've been putting there that are the best advice I can possibly give on how to make money, how to keep money, time management, building a team-

Brett:

Awesome.

Matt:

... is so far what's on there, so it'd be cool to check those out. If you're interested in e-commerce stuff, building an e-commerce business, we've got amazing.com. We've got our main program, which teaches you how to go from scratch, which is Amazing Selling Machine that you'll find a link to on there. We've got other free training. We've got some stuff for existing sellers, if you want to scale sales on Amazon.

Matt:

Our main wheelhouse at Amazing right now is very Amazon-centric, so we've done a course with Ezra actually. That was basically how to go from Amazon to Shopify, but still your main thing is Amazon. So you're probably better off going to Ezra at this point, by the way, if you want to learn Shopify stuff, like he's got that stuff covered, so ours is more Amazon-centric. But yeah, check us out if you're interested in that stuff.

Brett:

Awesome. Then you also have an amazing event, SellerCon, which is annual, which just happened. And I got to speak there, thank you for that. Are recordings and stuff so available from that? Or was that live only?

Matt:

Yeah, we do have recordings. They should be available for sale by now. But yeah, if you hit up amazing.com, if you don't see them on there and then definitely just email our support team and we can kind of get you a link. But I'm not 100% sure if we put those up yet, because it takes a little bit to get them. But yeah, we do have our events that we typically do annual, which is SellerCon, which is, I would say, 70% Amazon, how do you sell more on Amazon? What products do you sell on Amazon. Then maybe 30% more like general e-commerce and business.

Brett:

It was a great event. I got to participate in a little bit, got get to meet other speakers, get to see behind the scenes. Of course this year was virtual, so it was interesting, but a great event. So highly, highly recommend that. And then now let's talk coffee. Man, I do enjoy coffee. I'm sure as people are listening to this, they're like, "Man, I got to go brew a cup. I got to go make some." Talk about Lifeboost. Where can we find Lifeboost coffee?

Matt:

Definitely hit up a lifeboostcoffee.com. And for all of the marketers out there, give you like a little bit of a hack is like, if you just look up in Facebook ad library, if you look up Lifeboost coffee in Facebook ad library, you're going to find our ads there and you're going to find our 50% off page and stuff. We do some cooky things on there, so maybe it's like some people who don't really know what they're doing can't buy multiple times and stuff.

Matt:

If you want a discount, you can definitely go over there. Or if you just shoot me a message, DM on Instagram or something like that, I can hook you up also. But yeah, just check out lifebosstcoffee.com.

Brett:

Sweet. I'm really glad you mentioned that resource. That's one I don't mention on the podcast enough, but the Facebook ad library it's like go and find all the top advertisers, find some of their best to add. So look at what Lifeboost is doing on Facebook. And then I also recommend, go to their site, sign up for their emails. Get those emails. Even if you put them in a folder and only review them from time to time. Get those emails, see what they're doing. We learn a lot by observing smart marketers.

Matt:

Yeah, you can definitely sign up for our email list wherever you find it on the site and we're not crazy. It's like if you unsubscribe, you're done. It's not like we're somehow take your email and then spam you from multiple places. Literally, if you unsubscribe, you no longer get emails. So it's definitely a great place to check them out. You'll see all the emails that Charles primarily writes himself, but we have some copywriters. but it's what we do, it's how we sell a lot of coffee.

Brett:

It's really good stuff, really good stuff. Awesome, Matt. Thanks, man. You crushed it. That was an amazing interview. Really appreciate taking the time.

Matt:

Thank you, Brett. Appreciate you having me.

Brett:

Awesome. And so with that thank you for tuning in. We'd love to hear your feedback. Let us know what you'd like to hear more of, what you'd like to hear less of. Any feedback on the podcast, we'd love to hear it. And hey, if you feel so inclined, we'd love that five star review on iTunes. It helps other people discover the show. And with that until next time. Thank you for listening.

Episode 157

:

Arri Bagah - Conversmart

4 Keys to Effective Text Marketing

Myth: marketing texts are annoying.

Truth: bad marketing texts are annoying. Good text messages foster customer loyalty and drive sales.

Ready for the 4 Keys to powerful text marketing right now? While text marketing isn’t overly complex, there is certainly a right way and a wrong way to approach it.

81% of all shoppers have signed up for text messaging from a brand. Customers are clearly open to receiving texts from you. If you approach text marketing strategically, your customers will even welcome your texts. Arri B is here to show you how to effectively do that. Here’s what we cover in this episode.

Choosing the right text platform
No list, no bueno. Learn the most effective ways to build a list fast.
Using your text list to build community
What to text? Learning an effective content strategy for your text campaigns
Optimizing and split testing
Plus, more!

‍

Arri Bagah

Conversmart

Mentioned in this episode:

‍

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 have a returning guest and we're going to be diving into a topic that is extremely relevant, extremely important right now. If you're ready to finally scale with YouTube ads, I have a free exclusive event just for you. Our YouTube ad experts here at OMG, including myself, are partnering with our team at Google to deliver a power-packed virtual event. We're calling it YouTube ads for eCommerce, the winning formula for scale. During the event, we'll show you exactly how other eCommerce brands we work with are spending $5,000, $10,000, even $30,000 per day or more profitably with YouTube ads. You'll get to learn directly from Google, with information from their unskippable labs team. This presentation on what ads get skipped and what ads don't is amazing. I've seen it before, and it will definitely help drive more conversions for you.

Brett:

You can also ask your burning YouTube ad questions to our expert panel, and as a bonus, fellow podcaster an eCommerce expert, Kurt Elster, will be talking about landing page optimization to add fuel to your customer acquisition efforts. When you sign up today, you'll also get access to the replays. Check it out at omgcommerce.com under events, or visit the show notes for this episode. And now back to the show.

Brett:

And so with me on the show today, I have Mr. Arri Bagah. Arri and I met a few years ago now, several years ago, at a smart marketer event, so a mutual connection, mutual friend in Ezra Firestone. We were both speaking at this event. I heard Arri speak and thought, "Man, this dude is smart. He's a whiz kid of sorts when it comes to text marketing and more than text marketing, but he's known as the text marketing guy. And so we're going to be talking about how to use SMS and text marketing in 2021. What should we be doing, not doing? How does this all work? So with that in mind, Arri, welcome to the show again, and thanks for coming back.

Arri:

Thanks for having me.

Brett:

Yeah, absolutely. So we both work in the eCommerce space, or that's where we tend to play and of course the audience here is all eCommerce, and so we're going to be talking about how to use SMS and text marketing in an eCommerce environment. And so I think one of the first questions people think of is, yeah. Okay. So if we're sending marketing messages through text to prospects and customers, won't they just get annoyed? Won't they just be mad at us? Will we be worse off sending these than having not sent them? So what are your thoughts there? Are text messages annoying, and how do we make sure that they're not annoying?

Arri:

Sure. This is one of the things that I hear all the time and it always comes up in every conversation, right? It's kind of going back to pop-ups, right? People think pop-ups are annoying, no one should be using popups. I think it's kind of the same conversation. So I think that people have had bad experiences with text marketing where you never subscribe, you go home, and then you receive a random text message and you wonder, "How did they get my number and how did they send this text message out to me?" So people have had about those bad experiences, right? And it's completely understandable for people to be skeptical of the text marketing channel.

Arri:

But I think that at the end of the day, you are not your customer. And we've had many brands that thought text marketing wouldn't work. They try it. Revenue comes in within a week, and then they love it and they want to do more. So I think that you're not your customer. It's always great to test something out before making the judgment that it's not going to work for my audience. It's annoying. People are not going to want to receive text messages. And we've done a recent 2020 state of DDC text marketing report. And we found out that over the past year, over 81% of consumers have signed up to receive text messages from Shopify stores. And over 79% of consumers want to receive text messages. And most of them are already receiving text messages from presidential campaigns, two factor authentication, delivery notification.

Arri:

So it's not something new that someone hasn't seen, most people already have text messages going to their inbox. So that said, people are already using it. You never know until you test it out, the data is there, that the revenue is there. So yeah, you might as well give it a try.

Brett:

I love that. So several lessons there that are really important. The first one that I'll point out is, yeah, you are not your customer. I am not my customer, right? We can certainly take our own experiences and learn from them and maybe apply them to our customer. But you have to be open to testing things. And even if you hate getting text messages of any kind, or you hate getting marketing messages via text, there's a lot of people, 81%, who have signed up to receive text messages from a merchant in the last year. That's significant, and I know for a lot of people that is their primary mode of communication. I think that's pretty far reaching. I think most people are avid texters now. And if it's not the favorite mode of communication, it's certainly up there.

Brett:

I think the other thing, and I'm glad you use the analogy of a pop-up, right? We all hate pop-ups. Pop-ups are, that's a bad word, pop-up blockers, and the different browsers now have pop-up blockers in them, but really, we don't like bad pop-ups, right? If there's a welcome message that shows up on a site we really wanted to visit, and it's an offer for something we really want or a discount or something new, then it's welcome, right? Then we're okay with it. So I think the same is true with texts, right? Bad texts are annoying, but texts to the right people with the right message at the right time can be really, really positive. And so, can you kind of talk about that? How do we go about operating our tech smart messaging plan strategy so that it's effective and not annoying?

Arri:

Exactly. Yeah. Yeah, you definitely got that one, that bad texts are annoying, and good texts are welcome, right? So I think one of the first things to do in order to start setting up text marketing is to figure out what platform you want to use, and not to say that platform mattered, because at the end of the day, everyone has access to the same platforms, but there is a reason why some brands are doing great and some are not. And that is because it's the strategy that really matters. So that said, platforms like Postscript, Attentive, Yappo, SMS, are some of the great ones out there that are built for eCommerce that you can start using today. And once you have that, I think it's really important to figure out some of the ways that you can grow your list, right? Because at the end of the day, if you don't have a list, you're not going to make any money.

Arri:

I've had many people come up to me, "I've tried text marketing, it doesn't work." And I ask, "How many subscribers you have?" And it's like, "I have 250 subscribers." "Well, you can't do that much with that many subscribers. It's really important to keep growing your list." So we can get into some of the strategies to grow your list, but once you have your list, then it comes to content, right? What do you send? And we can break that one down to automated flows, campaigns, as well as customer support. And lastly, optimizing, looking at the data, and continue tweaking things with testing to continue improving. Those are some of the ways that I recommend people to start text marketing, right? But yeah, we can dive into each of those.

Brett:

Yeah. I love that. That's fantastic. Let's talk platforms for just a second. I'm glad you mentioned that it's not so much about the platform as it is how you execute, right? How do you build your list? What content are you sending? What's your strategy, right? That always matters more than the platform. But any additional feedback on platform, you mentioned several, any places that are better to start for or better for people with small lists versus large lists, any additional context you would provide on platforms?

Arri:

Yeah. Yeah. Usually people ask me, what's my favorite platform? I don't have one. I love all of them. They're all our partners. But if you're a new Postscript is a really great one, especially for Shopify brands, they only serve Shopify brands. Postscript is a really great one. The Apple SMS bump is also another one. I know my friend, Ezra, is launching his own text marketing app called The Connect for his audience that you guys are going to be able to check out soon. I'm going to be doing a few things here and there with Ezra. So that one is good. And then you have Attentive for bigger brands if you're doing hundreds of thousands of text messages per week, then I highly recommend Attentive. They integrate with more than Shopify, Magento, eCommerce, custom built platforms. So that's more for brands. Yeah. Attentive. That's more for bigger and larger brands.

Brett:

Great. Okay. Awesome. Sounds great. So let's talk then, let's transition to growing the list, because if you don't have a list, you don't really have any text marketing abilities. So how does one go about building a list?

Arri:

Yeah. So one of the first things is to figure out what's going to get someone to actually join the list, right? But what's the incentive? What are you going to offer someone? What is the value for someone to join your list? Because let's be honest, people are not just out handing out their phone numbers. It's very hard to get someone's phone number.

Brett:

Yeah, they're not just saying, "I'm not getting enough texts right now. I'd really like to, if I could find some advertisers to send me some marketing texts, that'd be great."

Arri:

Exactly. So people are not doing that right now. So yeah. What is the value in someone joining your list? And I think the value is the power of community. How can you build an engaged audience that when you launch a product and when you have a promotion, they go crazy, you sell out the product. So those are some of the ways that we're looking at text marketing. So I was just in a Clubhouse room with some brands, and they were talking about how they make it a little bit hard.

Brett:

Quick side note, how are you liking Clubhouse? Has that been valuable for you? Have you made new connections? Are you using it well? I'm on Clubhouse, but not doing anything. So I'm about to change that. So if you want to connect with me on Clubhouse, let's do it. But how is it working for you?

Arri:

Yeah, I just started using it too. I know you can connect with some top talent and great brands, great marketers, people that you don't have access to on a regular basis. So for me, it's been great to get those people into other sessions, have conversations, and then maybe take it onto the next level. So that's kind of how I'm planning on using it. I'm very new to it. So yeah. I mean, yeah, I've been in rooms hearing people talk, just checking it out functionality wise, how it works and everything. But I think it's a great platform to connect with people that you can't just email and get a conversation, but if you invite them to Clubhouse, they might join you in for a conversation. So yeah, you could even do this podcast on Clubhouse.

Brett:

On Clubhouse. Yeah. Yeah. The podcast content is great for Clubhouse. I'm just, yeah. I'm still figuring out, but I'm going to accelerate that endeavor and hopefully be more active on Clubhouse soon. So I love this idea of building community and figuring out what kind of incentive are we going to offer? How do we get someone to give us their number? But practically speaking, tactically speaking, what does that look like?

Arri:

Yeah. Almost turned into a Clubhouse expert for a second.

Brett:

I was totally, I was making mental notes.

Arri:

Yeah. I also, with text marketing, anywhere you can collect an email, you can collect a phone number. The only thing is that we're making sure that you're compliant, that someone is actually opting in to receive that text message. So if you have an email popup, you can have a phone number field as well and collect that phone number. I know the platform that I mentioned make it really easy to collect both an email and a phone number. This could be a whole nother topic, you focus on email or text.

Arri:

So what I would say is that on mobile traffic, I prioritize text. And then on desktop traffic, prioritize email first, but also collect the phone number, because if someone is on their phone, it's super easy for them to get that text, whether you're offering discount or whatever it is you're offering to get them in, it's super easy for them to Optane. So on mobile, definitely prioritize text. Checkout is a really good one, too, if you're using any Shopify checkout, Zipify, CartHook, whatever you name it, you can get that customer's phone number at checkout and have them subscribe to receive abandoned cart messages, follow up.

Brett:

And is that just as simple as just having a field for phone number, or are you explaining, or you're putting that field there and then saying, "Hey, here's why you should give us your number?" Or what do you advise there?

Arri:

So you can have a checkbox that says, "Subscribe to receive our text messages or subscribe to receive offers, updates, early access to product launches, et cetera." So usually if you have Shopify Plus it allows you to add an extra check box at check out and that would allow you to collect them as a subscriber.

Brett:

Got it. Got it. Okay. And are you seeing, what kind of percentages are you seeing or should you be seeing to get new text subscribers?

Arri:

Yeah. So that's a good question. On average, we're looking at 5% opt-in rates, and people usually, say, "Okay, but I'm getting 15% over email," but we have a brand that's doing the same amount of revenue with email and texts, but they have 10% of their email list. So even had a brand that had 50,000 subscribers doing $1 million a month in text marketing, just via text alone. So the size of the list isn't that important, because the text marketing is very different where you're getting 99% open rates, you're getting 10, 20, 30% click through rates. So those numbers are pretty crazy. And you have brands that are selling out their products, just via tax even before sending it to their email lists, so even though small lists can do really large numbers of revenue just because of the reach and the engagement.

Brett:

Totally makes sense. Yeah. And so even if you are getting 5% opt-in on texts versus, say, 20% or something on email, the responsiveness of that text list really balances it out. And it is true. When you get a text message, it's much more personal, it's a little more intimate, and you're going to check, right? You get a text message, you don't ignore that. Everybody looks at every text message, right? Maybe I opt out or something if I forgot I opted in, but I'm going to see it. I'm going to get it. So totally makes sense. So we're opting in by really, in the cart, in the checkout, anywhere we have an email opt-in, why not ask for texts as well? And I love the idea of prioritizing text for mobile traffic, and then maybe leading first with email for desktop traffic, certainly still asking for texts in both. And any other tips for how to get subscribers?

Arri:

Yeah. I think when people look at texts marketing, they think that text is out to get email, or you're supposed to shut down your email service and just use text marketing, but we want both channels to be working together. So we're not looking to stop email marketing in any way. We're looking to leverage both channels and have them work together, because we've done this test where we'll send out just, for this brand, we're sent on one text message alone. I think that did about $6,000. Now, one email alone, and that did around $3,400. And when we send out an email and a text, and we did $15,000. So, because you're using both, you're generating revenue, so don't look at it as, "Hey, I have to shut out. I don't have to do email anymore. I have to focus on..." We want both to work together.

Arri:

So that said, with collecting subscribers, you can leverage your own audiences. If you have Instagram followups, do swipe ups leading to texts. We've had brands that are now adding stickers to, let's say, their retail products. If you're selling on Amazon or Target, whatever, you can get those customers sooner. You can add a sticker that says, "Text this keyword to this number to get this offer." And that could be a great way to customers to come over to direct to consumer as well. You can leverage a Facebook ad to collect phone numbers. The possibilities are endless. So yeah, but those are some of the top ways that I recommend for brands.

Brett:

Love it, love it. So this will be a good point then to kind of transition in, into content. What are we actually sending? And you talked about auto campaigns for things like abandoned cart and whatnot. So we'll have you break that down, customer support, and I think you had one other category as well. So you want to kind of talk that through? What are the main elements? What are the main content types that we're running with our text marketing?

Arri:

Sure. Automated messages are a huge part of email marketing, right? Someone gives you their email, then automated welcome series. They go through an abandoned cart series, et cetera. So we want to do the same over .. When it comes to content, you don't want to just copy the same thing, email, and just paste it in text, because text in itself is different, is a one-to-one communication channel. When you talk with friends, family, coworkers, are you having a conversation with, it's not anything professional, serious. It's emojis, gifs, images, et cetera. We use it the same way, and kind of humanize the brand a little bit, instead of being too, more casual when it comes to text.

Arri:

And when it comes to automated flows or a welcome series, and the purpose of the welcome series is to introduce your brand customers. And if you have an incentive, you can deliver that incentive in the first message. And over a period of 14 days, you can deliver text messages that convincing someone to buy. You can focus on the value of the product. A social proof over 250,000 customers are using this product. Scarcity because people are going to get that text, right? How can you get them to act right away when they receive that text message? If you're sending an offer, does it expire within the next 24 hours? So things like that, that you can add to your text messages that would get those customers to act pretty quickly. And then you have your abandoned cart flows. And the purpose of the abandoned cart flows is to get that customer to come back and complete checkout.

Arri:

So what you can do is, many brands have abandoned cart set up over email already. So what we want to do here is maybe send a text out within 30 minutes to an hour after they abandon their cart, because when shopping, they, most of the time have their phone on them already. So it might be better to send them that abandoned cart within an hour to get them to come back. And if they don't purchase, then they can receive that email within four hours or so. So if you're looking at, how can I use both flows at the same time? We typically just stagger them, just send out the text is going to get the most.

Brett:

Makes way more sense. Yeah.

Arri:

Yeah. It will be way quicker. And then you can have that email go out. And obviously the platforms are connected to Shopify. If someone makes a purchase on text, they're not going to receive an email after. So that solves that problem there. And then post-purchase, order confirmation messages, we've had many brands say that the customers ask, "Hey, did my order process?" And their customer support team gets that every single day, many, many times. So what if you could send an order confirmation via text and be sure that someone is going to receive it so that you don't have them reaching out to your customer support team, asking if their order has processed. And one thing that we did find over the past year is that when someone is in buying mode, they're more likely to buy again.

Arri:

So if you send them a thank you message and say, "Hey, here's another 10% off for your next order," they're probably going to come back and purchase again. So that could be a great way for post-purchase, to get those customers to come back. And then you have reviews, you can hit up those customers, maybe in two weeks after the product is delivered to leave a review. If you're using product, it integrates with their loyalty and reviews programs, so it makes it really easy to set up. And then you have your customer went back, right? After four or five weeks, you can send that customer, who have purchased certain collections, other products in the same collections that they're more likely to buy. And that can be a great way to bring them back. But those are some of the initial flows that I recommend in terms of setting up your automated flows.

Brett:

Love it, love it. And then customer support also makes sense. And so order confirmation, do you like shipping confirmation as well? I know a lot of people really like to know when their item ships also.

Arri:

Mm-hmm (affirmative). Yeah. Shipping confirmation. Actually from one brand, we had saw that shipping confirmation was generating a lot of revenue for some reason. So if you notify that customer and then maybe send them a link to check out another product or whatever it is, you might also see people coming in and end up buying the product. So yeah, those automated flows are a great, but you also have campaigns, right? Broadcast campaigns, what people usually find as spam. "Hey, don't send me any promotional offers," but those work really great. people always ask me, "What's the right cadence? Should I send once a week, once a month?" It really depends on your audience and how great your content is because it's not the channel, it's the content that people usually don't like.

Arri:

So if you're seeing high unsubscribe rates, that means that you need to redo your content, you need to humanize it. You need to send something that is unique, something that they're not seeing on your website, something that they have not received through email already, because what's the point of me subscribing to your text list if you send me an email saying the same thing, right? There's no reason for me to engage anymore because I've already seen that message. So when it comes to those campaigns, you don't have to do sales all the time. Every marketer that I talk to is like, "Hey, text is a sales channel. People send the same discount every other day." So you don't have to do discounts. I think marketers think that they have to do discounts, but you really don't have to. If you want to send content that is fun, engaging, you can do that. You don't have to offer a discount every single time. And you can see super high open rates, click through rates and conversion rates doing that.

Arri:

So I really think that, yeah, for your broadcast campaigns, if you're seeing high unsubscribe rates, find a different direction for your content. We've had a brand that was really skeptical about text. They were doing it, but they were kind of scared. They were sending one text every month. We took over, we started sending two text messages per week, and their unsubscribe rate went from 8.9% to 2.9% within four weeks. Although we increased the frequency, the content was better and they generated more revenue. So at the end of the day, if you do it right, it's going to be a great channel, you're going to get people engaged.

Brett:

Yeah. And what's so interesting about that, because I'll think about this from a consumer standpoint. Sometimes I'll sign up for a text service, and then if I don't hear from that brand for a long time, I may forget that I subscribed, right? Or be like, "I'm no longer interested in this thing anymore," right? If it's four weeks after I signed up, so I can see where the scenario you just laid out, where maybe if you're sending too infrequently, that increases the number of opt-outs right? Where if you're sending a little more often, and you're building that relationship and that community and the messages are fun and engaging, and maybe there's a combination of education and fun with sales, and then also new product launches and stuff like that, I'm assuming that's a great place to use text, and for events and things like that as well.

Arri:

Yeah. 100%. Product launches are great. That's probably my favorite part of text marketing because you have brands that are launching new products. What we typically do is we sending it early, maybe 24, 48 hours early to our text list, and some brands will actually sell out their products before even sending it to their email list. So if you do text marketing, right, and keep your list engaged, when you have those product launches, those promotions, they're just going to sell out quickly and you probably won't even have to send it to your email list. So typically, what I recommend is for a brand to keep their lists engaged. You don't have to do promotions all the time, but send out content that is relevant and fun. Use gifts. Gifts really help in keeping the user's attention for a lot longer. So instead of them just opening up the text and closing it, now they open it up, there's a flashy image showcasing the product. They know why you're promoting, and they're more likely to also click. So that's another hack that you can leverage for increasing your engagement.

Brett:

Cool, love it. Well, final concept, final topic here as we look to kind of wrap up, let's talk about optimizing, split testing, how do we get better and better? Because as marketers, that's we should be doing, whether we're running YouTube campaigns, or search and shopping campaigns, or Amazon ad campaigns, we're always finding winners, we're identifying losers, we're adjusting, we're tweaking, we're optimizing. What does that look like from an SMS standpoint? How are you optimizing and improving?

Arri:

Sure. Yeah. In eCommerce space, there's a saying that, "Set and forget it." I'm sure you've heard of it. So we tend to do the opposite. We want to set it up and look at it every single day. So split testing is a core component of what we do. And split testing allows you to really figure out, is it the messaging that could help me optimize, improve my campaigns? Is it adding an image, a gift? Is it the call to action? Is it the segmentation? Segmentation is a core part of text marketing. Especially if you're using Shopify, you have a lot of different segments that you can use. So I always recommend segmenting. And this goes into engagement, right? The more relevant the content is, the more engagement you get, the more revenue you're going to generate, So don't be one of those marketers who send out blanket emails to 500,000 people, get 8% open rates, and maybe half a percent click through rates.

Arri:

And that is because they're not segmenting. They're not trying to create different content that's more relevant. If you do that through text, you're going to get the same result. You're going to have that big list and you're going to have little to nobody engaging. So what we want to do is we want to segment, send more relevant content. And although you might have a higher frequency, you're going to see that the content's relevant and you're going to get more people clicking through and buying the product. So split testing is part of that too, for your automated flows, split testing. The times that you're sending, split testing, the copy, the call to action, scarcity, different components that you can really split test to figure out what's going to drive up the clicks, what's going to drive up the revenue per customer, and looking at data, right? Every text that we send, we like to add UTM tracking codes, because let's be honest, every platform likes to over report on the revenue.

Brett:

For sure. Every platform takes credit for one purchase. I've heard a lot of people say, "Hey, if I just added up all the conversions from all my channels, my sales would be double what they actually are." But that's just the nature of the platforms. You have to understand that nobody's being nefarious. It's just the nature of the way the platforms tracking works. You just got to know it going into it.

Arri:

Exactly. So we add a UTM tracking code so that we can double check in Google Analytics and see what the last click attribution in Google Analytics says, so that you can take a look at that data and really know what's working and what's not, because obviously the results would be inflated in the platforms. And using UTM tracking codes, you can really see the conversion rates for all the campaigns that you're launching, and then looking at the trends, right? I sent this text with my CEO holding the product, it's very humanizing versus a very salesy texts. What performed better? What made it perform better? And kind of taking what has already worked and then creating different versions of it and continuing to improve.

Arri:

So typically that's how we do it. Data is really important. And also sometimes in Google Analytics, you can create a user profile. Who's engaging with us via text? Because sometimes people think, "Hey, it's only people who are 18 to 22 years old that are engaging." Yeah, exactly, "that are engaging via text." And we have these brands doing over a million a month via text, and their audience is 55 plus. So it's not really a specific demographic that works. It's relevance, community, people who are engaging with your brand, that's what works. So that's another thing when it comes to data, look at that customer profile and continue to create content that's more relevant to them.

Brett:

I love that. Watch the data, always be split testing, always look to get better segmentation so that you can increase your relevance with your message and your offers. And it just works. I mean, when you put attention on these things you're going to improve your performance. No doubt about it. So, Arri, let's do this to where we're kind of wrapping up here. I'm sure there's a lot of people listening, saying, "Man, this is good. I love this. I've got to do better with my SMS marketing." Where does Converse Mart come in? So what can you do? How can you help people? Because I'm also guessing there's a lot of people watching and saying, "I like the idea of doing more SMS marketing, but I don't want to do it myself." So where do you guys come in?

Arri:

Sure. We come in. Usually when someone wants to work with us, they just want to offload everything to us, which we really love, because we want control of the channel. Usually what I don't like is when some, and then they try to tell you what to do. You hired the experts, do what they're supposed to do. So that's how we approach things at Converse Mart. So we come in from, you're picking out your platforms, subscriber migration, your strategy, your automated flows, the copywriting, the creative. We do everything. Hiring us is like 10 people at once to do your text marketing. So those are some of the benefits that you're looking at. So manage all of it, you really don't have anything to do besides approve the content, and we're very transparent with our brands, come from an eCommerce background.

Arri:

And at the end the day, revenue is what really matters for eCommerce brands. You can create beautiful looking text messages, a beautiful looking image. If they don't have to generate revenue, then who really cares, right? So that's the mentality that we're bringing for the brands. So revenue is always in the front of our mind. What can we do to increase revenue for these brands? And thus what we really focus on. So that's that for, we got into email marketing too seven months ago, and I know what you're thinking, "Hey, this guy, text marketing, getting into email?" Yes. Email is a great channel. Brands have requested for us-

Brett:

The two go together so well though. I mean, they just compliment each other. They work well together.

Arri:

Exactly. Yeah. So it just made sense for brands to offer as a service. So we're running the most lean and effective texts and email marketing services, helping brands reach their customers on those two channels. So we come in same way, fully manage white glove texts and email marketing service. So that's what we can help eCommerce brands.

Brett:

Love it. That's so good. So Arri, how can people best connect with you? Just through the website? On socials? What's the best way to connect with you?

Arri:

Yeah, that's my favorite question on any podcast. Go to conversemart.com, C-O-N-V-E-R-S-E-M-A-R-T.com. And you can reach out to me at arri@conversemart.com. That's A-R-R-I. This podcast could be eight hours long and I could be here talking about text marketing. So if you have any questions, feel free to reach out to me, I'm more than happy to help you out.

Brett:

Hit up the text marketing guy, the text and email marketing guy now, to rebrand that just a little bit, but yeah, reach out to Arri. Awesome guy, and can help you guys a lot. And so with that, Arri, man, thanks so much. Thanks for coming back on. It's been a lot of fun, and you're right, we could have gone another several hours and then this still would have been engaging.

Arri:

Awesome. Thanks for having me, man. It's always great to meet you.

Brett:

Absolutely. And so with that, as always, thank you for tuning in, and we would love to hear from you. So give us some feedback. What are topics you want us to dive into on the show? What do you like? What do you not like about the show? And with that, until next time, thank you for listening.

Episode 156

:

Jordan West - Little and Lovely

The Magic of Gated Launches

So what’s a gated launch? It’s a product launch that’s only available to VIPs or top customers.

How would you like to generate a whopping $250k in sales on a new product launch without running Facebook ads and without offering deep discounts? Sound impossible? It’s not. It’s the magic of Gated Launches.

So what’s a gated launch? It’s a product launch that’s only available to VIPs or top customers. While it may sound complex, it’s really not. It does take some work to build a VIP community. But, if you do it right, it’s actually pretty easy to maintain. In this episode Jordan West, founder and CMO of Little and Lively, a children’s apparel brand, breaks down how his gated launches have generated as much as $120k in sales in the first two hours after going live.

Here’s a look at what we discuss in this episode:

The psychology behind gated launches and why they are so powerful
How to build a healthy, vibrant VIP group that is low maintenance
How to foster the proper buying mentality in your VIP group
How to harness VIP feedback for new product development
The secret of using personalized 1-to-1 videos
Plus more

‍

Jordan West

Mindful Marketing “eCommerce Sales Launch Checklist”

Mindful Marketing Co

The Secret to Scaling Your eCommerce Brand Podcast

Little and Lively Clothing @ The Kindred Studio

Mentioned in this episode:

“Contagious” by Jonah Berger

Postscript

Attentive

Recart

Episode Transcript:

Brett:

Well, hello and welcome to another edition of the eCommerce Evolution podcast. I'm your host, Brett Curry CEO of OMGCommerce, and today we're diving into a topic that I am really, really excited about. It's something that actually I'll share with you in a minute. I saw this brilliant offline example of this years ago in a successful retailer, and since, I've never seen anything like it, until I met today's guest and heard what he's doing online. It's just fantastic. So we're going to be talking about VIP groups and gated launches. Totally psyched about. I'm so excited I'm slurring my words. We're going to talk about this.

Brett:

Delighted to welcome to the show Mr. Jordan West. Jordan is an eCommerce entrepreneur at heart building multiple brands. He's the founder and CMO of Little & Lively, which we'll talk about some today on the show. So with that, Jordan, welcome to the show, man, and thank you so much for taking the time.

Jordan:

All right. Thanks so much for having me. It's been great getting to know you recently, and I'm so pumped to be on your podcast. You're going to be coming on mine as well, so I think this is going to be the beginning of a great friendship here. I'm looking forward to sharing some hopeful nuggets for the audience to be able to use in their business.

Brett:

Totally. Yeah. This little teaser, I'm going to be on Jordan's podcast, which will be fun. Yeah. As you and I were prepping and talking about this, I just love these ideas. So excited for the value you're going to deliver here. These two concepts are very much tied together. I'll talk about my offline example for gated launches in a minute. It's an interesting one. I think it creates a nice mental picture, but let's talk about VIP groups first. Give me the why's and how's of a VIP group, and then we'll probably unpack a few things that are related there.

Jordan:

Yeah, totally. So I'll give you the whys first of all, and I'll give you the what actually to start. So what exactly is a VIP group? So a VIP group is basically any gathering of your super fans. Where do you gather them? In my opinion, the best place to gather them, and it really depends what type of business that you're in these days. I still think that Facebook VIP Groups are probably the best place to gather a VIP community. If you're listening to this and you're in business-to-business, Slack I'd say is that side for a VIP type group on the business side because everybody's checking the Slack all the time.

Brett:

All the time.

Jordan:

But consumers for the most part are still checking Facebook all the time, as far as what the data shows. So I like to gather VIP customers within a Facebook group. The algorithm still really favors groups on Facebook, and so it's a really great place to gather these subscribers. Some more whys of why these groups do-

Brett:

And then just to quickly to talk about something that you mentioned there. So you mentioned super fans. Ideally these are going to be, the most passionate, the most enthusiastic, and also the most ideal. These are your ideal customers, those that spend the most, stay the longest, promoted the most. Any other thoughts you would add to what a super fan is?

Jordan:

... So I'm going to have a quick little talk about levels of traffic. so we talk about this all the time. I learned this years ago. I think I originally learned it from the digital marketer guys about levels of traffic. So on Facebook and YouTube and all of these areas, we talk about five different levels of traffic. So cold, they've never heard of you. Two, those would be engagement audiences. Three would be people who viewed content. So they've gone to a product page.

Jordan:

Four, they've added to cart, and five they've purchased. It doesn't end there. It doesn't end with five levels. After that there's levels six, seven, eight. I mean, you can get into all of these levels. Basically level eight to me is those super fans who are actually going to stick up for you. They're the fans who are going to tell all of their friends about you, but if you just stopped at level five which is what everybody does, they stop at level five. They don't go beyond that and actually start to nurture their customers in a group.

Jordan:

There's a big difference between nurturing somebody with email sequences and actually nurturing them within a group where they're able to talk with each other. Lots of brand owners are really scared, like, "Oh, my gosh. There's going to be all this negativity." Wonderful. If you have people who are actual super fans, they are going to stick up for you within this VIP group. That's the beautiful thing.

Brett:

Now it's one thing for you to defend your brand and talk about why criticism may not be true. It's something entirely different if a customer of their own volition sticks up for you and defends your brand and defends the product. It's amazing, and there's nothing else like it.

Jordan:

It's true. We recently had some interesting staffing issues, especially around this COVID time. So we were getting packages out 10 days after people had ordered, which is crazy. I mean, normally it's next day, but we'd run a couple big sales. We're short-staffed, and it was taking a long time to get packages out. It was incredible because on the VIP group, some of the newer customers who had maybe only ordered once or twice that were in the group started to say like, "Oh, my gosh. Where's my package." And people would just stick up for us. We didn't have to do any of that for ourselves.

Jordan:

VIP groups in their own sense are incredible, especially on Facebook. We get about 10 to 20 posts a day, user generated content posts that reach about 3,000 people. We don't write those posts. That's people saying like, "Oh, my gosh. Check out my daughter in these clothes." Then it goes to two or three thousand of the VIP members just perpetuating the VIP group, and it's user generated content. It's not our content. So if this was just about VIP groups, I think the value is right there. Go start a VIP group today because there's so much value within these groups.

Brett:

Yeah. So how do you build a VIP group? How do you attract people to the group? Then I'm also curious about, how do you encourage, foster, develop engagement? Because the Holy Grail here is when people just start posting and it takes on a life of its own. But my thought is you probably can't just create a group and hope for the best. You probably helped engineer that and encourage that and fostered that. But first, how do you build it? How do you attract it? And then how do you manage it, so to speak?

Jordan:

Yeah. Yeah. Great questions. So we use a really interesting technique, probably the main way that we get people in is with personalized videos. Somebody orders from us the first time, we have a trigger that goes over. I'll let you know all the software that we use. It's no secret because it's very hard. I find ideas are fairly easy, and execution is very difficult. So I like to just tell people everything because we do some of these things as a service at our agency. So I'll just tell people exactly what we do, then it's like, "Well, you probably don't want to do it anyways, so just hire us."

Brett:

Exactly. Yeah, we totally do that as well.

Jordan:

Yeah. So from Shopify, when there is a new customer created, we have a trigger. We use Zapier for that trigger over to a service called Bonjoro which creates a task, a video task. We have one of our virtual assistants reach out to them with their name and what they ordered, and then we also say, "Hey, if you have any questions and you want to ask the VIP community, the Little & Lively VIP community, join our VIP group here." So we have a huge uptake from those brand new customers. The first time that they've ordered, they come into the VIP community.

Jordan:

We've already got people in there who are our super fans who are sticking up for us all the time, and it really, I think, helps them go into that level six, seven, and eight, where then they become those raving fans. It's incredible actually to see over the years the percentage of money that we're spending on ads comparatively to revenue. We have so much word of mouth now that it's exponential. We're always running a decent amount of advertising, but we've really had to with, especially because this is a made in Canada brand. So as far as manufacturing is concerned, we really do have limitations. We generally just sell out of everything all the time. So it's amazing.

Brett:

That's so amazing. I thought of a couple of Canada jokes when you said that, but I'm going to save those. Just kidding. I love it. We have some team members in Canada, great friend and clients in Canada. It's all good. So I just want to clarify what you said, because this is brilliant, and I really don't know anybody else that's doing it like you guys are. I see how it's feeding the VIP group. What you're saying is, I'm looking at the site now.

Brett:

So let's say that I order this, I'm looking at a bamboo/cotton flutter, really cute, pullover sweater. So what I would get then as an email from one of your VAs saying, "Brett, thank you. Saw that you purchased the bamboo flutter pull over. You're going to love it. If you have any questions about that or want to connect with our group, go here." So now it's two things. One it's-

Jordan:

But via video.

Brett:

... Yeah. Via video. Right. Which is crazy.

Jordan:

Yeah. Not just an email. This is an actual video which you will get.

Brett:

A video in the email. Yeah.

Jordan:

Yeah. We get about a 70% watch rate on these videos.

Brett:

70%. That's outstanding. So how do you execute on that? You talked about the software that was tied together, Klaviyo and Zapier and Bonjoro. Hopefully I didn't miss any, but then is most of that script then or most of the video scripted, and then there's just a few pieces the VA plugs in name, what they ordered, and then the rest is scripted?

Jordan:

Yeah. Exactly. Exactly. That's really the only way that we can do it is have a general script for them to work off of. We tried this with in-house employees. I thought, "Okay. Let's just try it for a little bit." It was terrible. They were taking 10 minutes per video. They didn't quite have the right angle. They're like, "I don't know if that's maybe the right video."

Brett:

Like 20, yeah.

Jordan:

So when I reached out to... I mean, my, my life is my assistance. I cannot execute on things, and so employees and assistants and all of that, I feel like that's one of my super powers is just finding people to do the right thing. So I found in our VA network somebody who is really interested in doing these videos, and so they can do about 40 of them an hour.

Brett:

Whoa. That's insane. I just wanted to highlight something because you mentioned superpower. You and I were talking about this before. I think, one of the greatest strengths of an entrepreneur is when you're self-aware. You know, what do I do best? Am I an operator? Am I a finisher? Am I a starter? Am I an idea person? And then putting the systems and the people around you to make you successful and to allow your superpower to shine, that's the formula. That's the secret, and you're doing that exceptionally well.

Jordan:

It's just a quick aside into strengths. We run all of our organizations based on Clifton Strengths, so StrengthsFinders. If anybody's ever read that book or done the test, we run all of our organizations. We manage based on strengths. So within Clifton Strengths they talk a lot about pointy people. That well-rounded people actually aren't the ones who do amazing, incredible things. It's pointy people who are pointy in those certain areas. So for me, my strengths are all around influence and relationship, and that's it. I have no executing strengths whatsoever.

Jordan:

It's interesting. I didn't mean to do this because we built our businesses before we started managing with strengths. I look, and there's one strength in executing called "the achiever." Every person in my life that is in my management, my wife, my business partners in every single endeavor all have achiever. So to me, I didn't mean to do it, but I think subconsciously I knew for me to get things done, big things done, I need that person to come alongside of me, grab that idea, and then execute it.

Brett:

Yeah. I love that. And then I love the idea of pointy people. I hadn't heard that, but I think it is usually pointing people to do something really remarkable and unique and different. For someone to be pointy, it means they're really amazing at something and probably really bad at a lot of other things, but that's totally cool.

Jordan:

Totally. Which is so hard.

Brett:

Yeah. I understand that.

Jordan:

It's hard as an entrepreneur. Especially, you're a person who sees success all the time, and it's hard not to... I hear people like, "Oh, I want to work. I want to know every part of the business." Okay. I don't. We're doing a couple of acquisitions right now, and my CFO is looking at these acquisitions. I'm like, I just want the high level. I just want to know, are there places we can plug into what we're doing? I cannot go in there and learn everything. I think reading a financial statement is incredibly important.

Brett:

Yeah. You got to do that.

Jordan:

But I'm not going to build out the model.

Brett:

Yeah. Totally smart. I think that's the way you have to do it. So, okay, awesome. So you're sending these personalized videos via email. Brilliant. 70% view rate on those videos. What else are you doing to build the VIP groups? I'm guessing that's the biggest effort and that has a really high success rate, but are you doing anything else to actually build the group, attract new members?

Jordan:

Yeah. The only other thing that we use is we use a pop-up for when somebody has purchased at least once on the website when they come back the next time. We have one pop-up that says, "Hey, join our VIP group. We noticed you've already purchased."

Brett:

That's amazing. What tool do you use for that?

Jordan:

We use Wisepops for that.

Brett:

Wisepops.

Jordan:

Really great tool. A little expensive for just a pop-up tool. It's about a hundred bucks a month on Shopify for the traffic level that we're at, but honestly, it's worth its weight in gold just being able to segment out so ridiculously easy. Especially when I don't want to become an expert in all these tools, and I don't want my staff to have to get a university degree in a pop-up tool.

Brett:

Yeah, exactly. Yeah. Yeah. Yeah. Totally makes sense. So I want to get into gated launches in a minute because that's super fascinating, but then let's talk a little bit about the management of the group. So how do you foster and encourage engagement? How do you manage it? Because it's not going to manage itself. So any tips or ideas on the management piece of it?

Jordan:

Yeah. Great question. So honestly, probably only had to do it for about the first three months, we had a daily post scheduled. I would just solicit responses. So first of all, before you do this, know your audience. If you don't know these people inside and out, you're probably going to have a really hard time with a VIP group like this. So first thing is just know your audience. For us, I'm saying this with all absolute love. Our audience for this brand is hipster, Christian moms. We really know that that's-

Brett:

That's amazing.

Jordan:

... I'm not saying they're all Christians. It's just this is like-

Brett:

Yeah, I get that. That's the persona. If you had to, I think one of the things you have to do in marketing-

Jordan:

... You can picture them.

Brett:

... Exactly. You have to build a picture of them, and that's the thing with marketing. Some people are like, "Oh, you're stereotyping. You're doing this." But you have to do something so you can picture them in your mind or else you're just talking to a demographic, and that doesn't work. You need to talk to a person.

Jordan:

Totally. My wife was quite insulted actually when one of our employees pointed that out a couple of years ago. She was like a 20-something working for us, and she's like, "Man, it's just only hipster, Christian mom's that come and pick up their orders." We're like, "Oh, my gosh. That's brilliant. Of course."

Brett:

That's it. Yeah. Yeah. I love that. When you have that picture, then that also says, "Okay, what should we do next? What tone or flavor should we put on things?" Well, hipster, Christian mom does help define that, and then it does help you make decisions.

Jordan:

It does.

Brett:

It's a useful, avatar to have there for sure.

Jordan:

Totally. Totally. And I think having a general avatar is really, really important, especially when building a community. These two new brands that we're acquiring right now, they're both outdoor brands, and they're really big for the environment. So I'm going to need some shorthand to really remember who this ideal customer persona is the same way that we know it at Little & Lively and our other brands that serve that same customer.

Jordan:

So yes and know your customer. Then ask questions to solicit some sort of engagement out of them daily. So that's what we were doing is every single day we were asking a different question just to start getting their opinion on things, see where they're at. We try and keep everything apolitical, especially in 2020. There's just no need to-

Brett:

Totally. You have to. Things just get nasty if you don't.

Jordan:

... Yeah. And we're predominantly Canadian too. So we're just like naturally apolitical.

Brett:

Yeah. You guys are beneath us geographically and all that. Hey, we're not going to get into your political nightmare. So yeah, exactly.

Jordan:

No. No. No. We just have popcorn and watch. That's all.

Brett:

Oh, man. That's fantastic. Yeah. And I mentioned I probably phrased that somewhat incorrectly in the beginning where I said it won't manage itself. Actually probably over time it does, but in the beginning though, you have to get it going. That's where what you said comes into play. You've got to seed it. You've got to get engagement. You've got to be engaged. You've got to understand your audience. So you've got some work to do there, and then so you were really active there for three months or so. What do you guys do now to foster engagement, or do you mainly let the group do its thing?

Jordan:

Yep. We do nothing, nothing to foster engagement anymore. Now it's part of what the group's about. People will see other people posting their cute pictures of their kids in our clothing, and they'll do the same things. For us, we don't have to do that anymore. It's like a ball that's been pushed down a hill. Every once in a while we'll just come in and add to the conversation, and that's really what it comes down to. We get incredible insights from this VIP group. A really great example was at Christmas time we were going to release two new graphics, and one of them had done really well two years ago. It said, "Merry Christmas, you filthy animal."

Brett:

Love that. Home Alone.

Jordan:

And it was a picture of of a raccoon. Yeah. So it had the Home Alone. It had the raccoon, and it had done really well a couple years ago. For some reason, it just did not resonate this year with our audience. Yeah. So we asked. We said, "Hey, these are the two." And we're doing it a little bit as a teaser as well. like, "Hey, what do you guys think about these?" Well, everyone said they hated both of them, and by everyone, I mean, we had 200 comments. We had it as a poll. Most people were saying, "No, I don't like either of these." Oh, my gosh. This is incredible insight. Thank you everyone. We then went back to the drawing board.

Brett:

And while that feedback hurts, it's way better to get it now than if you had produced one or both of these and then people are like, "Yeah. I hate those. I'm not going to buy this."

Jordan:

Totally. I hear this from other business owners sometimes, and everybody... Sorry, I shouldn't say everybody. What I hear the Steve Jobs god idea, where Steve jobs was that one guy who-

Brett:

He didn't need a focus group. I don't either.

Jordan:

Yeah, exactly, where he could just go in, and he would just do it. He'd tell the market what they want. Guys, there's 8 billion people in the world, and there's two or three people who do that. But the majority of us, we actually need to ask our customers for feedback. I prefer feedback that ends in my bank account much more than me thinking I'm correct and then sitting on a bunch of inventory I can't do anything with.

Brett:

Totally. It's also part of the reason that worked was, one, because of Steve jobs, and you're right. Very few people can do that. But also because he was creating new technology. No one could articulate the iPhone because they had no idea that that was possible. So of course, if you're creating new technology, you got to tell the market what they want. When it comes to t-shirts and stuff, you probably want people's feedback. In clothing, you want people's feedback. Feedback is ..

Jordan:

Totally. Yeah. Otherwise, you're going to be sitting on all this inventory. So we pivoted right away. The next day we put out two new designs. So that's one of the things that my wife still does as CEO there. She still designs, which I think is very important for that particular company. We thought, what are the roles she can get rid of? Designing is one of those ones that's really interesting because it really is the brand. It's a lot harder to teach. So she came back with two new designs. The group loved them, and we sold out within half an hour doing a gated launch as well.

Brett:

Amazing. Kudos to you guys for doing that. Kudos to her, because I know some people that are really good at designing, they also have that same mentality of, "Hey, I'm an artist. Don't tell me what's good and what's not good." But to have that ability of saying, "Here's something that I created that I love. Oh, you don't like that? Okay. I'll do something different." Then you find a winner. So kudos to her. Kudos to you guys for doing that.

Brett:

So this is a great time. Let's transition into gated launches. So probably people have a bit of a picture in their mind of what this is. We've talked about launches before, talking about launches using crowdfunding and all kinds of other launches, but let's talk about what a gated launch is. Then I want to give an interesting offline example that I saw years ago that I think creates an interesting picture, and then we'll get into the how you do it and some of those things as well. But what is it first?

Jordan:

Cool. Yeah. So I did not make this idea up. I think it was 2016. I remember reading Contagious by Jonah Berger. I remember it was 2016 because I went to Disney World. No kids, my wife and I just went on our own. I remember eating this book up. I'm like, "This is incredible," just about how things go viral. So he was talking about this clothing brand, this online clothing brand, that was doing terrible. People just really weren't resonating with it, huge bounce rate. Everyone was leaving the site.

Jordan:

So they thought, "You know what? We've got a big list. What's the worst case scenario that can happen? We're going to go bankrupt." They're already on their way to going bankrupt, and so they decided to password protect their site. Then every Friday they would do a new launch, and they would give the password out, a specific password that day. So nobody could enter the website without it. So being the non executer that I am, I read that, thought it was an amazing idea, told a bunch of people about it and then nothing ever got done.

Jordan:

So this last year I remembered the idea, and I'm like, "Huh. This could work really, really well for our store." we've got this 8,000 person group. We'd started to build an SMS group alongside of it as well, so we were doing interesting things with it, I thought, interesting things. I still think they are where we'd give SMS and VIP group only discounts. We could see like, "Oh, cool. 500 people used that discount. That's incredible." That was cool, but this really took it to the next level. So what we do is we password protect the site for 12 hours. Nobody can enter the site before that, and so this is especially for big sales and big launches. Then the day of the sale-

Brett:

Just a quick question. When the site is password protected, do you have the option for someone to sign up for the VIP group, or do you push sign ups?

Jordan:

... Totally.

Brett:

Okay. All right. Great. Right.

Jordan:

Yeah. Totally. Yeah, so if they want access, then they can either sign up for the SMS group or the Facebook VIP Group. So we'll get tons of signups on those days, from people who are like, "I can't access the site."

Brett:

I want what I can't have.

Jordan:

So for generally, we'll do either an hour or two hours, depending on what the launch looks like. I'll walk you through our big launch that we did in August. So this was no discounts, no Facebook ads, no Google ads, nothing. This was just to our lists. For about two weeks before we let people know, "Hey, we're going to be launching this new collection." It was our fall winter collection. There's all these new designs. "If you want early access, you guys know we sell out. If you want early access to it, join these groups."

Jordan:

So at 10:00 AM Pacific that day we released the password, and it was crazy. We had within a minute 3,500 people on the site. So I just want to walk through a little bit of the psychology behind it. People come to the site. They have a special password that they have to enter. I call it... I remember hearing this word years ago and thinking it was so nerdy, but it's a Rubicon. It's something that you can go through a door you can go through, but you can't go back.

Jordan:

In somebody's mind. It's that micro-commitment that you don't want to go back because you've already entered this password. You're now in the special club. It's like going into a nightclub and, being like, "Hey, there's no ins and outs. Once you're out, you're out." And so it's that same sort of-

Brett:

You've got that velvet cord, the security guy's letting you in. It's it's a big deal. Yeah.

Jordan:

... Totally. So within that first two hours, I think we did about $120,000 of sales. I was like, "That's incredible."

Brett:

Winner. Onto something.

Jordan:

We've had sales like that before, where we're doing a 20% discount or something. We don't discount too often. So we've had sales like that, but never long lasting like this. We ended up doing about $250k, just over $250k in that 24 hours, and then it was incredible because we weren't running ads this whole time. So 12 o'clock, we actually opened the website up to everybody, but there was all this buzz around it. The next day, I think we still did like $50,000 in sales, and the next day $40,000 in sales. An average day is generally about $10k-ish, somewhere in there, or it was at that time.

Brett:

So 25x when you did the gated deal, and then the residual impact was even like a 5x growth a few of those days.

Jordan:

Yeah. And by the time, I think it was about two weeks later that we actually caught up on orders. So we started advertising again, and it was incredible. I mean, this entire year... I hate to give numbers like this, but our return on ad spend this year on Facebook alone was 10.5, and I was spending ..

Brett:

Which is an insane number, by the way. Yeah. That's just crazy high.

Jordan:

I don't believe it, the attribution. I'm a real attribution skeptic. So when I say that number, I'm like, "Yeah." But the reason why we had that was because of these communities that we're born. So we had these touches with customers all along the way. I love that today is Facebook apocalypse with iOS 14.

Brett:

You're positioned well to still succeed through that.

Jordan:

And any of our clients as well, because we're not doing some quick cash grab on Facebook. We're trying to build audiences here. We're trying to build people up into and getting to know our brand. So the whole iOS 14, I'm like, "Yeah, sure. For the drop shippers who aren't building a brand. Sure. Maybe that's going to matter to them." But to me, a seven day click and one day view attribution is wonderful. That makes a lot of sense to me. So, go ahead.

Brett:

You're not going to lose any ability to build a community and to connect with people in a real way and to offer some of these things that people really want. So that's, first of all, brilliant, and, man, there's nothing wrong with, in fact, I think it's one of the greatest things in business and in life is to identify an idea, see someone else doing something, and think, "Ah, I can do that. I can do something like that. So I'll create my own version and put it together."

Brett:

And to your credit, I talked to a lot of people about launches and I'm around a lot of smart marketers. I haven't really heard anybody talk about doing what you're doing, but when you mentioned it, I did immediately have a flashback to days gone by. When I first got my start in marketing, I owned a small ad agency, and I worked with this piano dealer. So this piano dealer, they did something similar-ish, but it was all done via like TV, radio, print. They did what they called the closed door sale. So usually they would say, "Hey, we've got this inventory. It's limited." And they would usually use discounts too. We'd have a discount. But, "We're closing the store."

Brett:

So they would even in the TV commercials have security guards standing by the door, door's closed. It's by appointment only. You can only get in to see the inventory if you call and schedule an appointment. And when you get here, you have to be ushered in. You're just going to meet with a salesperson. They're just trying to make a sale. But it's this whole idea, and there's a little bit of gimmick, some gimmickiness to it. I got to write some of the ads. It was fun.

Brett:

But anyway, the whole idea was, "Hey, if you schedule an appointment, it's because you're going to buy." You're you're being ushered in. You're going behind that velvet cord. The security guard's letting in that, not so you can just kick the tires and negotiate on price. You're going into buy. So their closing ratio was incredibly high, and they would do over the course of a day or two, maybe what they did in the previous two months.

Brett:

So it's something they couldn't do it too often in that regard because it was pianos and market, but I could see where you guys could do this regularly with the launch of new additions and new products and things like that. So really fantastic. There's a lot of psychology that goes into this. What brilliant idea. Kudos to you.

Jordan:

And it's replicable is one thing I wanted to let you know. We've done this multiple times since then, no more than once a month. When we released our Christmas collection, sold out within 30 minutes, and that was our bad for not ordering enough. We didn't realize the demand. We're like, "Oh, I guess, I mean, this is quadruple the demand from the year before."

Jordan:

We did it for another sale, again, I think in the first hour this time we did about $120k. One thing I want to let people know is that we're on regular Shopify. If anyone ever thinks that you have to go to Shopify Plus... One of the brands we're acquiring is on Shopify Plus. They do a lot less revenue than we do in our business. I'm like, "Boom." I'm slashing $2k right there.

Brett:

Yep. Yep. I think it's not just an automatic, "Yes, we need Shopify Plus. Right. There has to be a real business reason for it.

Jordan:

Sometimes it makes sense even with the transaction fees, that sort of thing. I'm just saying a lot of people think that they have to go to that level as soon as they get to a certain revenue number, and I'm like, "Well, I mean, for that $2,000, you can do a lot of stuff with that." You may not have to.

Brett:

Create a real business use case for us, not just an automatic yes, that we need to move to Plus. For sure. So that's awesome. You've replicated, duplicated the success in many different areas. Do you feel like this idea could apply to just about any eCommerce business, and what other categories have you seen it used in?

Jordan:

So really, really good for people who are doing launches often. So if you're not doing launches often, probably not the best, but you can do it once a year. For products that aren't morphing and changing, I don't see the use for it, unless you're using it to run a sale. In which case I think that it's a great idea.

Brett:

But then again, if all it is, is a discount that it could kind of run its course quickly. That's where maybe you do it once a year, twice a year, something like that, if all it is, is a discount. But where you guys are using it as it's the launch of a new product, a new style, a new design, something like that; and with that, you can do it pretty often.

Jordan:

Totally. Totally. And that just really means that we're just releasing new items all the time and iterating. It really helps us, and it's something we're bringing into other businesses we're buying because we just know how well it works. There's certain customers who will buy every single item you put out there, and so it's really powerful to be able to continually release items and then get that feedback. Maybe it'll then become a core part of your collection.

Jordan:

I think that there's a lot more use cases other than just fashion. Fashion is a really easy one because it changes so often. I mean, we're definitely in slow fashion. We're not a fast fashion brand at all. None of the brands that we're acquiring are fast fashion, but slow fashion, still, people want new things. They want new colors.

Brett:

They want new. They want different. They want to be not exactly like the mom's down the road and their kids and stuff. We all want to look a little bit different. So any tools or technologies you would recommend if you're going to run gated launches or gated sales? Any tips or suggestions there?

Jordan:

Yeah. As far as technology is concerned, you really don't need much. You need a good SMS platform, so Postscript or Attentive would be those. Building up your SMS list, so for me, I love Recart for that. Recart has an absolutely wonderful pop-up that they use to get subscribers, so they get messenger subscribers and SMS. Some things to note on the SMS side is I think Attentive is a little bit better than Postscript, but your messages don't get delivered right away. So know that there is going to be a little bit of a time lag, and then Facebook groups. That's the big pre thing. You're using Facebook's technology for your group. I do not recommend making a private group on your website. No one's going to go there.

Brett:

Exactly. No, one's going to do that. They're already on Facebook. Yeah. Yeah. Go where people are hanging out. Make it easy for them, and you guys have certainly done that. Well, this has been absolutely fantastic, just amazing, Jordan. Really appreciate it. As people are listening to this and thinking, "Okay, I need to dig in a little bit more. I need more resources, or maybe I just want someone to run this stuff for me." how can they connect with you? How can they either learn more from you or maybe hire you to do some of this stuff, if that's even an option. Talk to that a little bit.

Jordan:

Yeah. I am the CEO of a Facebook Ads marketing agency that also deals with this kind of strategies, so we're mindfulmarketing.co. I actually also have a checklist for this. So it's a sales launch checklist. It actually runs through, I think it's 36 steps that we do before any sales launch that our team uses to make sure two weeks out what we're doing. So you can get that one at mindfulmarketing.co/sales-launch-checklist.

Brett:

Awesome. I'll link to all that in the show notes as well.

Jordan:

I thought about changing the URL.

Brett:

Yeah. Yeah. It's all good. So people can ..

Jordan:

Yeah, so then-

Brett:

Go ahead.

Jordan:

... Yeah, exactly. And then I was going to say, for me personally, I love connecting on LinkedIn, true meaningful connections. I take anyone's connection request because it's just smart to do. I don't mind if somebody tries to spam me. I just ignore their message. So I don't mind, but from podcasts, I've had probably in the last month alone, I've probably had like a hundred reach-outs of people being like, "Hey, I heard you on this podcast and want to connect about this." So for me, I really do try and add value to people on LinkedIn. If you just search "Jordan West marketer," that's where I am on LinkedIn.

Brett:

Fantastic. I will link to all of that, including the resources, in the show notes, so you can check that out at OMGCommerce and look for the blog or just search for eCommerce Evolutions. So I'll link to everything, and also connect with you on LinkedIn if we're not already connected. I can't remember, but, man, my wheels are turning. The ideas are flowing. This is really good stuff, Jordan. Thank you so much for coming on. This has been awesome.

Jordan:

Well, it's great to get to chat with you, especially somebody who's an expert in this space like yourself and tell you an idea that you haven't heard before.

Brett:

I know. This was the first. I dig it. I totally dig it. So kudos to you. Excited to be on your podcast. We'll have to consider round two here at some point as well as we get a new spin on this. So with that, thank you, Jordan, and also thank you for tuning in. We love to hear from you. What do you like about this show? What topics suggestions do you have? Hey, if you haven't already leave that five star review on iTunes. Makes our day, helps other people find the show. And so with that until next time, thank you..

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Episode 155

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Shawn Livermore - Author, Average Joe

Moving Fast by Moving Slow + the Myth of the Tech Genius with Shawn Livermore

In this episode I interview Shawn Livermore, author of the new book Average Joe: Be the Silicon Valley Tech Genius.

If you’re like me, then you're fascinated by the stories of “tech geniuses.” I never get tired of hearing the origin stories of great tech startups and geniuses behind them (The Social Network is still one of my favorite movies). In this episode I interview Shawn Livermore, author of the new book Average Joe: Be the Silicon Valley Tech Genius.

Shawn’s new book uncovers some of the magic behind blockbuster tech products like Gmail, Dropbox, Snapchat, Ring, Bitcoin and more. We bust some long-held myths and underscore how you can learn from the success of tech icons. Here’s a look at what we cover:

How moving slow is the new fast in some key areas.
How believing you have to be a genius to succeed in business (even tech) is a myth.
How to properly incubate ideas and allow your brain to work the way it works best.
The story of Gmail and it’s creator Paul Buchheit.
The story of Polaroid and how to innovate.

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Shawn Livermore

“Average Joe” by Shawn Livermore

Product Perfect

Mentioned in this episode:

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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, CEO of OMG Commerce. Today I've got a treat for you. We are talking with the author of the Amazon best selling book, it's a nonfiction book, Average Joe: Be the Silicon Valley Tech Genius. Really excited about this topic and really excited about this guest. If you're ready to finally scale with YouTube ads, I have a free exclusive event just for you.

Brett:

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Brett:

You can also ask your burning YouTube ad questions to our expert panel. As a bonus, fellow podcaster and eCommerce expert Kurt Elster, will be talking about landing page optimization, to add fuel to your customer acquisition efforts. When you sign up today, you'll also get access to the replays. Check it out at OMGcommerce.com under events, or visit the show notes for this episode. Now, back to the show.

Brett:

Mr. Shawn Livermore is my guest hailing from Orange County, California, and we were connected through friend mutual acquaintance, and then digging into understanding what Shawn created with his book is really about teaching anyone to think, speak, create, like some of the brightest tech founders in the world. Also, this is important, we're going to dive into this, it dispels the myth of the tech genius. Because I think there's this hero worship, I'm using Shawn's language here. There's this hero worship around the tech giants, Bezos and Musk and those guys. But really, that's probably just a myth. Right?

Brett:

So, we're going to dive into that a little bit, and some topics that will directly relate to any entrepreneur and will certainly put a spin on it, that would be perfect for you as an eCommerce entrepreneur as well. So with that, Shawn, welcome to the show, man. Really excited to have you on, and thanks for taking the time.

Shawn:

Thanks, Brett. Happy to be here.

Brett:

Yeah. I would love to hear you define what is this myth of the tech genius, and what was the inspiration to write this book and meaning this topic?

Shawn:

I'll start at the end and go back to the beginning. So the spoiler alert ... The myth isn't real, but in a strange and yet very satisfying twist, you can become the myth yourself. Right? So, we worship these fake façade veneer of brilliance, and yet, you can actually create your own veneer. So the book takes you through that smelly tunnel of transformation to learn how to take the data and the information and the work you're already doing on a regular basis.

Shawn:

And turn that into a crystallized message that invokes all of the inflections that gathers together all the very deep and important subject matter that your hands have been working through the clay for many years, and formulate that into the least amount of words that an investor, a family friend, a spouse, coworker, peers, or potential recruits that you would bring into your organization, that they would all hear that messaging and that they would be transformed by it, and truly fascinated. That is the end result of the whole book, is to achieve fascination.

Shawn:

So, we have a slow crate framework, this model of a canvas, a pipeline and a triad that helps you learn how to plot out your ideas to work them through some neuroscience enabled processes, and then flatten them out into a pipeline and then process them out into a triad where you learn how to bubble up the right words and focus on the right things and achieve that fascination model. But going back to your question, so this myth of the tech genius, this is this idea back in 1840, Thomas Carlyle, a Scottish philosopher, had come up with 20 volumes around 80,000 words on this idea of hero worship, and that great man theory is what it's called.

Shawn:

So this distorted reality, this idea that these certain people, not everyone, and that's the key phrase, is not everyone, but we seek to find those few and make them our kings, we seek to promote them. Why do, for hundreds of years, we elevate and venerate and certain norms of society have been acceptable, even today we have monarchies that we still honor and pay homage to, and they have influence. Right? So why do we do that? There's a little bit of quackery as Carlyle puts it, in this process that we entertain ourselves with it. Right? It's, "Oh, look, what did Megan and Harry do?" Right?

Brett:

Yeah, yeah. Interesting. We've always done this. Right? I mean, you look at the myth of Greek Mythology and true hero worship back in the day, but do it the same whether it was Edison around the time, as the author you just mentioned, or present day, Bezos and Elon Musk and Larry Page, Sergey Brin from Google and that sort of thing. So, you think part of this is like we're looking to be entertained a little bit and looking to be fascinated?

Shawn:

A little bit. I mean, Carlyle even put it, we see it as a necessary ingredient and an amalgam for truth. Right? So we ease ourselves into this false reality and we get comfy there. But I think it's very dangerous as you look at the tech industry, those in or nibbling around the edges of the tech industry, we seek to have this binary answer, "Am I or am I not a tech genius? Do I have the magic touch? Can I spew out magic dust? Right? Do I know how to impress investors with my brilliant ideas?" Come to find out all that's nonsense. Right?

Shawn:

The brilliant ideas, they're looking for good ballplayers, the analogy of an investor looking at an entrepreneur is very much like a scout looking at baseball player, male or female, let's just put the gender aside. But this idea that they looked at people like Ken Griffey Jr. and I have quotes in the book about it. Just fascinating stuff. I love baseball. I use one of these to-

Brett:

Nice.

Shawn:

... help me think. But the idea of Ken Griffey Jr. as he was being scouted, they said, "He's too eager, he's too hungry for the long ball." He would lean forward, he would lean back, and he'd do some weird things with his hands. They have all these quotes that I put in there. Some of the scouts hit it right on the money. They knew raw talent, and some of these investors, they also know raw talent, and they can size you up and get a sense for where you're at in your journey as an entrepreneur. But at the same time, they say some really interesting things that make us entrepreneurs feel like we're being binary tested. Right?

Shawn:

I've been through TechStars, and amplify Los Angeles and some other incubation programs. I know the process, I've raised money six times, seed money, which is the hardest type to raise130 times. I have a little bit to say about this process of engaging with investors, and a lot of it is irrational. As much as they want to put forward to their partners, a very rational, sustainable, defensible position about why we're investing money into these founders? There are many times where it's not even the business, they could care less about the current business that those founders are working on. They love the people, they just look at that guy and they're like, "That's a winner, I want to invest in that gal or that guy."

Shawn:

So there's this belief mode that they go into this contrarian belief mode, the CBM, I call it, and there are many instances of this. I put in the book many examples of where the common practices are thrown out the window. Then we have folks like Tim Draper, who had a great quote. I love Tim Draper, has done a lot of good for the community, and yet there's ... as with any good ballplayer, you're going to strike out a few times, and there's been a few strikeouts on his record as well. Some of the things he says though-

Brett:

And then Tim Draper, for those that don't know, what did he create?

Shawn:

He's invested in a lot of early companies and had great successful venture capital fund in the Valley, well known. He also invested in Elizabeth Holmes company.

Brett:

Theranos?

Shawn:

Theranos, yeah.

Brett:

Well, that's a fascinating podcast series. There's been some documentaries, which I haven't watched, but yeah, talked about fascinating study in the human behavior and then talk about myth of tech genius. She created some strong mythology around who she was and what company was, that for sure

Shawn:

Yeah, without a doubt, and he invested into that and then he made a quote either before or after that, I'm not sure. But he made a quote on one interview that really struck me when we were doing the research for the book. Almost stopped me, ready to put my head in my hands and just shake it and cry a few tears. But he said, "The investor is looking for the entrepreneur ..." Let me quote it properly, it's in the book properly. So forgive me if I miss quote it, but he says, "A great entrepreneur is like a magician. He in essence is creating something from nothing in a groundswell." Right?

Shawn:

I look at that quote and that idea and that belief mode that they go into, and I feel like that's unsustainable and unfair. I feel like, from the entrepreneurial standpoint, we go on these accelerators and we learn how to not be magicians, we learn how to be pragmatic business people, where you have a gross sales and profit, and you're trying to bring a little bit of sense to your madness, or the caffeine and sugar is detoxed out of your system or the hype and hustle is taken away and extrapolated, and what's revealed under all the armor, the emperor has no clothes .. right there.

Shawn:

There's nothing there, but hype and hustle, and so they reduce you down to your first principles or your bare bones and you learn business, and you learn how to be successful from a building block perspective. And yet, you put yourself in front of these investors who ... that's a given, they already know that, that already should be there, and you should have good numbers and unit economics and all that. But they also want to see the magic dust. So then you have to learn how to fabricate, but that's unhealthy. Vegetables, that's cheeseburgers. Okay? You can't keep fabricating stuff, you can't keep living on hype and hustle.

Shawn:

So, the book teaches you how to ... and the research, it teaches you how to manipulate the facts into a shape that goes into the hole. Right? Not manipulating facts in terms of twisting facts, but taking all the data on the effort and funneling it properly. So no water is lost, you're just putting the water through the proper propulsion system so that it goes into the right shape, and gets the fire and achieves the goal. Hope that

Brett:

So making things digestible, consumable for that investor in the seed round where ... I've never gone through that, by the way, successful entrepreneur, building a large team and growing, but never have done what you've done in terms of raising money. I think there's always value, you want to be authentic. Right? So I think people can sniff out when you're being inauthentic.

Brett:

But if I'm understanding what you're saying, if I'm hearing properly, basically you're packaging what you've done, who you are, what you bring to the table, in a way that the seed investor's going to get, it's going to be palatable for them, and they're going to say, "Ah, this person has what it takes or this person has what I'm looking for."

Shawn:

Yes, but it's a matter of thinking first. Right? So, my goal is to help anyone, even the average Joe, think, speak and create, like one of these tech geniuses. Right? So it starts at thinking and the structuring of our thinking is actually quite important. We don't think about thinking very much. Do we? We don't talk about thinking very much. We just do it. Right?

Shawn:

Yeah, totally. So you go to the doctor and they say, "Well." You say, "I have running problems, I can't run well." They say, "Well, how do you run?" "I don't know, I just run." Right? But there is actually a science to running, where your foot has to come down a certain way, and then your leg should push a certain way, and then your hips should be a certain way. There's this mechanical model to everything we do. So, thinking has a lot of mechanics. Right?

Shawn:

I worked with a neuroscientist, Dr. Jesse UCLA for several months here in the COVID time period and on Zoom sessions, and feel like I got a master's in neuroscience out of it. He really mentored and coached, and it really helped us formulate this framework. So, the ability to think in a structured model is critical to everything I do. I have my canvases and pipelines and I work them through the triad, and even in small conversations about renting office space or recruiting candidates. There are things that you think through systematically that you can bring out the other side that left brainers like me, who maybe don't naturally feel comfortable communicating.

Shawn:

I've learned how to try to communicate better, but it all starts way back here in the early inception process of the words and how they culminate together and string them together into sentences. It's actually not so easy for all of us to speak. Right?

Brett:

Yeah

Shawn:

You're doing a great job on the tech side.

Brett:

Sure.

Shawn:

Programmers are known for their communication.

Brett:

No doubt. So dive into that just a little bit. I fully agree with you that the way we think, the way we speak to ourselves, the way we structure our thoughts, critical. Right? Everything else is built upon that. Where do you think a lot of entrepreneurs go wrong with their thinking? What are some of the shifts or tweaks that need to be made? I know we can't unpack the entire book or anything like that, but what what are just some of the the shifts people need to make when it comes to their thinking, related to being an entrepreneur?

Shawn:

Question, Brett. I think that's two areas, one is the plotting of ideas. We don't plot, we don't take what is up here floating in the ether and put it onto paper. If we do, it's a sticky note, we put it on the monitor. There's a pile of papers on your desk, and you throw them all away at the end of the year, or whatever. The plotting of ideas into a systematic canvas is step one, and that's very beginning of the slow creative framework.

Shawn:

Number two is, it really comes into how we operate, the mind is unfortunately, used like a vehicle, we slam on the gas, and then we slam on the brakes. We go from meeting to meeting to meeting to meeting, and there's no gaps. Right? So our mental health sucks, especially with COVID. Everyone's at home, dogs are barking, kids are crying, things are falling, our pets heads are falling off, like in Dumb and Dumber. Right? Everything's going crazy. Right? Our mental health is in the dumps. But even if you get back to the office, you really ... Dr. Risman talks about this period of lag, and then in a couple of great books, it's been repeated over and over.

Shawn:

He said, "Your mind needs a slowdown period. Right? So, 10 minutes after a meeting, go take a walk. After reading a chapter of an audio book, sit in silence for 10 minutes and ponder what you just read. Allow your mind and the neural pathways to cement, and in that, derive a couple of words, put them on to your iPhone and in your notes and rehearse that or scratch them onto your canvas or put them however you need to to rehearse those words that represent all that couple hours of learning. The dust settles in a way that is recoverable. If the file is not saved, you'll lose the document. Right? So, you need to save the file.

Shawn:

Those two is part of neuroscience. Yeah, it's not something I invented at all. I'm just gathering the data and answering the question, but it's out there. This is critical stuff to practice.

Brett:

Yeah, really interesting. We do, man, I think we almost feel good about being hurried. Right? You mentioned, as we're prepping, hustle, and we all want to hustle and grind and go for it. So that's almost like a badge of honor that wear that we're all hustling and we're going for this thing or that thing, and always hurried. But man, if you don't have those few minutes to slow down and think and let the dust settle, I hadn't heard that, or rehearse some of things you've just learned, then you're really missing out. Right?

Brett:

I would say that a lot of us, for being honest, could step back and say, "Yeah, my mental health does suck or I'm sub optimal, because I'm not doing some of the things that you're talking about."

Shawn:

It's so true. Then that dovetails into creativity, where if you don't allow your mind to ideate and germinate on certain topics, you're not going to develop those. Right? So it's one thing to say, "I have an idea." It's another thing to say, "I've been incubating this idea in a systematic manner." Right? And not just in a void, but pulling in input from different sources. In 1949, Eliot Hutchinson narrowed in on this very specific idea of creativity, and he created this model of creativity.

Shawn:

Then part of that model, is this wall. He called Hutchinson's Wall, and it's that wall of the blank canvas problem, it's that wall of, "I am not getting anywhere, I'm stuck." And so many entrepreneurs are out there, working through a couple ideas, but they get to that wall and they stop. Instead of trying to climb the wall, the book and the research that we found, tells you to dig under it, in that you get into this mindless work model of drifting and daydreaming. You may say, "Well, I thought this podcast was about tech entrepreneurship?" "Yeah, it is." "But this is a big part of that, isn't it?" That we're all staring off out of the window and into space sometimes.

Shawn:

But that's good. You need that meditative drift in your life so that you can take a step back and very carefully allow your brain to untangle the spaghetti.

Brett:

Yeah. I love that. I heard from a really successful CEO, I don't remember, I'll probably just be making this up, but Jack Welch maybe, or someone else that said they would dedicate window time, I think they would call it, where they would stare out the window and just think. Right? They felt like that was some of the most valuable time they spent, not in meetings, not in doing other things, but just thinking and processing and unpacking what's going on, which is a really interesting thought.

Shawn:

Yeah, it's a nagging pull. You can deliberately put yourself in position where you say, "Today, for the next 10 minutes, I'm going to drift." Well, that doesn't always. But the nagging pull that rock in your shoe, the pebble in your shoe, this feeling that there's something I'm forgetting when I leave the house. Right? .. back in my mind. Right? That is a good thing to listen to. "Am I going too fast? Am I forgetting something? What was that meeting about? What are we talking about here?" There's this mental awareness and the shift and thinking of slow is the new faster is a quick explanation of it.

Shawn:

You can move your business forward, your ideas forward, you can iterate faster, if you truly slow down and get back to first principles and focus on the carefully curated thought models that seem to be making progress, or that you need to kill. Some of these idea models that you're working through, you need to kill and get rid of and start up the new spawn, the new threads. The faster you destroy one plant and plant the next seed, the faster you get to that beanstalk that goes to heaven, right? There's a great example of passive incubation. Passive creativity is Kodak. I'll probably screw up the name, but Land, I think the guy's last name was.

Shawn:

His daughter said, "Daddy, why can't we print the picture and have it ready right away?" The guy's like, "Well, there's just too much, you got the liquids and you got the infrared and you got all these things, you got to do, sweetheart, and you don't understand, it's too complicated." "But Daddy, I want to take the picture, and I want to see it." Right? This is back in the '40s and '50s, and he thought this kid. But then he just froze, and he went into this sparked ... they call it the aha moment. Right? But those aren't really aha moments. Are they? Because he had been working on that for seven years. Even had a pouch designed where you could have the camera and you pull the thing out of the pouch. But he was thinking about it all wrong.

Shawn:

So, his daughter the way she said it triggers something, of all the slow create, is what I call the slow crate work, seven years prior. It triggered that missing Keystone component of how she framed it, and then a picture popped in. So this random inputs to a long tail process typically bring forth those moments, it was hard to find moments.

Brett:

So interesting, so interesting. A lot we can unpack and uncover in what we've already discussed, but I do want to move on to a few other topics as well, because we only have about 15 minutes or so.

Shawn:

Polaroids, sorry, that was the ...

Brett:

Polaroid. Yeah, yeah, yeah.. Totally makes sense. So that happened in the '40s, you say?

Shawn:

Yeah, it was back in ... Gosh, I'm going to screw this up. Edwin Land, 1947. Yeah. Right.

Brett:

That is interesting that to think about the fact that he'd been working on these problems. I've been looking at photography and film development from so many different angles, and it was the way she framed her want, the way she framed what she felt like would be really cool, that triggered the idea for Polaroids, which is awesome. So, what were some of the other surprising things you uncovered in your research? So again, you were studying companies, and then the developers behind, Ring and Snapchat and Dropbox and Gmail and Groupon and some of our favorite tech tools, what were few of the surprising things you wanted to cover?

Shawn:

We opened the book with the story of Gmail, and Paul Bouchard, who had been working on Gmail in his mind for like six years, we believe, I believe, for six years prior, and '96 he was in college, and he needed a way to check his email without going back to the dorm. So he kind of, "Screw this, this sucks. I'm going to create something." Then he never finished it. But it got the wheels turning. Right? Then 2002 to 2004, he formally created the product that became Gmail, him and a couple others.

Shawn:

But the process of adopting JavaScript was scary at that time back in the .com days. JavaScript was like a dirty word. Right? Like nobody does JavaScript. If you do JavaScript, you're going to get banned. The browser is going to shut you down. Now, it's like, if you don't know JavaScript, you're not getting hired. Right? You have to know and it's everywhere. It's all over, it's coming out of our ears. But there's so many ways that these other companies still created and been germinating on these innovative topics like Bitcoin, two and a half years for Satoshi Nakamoto. If you're out there, whoever you are.

Brett:

.. he's a regular listener. So I think he's..

Shawn:

Yeah, he's a subscriber.

Brett:

Yeah, for sure. He doesn't miss an episode.

Shawn:

Oh, man. There's so many others. The reality is when the Social Network movie back in 2010-

Shawn:

Yeah, I mean, isn't it? It's the Godfather movie for all of us.

Brett:

It is, it is a really good way to frame it.

Shawn:

Because we look back and we go, "Yeah, that's kind of the dream." Isn't it? Zuck in his dorm, couple weeks of late nights, and Pizza and coffee and all, and he's drawing on the glass..

Brett:

Drawing the algorithms on the grass.

Shawn:

Drawing the algorithms, and all of his tech people were like, "Oh, God, this is ridiculous. That's not even..

Brett:

Mark Zuckerberg is also like, "Oh, this is ridiculous."

Shawn:

Yeah. Zuck is like, "That's not even true." But they have to package tech.

Brett:

Sure.

Shawn:

Make hackathons and everyone's cheering, "Go, go, go, go." When in fact, everyone looks cool with cool hair, good teeth and awesome clothes. In reality these nerds are like frumpy dudes. It's not exactly like we're the coolest people in the world on the tech..

Brett:

Right. For sure.

Shawn:

Which is exactly a part of the narrative. The tech genius is like they take these frumpy nerds and then all sudden they have an agent, they get dental work done. They got veneers. They're on the cover of Wired magazine with shadow lights, and three point lighting, and their hair is perfect, they've got these beards now or they've ripped abs or whatever it is.

Brett:

Yeah, yeah. Whatever the look of the month is in that space. Yeah, for sure.

Shawn:

I went down a rabbit hole. Sorry, but

Brett:

Gmail and then Paul

Shawn:

Then you have Zuck in Facebook. The three week model of incubation, really wasn't true. He was already incubating on this prior to creating Facebook, there was other face smash and other things that he did. We've all heard these stories, but Bezos spent tons of time in finance. He knew the business in the industry of making money, of creating tight operations. He had an incredible mind for it, the guy's incredibly hardworking and very smart and very focused on the economical aspect of it.

Shawn:

You can go on and on and on through these background stories. The reality is, the stories like Snapchat, where you have a couple guys get together, they create something. The controversy of it is really the key word. The controversy here is Snapchat. I was a parent. I had an 11 year old daughter at the time. Now she's 21, makes me 42. But Evan, was it Evan? Yeah. Some of the guys that started with him. He pushed the envelope, and all of us parents were freaking out. Like, "What is this thing called Snapchat? You better not put it on your phone. I barely willing to let you have a smartphone at this age." I don't even think I did. I can't remember. But we're freaking out.

Shawn:

But the controversy fueled this flame and it hit the media and everyone's having heart attacks about these disappearing pictures. The kids are loving it. Then it turned into a media empire and this whole different thing. Right? So, people stumble sometimes into that viral loop, something you cannot manufacture. But after sitting down with Sean Ellis, the guy who invented and coined the term growth hacking, who helped Dropbox become a household name, I learned the true story of Dropbox from the horse's mouth in firsthand experience, a fascinating conversation, an amazing guy.

Shawn:

But one of the things you take away from that was, Dropbox was successful for two reasons. One is they created a perfect product. It's why I named my company Product Perfect. So if you need software out there, shameless plug, hit us up at productperfect.com, software consultancy down here in Orange County. But they created a perfect product, it seamlessly executed, and Ellis even said at the end of the chapter four, he said, "That was the magic for me." It was the execution of that product, when you saved the file, boom, it's there. There is no weird right clicking or let's synchronize. It automatically happens. Right?

Shawn:

Every product team out there, you should be focusing on creating a product that just happens automatically. Right? The second thing was that, he manufactured growth. They would create experiments, not because they knew they would work, they called them experiments for reasons, they didn't know if anything would work. Right? But what if we give 10 megabytes away? Well, what if you get a free puppy?" They were trying all kinds of stuff over there. The one that worked, of course, was a secret that was given to him by Jamie Seminoff, the founder of Ring bought by Amazon for a billion dollars.

Shawn:

Seminoff and Ellis got together and they had a conversation, and that one magical moment, where the way Seminoff said it, it just triggered something in his mind of, "Wait, he did what now? And it worked? How did that work?" He gave him the secret, and that is simple of mutual benefit. Right? So if the email goes to someone who's a friend who will receive as well as a sender, receives something of value, both parties have to receive value. Then both parties feel obligated to each other, and there's this essence of reciprocity.

Brett:

Yeah, back to the Robert Cialdini days, the influence.

Shawn:

Yeah. Then that worked. So they went to lunch and came back, and they saw a 300% spike on the radar, and that was the aha moment. But they had tried all these hundreds of other seeds planted before then. So I think demystifying the Dropbox story was very satisfying, and seeing that unfold in a very pragmatic way, it really encouraged me. I think it should encourage anyone else who checks it out. To be able to take your own ideas and your own products and demystify them and pragmatically force them into success by creating an experimental culture around a perfectly crafted product.

Brett:

That's awesome. So maybe as we're coming up with a few final takeaways from your research and from the book, and then of course, we'll talk about where to get the book, and I want to hear a little bit more about your company as well, before we wrap up. What are some of the key takeaways in additional to what we talked about? That you can do type of thing, where I know what you uncover, what you're seeing here is that you don't really have to be a tech genius, this can be not certainly not genius level, some creativity and some brightness, hopefully, but what are some key takeaways on, how can we do it? How can we get to ... maybe we don't need to be a Bezos's level, but how can we level up?

Shawn:

I think there's a lot you can do. I think that the hype and hustle needs to be extinguished and removed from our vocabulary. I think the whispering entrepreneur is where I want to get to, is that, I can just whisper my pitch and it blows people away. Chapter nine and 10 talk about presentation and learning how to speak, not learning how to pronounce speech therapy for them. But learning how to speak so that your information is funneled and throttled. And storytelling, I call it the great crossover when nerds tell stories, right?

Shawn:

So, never underestimate a nerd with a great story. These technical folks, they have so much for the world. They have so much good stuff inside but if you could cross that chasm, man, if you could just learn how to talk, you'd be awesome. Right? So, the left brainer sit behind their code, and they hide behind their syntax, and they say, "Well, ask me a question about technology, and I'll give you a great answer. I'm your guy, but don't ask me to design anything, don't ask me to do any public speaking, don't ask me to be out front." But there's a lot in you that ... I'm speaking to the listener, as there's so much in you that you can do. There's so much more that you can be.

Shawn:

So, learning how to tell the right story, learning how to contort your body and your mind into the shape that the world wants to see in here, not just because they want to see and hear it, but because that makes you more palatable and more interesting. Malcolm Gladwell, great author, my favorite author.

Brett:

Yeah

Shawn:

outliers. Right? He's awesome. Right? He writes about things, in his master class, they asked him, "What do you look for to write about?" He said, "Is it interesting?" That's it? Is it interesting? It could really be anything, snowshoes in Alaska, or social issues or economical issues or documentary style research. It doesn't really matter, tree roots. He'll just go off to tangents, and he'll take analogies and throw them from left field here like, "Where did you come up with that?"

Brett:

Yeah. But it works.

Shawn:

It works. Right? It really drives home some ideas, and I think left brain software development type minds out their entrepreneurial minds that are technical in nature. You have the ability to do what Malcolm Gladwell does, right? That's how I tried to approach writing, and that's how I tried to approach my compelling communication models, to take your narratives and to refashion them from every vector imaginable.

Shawn:

But I would say that chapter nine and 10, in learning how to create your own Mystique is the end result of that, because other people pull you into their dreams, they pull you into their organizations, because you're so valuable to them, the way you think, the way you speak, the way you operate, you become that MVP recruit, that partner and you're elevated from, "Let's hire that guy to let's partner with that guy or that gal." Right? That's so critical to cross that chasm of ... and all it takes is just a tiny shred of confidence and a little bit of learning, and you watch yourself, your shoulders will straighten very quickly, you'll feel more comfortable.

Brett:

Really interesting. I remember seeing one time, it's been years ago, but I'm confident that it's true is that, usually the best communicators in any field end up as the top earners. Those that can communicate clearly, internally, externally, they usually rise to the top because that's important in so many ... it's so much what we do, getting buy in from your team and then convincing an investor or convincing the market that what you have to offer is amazing.

Brett:

So, I love this, I'm excited to unpack more here as I go through the book of, "Hey, this is the way you should shape your thinking and approach your ideas, and then here are some tips for good communication." Because those two skills often overlooked, we all have room to improve. So, really excited about that. So, any final takeaways in the last minute or so? Then how can people find the book as well?

Shawn:

Final takeaways, I think, is just that call to adventure as an average Joe. If you think you're special, then you're right, but you're also wrong. Right? You're right, in that you intrinsically are valuable human being and I believe that, and truly Brett and I think-

Brett:

Absolutely.

Shawn:

The specialist that God has made us and so forth of my personal belief separate from that. But this idea that you are not special, the first day of TechStars, they said, "First of all, let's get this out of the way, all y'all are not here because of your brilliant ideas. We don't like your startup, we think your startup's pretty stupid anyway. We you're here because we like you, we think you're interesting, and you may start and stop 10 of these things in the next week. We don't even care. At the end of this process, the best possible company will come out of you, and we want to be around when that happens. We want to be a partner with you on that journey."

Shawn:

I think of anyone and everyone I interact with, if I could see them as well, they have so much great subject matter, and I can't wait to see as they evolve and develop. So, thresholds of greatness are dotted lines around our feet. I think there's certainly plenty of people out there that will teach you how to have hype and hustle and get the sugar going and you got to get up at 4:00 AM, you got to work harder everyday ... Try having kids in a mortgage Right?

Brett:

Yeah, exactly.

Shawn:

I want to see with my two year old, let me let you borrow my two year old for a couple days and you try to get up at 4:00 AM, drive to work, go work all day, freaking make the boss happy then come home at night and take out the trash and do ... put the kids to bed, and you're so exhausted, and then spend time with your spouse or something. So, the ability to garner all that together, put it through the funnel communicate properly, that's most important skill you've got.

Brett:

Yeah, that's awesome. So, he's an Amazon bestseller, obviously we find that on Amazon pretty cool website for the book too. You want to mention that.

Shawn:

Yeah, averagejoetechgenius.com.

Brett:

Averagejoetechgenius.com. I'll link to in the show notes as well. But any quick plug for the site?

Shawn:

Yeah, just check out, there's 26 videos on there, all free stuff. There's still great frameworks. There are free downloadable PDFs. You can learn how to think, speak and create like a tech genius, but it's all free and hopefully you'll enjoy it.

Brett:

Awesome. So, if someone was listening and thinking, "Hey, maybe I do need some software. I want to talk through some ideas about software." Talk quickly about your software company and how can people learn more about that as well.

Shawn:

We are a boutique software consultancy here in Southern California. Enterprise migrations, large enterprise products, we typically focus on SAS products, but we got world class designers and builders, about 15 folks, roughly and so we'd love to help you with whatever you've got.

Brett:

Awesome. The URL for that?

Shawn:

Oh, yeah. Productperfect.com.

Brett:

Productperfect.com. Awesome, I'll link to that as well. Well, Shawn, this has been thought provoking and fun, and I cannot believe that our time has run up because I feel like I could have asked you about 35 more questions, and we could have gotten even deeper the time, man. That was a good time.

Shawn:

Yeah. Thanks, Brett, a lot of fun.

Brett:

Absolutely. So, I'll link to everything in the show notes. You can check that out at OMGcommerce.com/blog. With that, thank you so much for tuning in. We want to hear from you. So give us some feedback. What do you like about the show? Give us some other topic ideas and suggestions, and give us that five star review on iTunes if you think that the show is worth it, helps other people find the show as well. So with that, until next time, thank you for listening.

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Episode 154

:

John Canetta - Discount Party Supplies

Knowing Your Numbers and Getting Uncomfortable in Order to Grow

This episode was super fun for me and the content is what separates eComm companies who just get by vs. those who thrive.

How quickly can you find the following key metrics from your business?

Contribution margin.

Inventory turn ratio.

Return on inventory (the other ROI).

If you struggled a bit finding those answers (or if you just want to go to the next level), you need to listen to this episode with John Canetta. This episode was super fun for me and the content is what separates eComm companies who just get by vs. those who thrive (and end up with big exits). It’s a must-listen for serious store owners.

You HAVE to know your numbers. And your P&L may be lying to you and you don’t even know it.

How his hedgehog concept allows him to consistently hit 80% margins vs. 40-50% like some of his competitors.
His piggybank metaphor and how it shapes his decision making
Marketing is fun, but operations are where your profits are
Understanding your numbers and making it SIMPLE -
How to look at and use Post Aggregate Gross, Contribution Margin, and Return on Inventory to hit his goals
John’s 3 keys to business success

‍

Mentioned in this episode:

“Atomic Habits” by James Clear

Bill D’Alessandro

eE 84 - Bill D’Alessandro

Helium 10

Finale Inventory

Magento

“Simple Numbers” by Greg Crabtree

Bill Belichick

“Good to Great” by Jim Collins

“Blue Ocean Strategy” by W. Chan Kim and Renee Mauborgne

‍

John Canetta

Discount Party Supplies

‍

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 going to get to hear directly from a merchant, a successful merchant. We're going to hear a little bit of their story and their philosophy. And I just love these episodes because I love when you get to kind of peel back the curtain a little bit and crawl inside the mind of a successful eCommerce operator. And that's what we're doing today. Hey, Brett Curry here, I've got an important question for you. Where will your next big idea come from? Where will your next big breakthrough come from? Or where will your next little tweak or little improvement come from? I have a suggestion, check out our guides and resources that omgcommerce.com.

Brett:

Today, joining me on the show is Mr. John Canetta, he's the co-founder of Discount Party Supplies, a fantastic eCommerce website. You got to check it out. And so with that, John, welcome to the show and thank you so much for taking the time.

John:

Thanks for having me, Brett, I appreciate it.

Brett:

Yeah. I'm really excited about this. So you and I had a chat a few weeks ago kind of prepping for the podcast and really we delve into a lot of topics that I'm really passionate about and you are too. And so I can't wait to kind of dive in and allow you to elaborate for our audience. But you said something that I think is really interesting and that there probably won't be a whole lot of objections to, but I still want to start here as kind of our jumping off point. But you mentioned to me that operations are where your profits are, right? And I'm a marketing guy. So I love talking about the latest and greatest with ads, whether that's sponsored products, sponsored brand video, and the Amazon DSP if you're talking about Amazon or Google search and shopping and YouTube, if you're talking about off Amazon, but I do agree with you that operations are where your profits are. Can you elaborate on that though, from your perspective?

John:

Sure. Yeah, we talk about marketing, right? A lot of us get into eCommerce because of product and marketing. You're like, wow, you can move things pretty quickly especially at the beginning. As the business grows and I love marketing, right, the year in the growth mode, right? You're like, oh-

Brett:

Yeah. Absolutely.

John:

Right. And you don't care so much about the spending budget as long as the cash is moving, right? But when you get to a certain size, you have to be able to take a step back and really put on your financial analysis and dive into where the profits are in the business because as you're growing the business constantly on marketing and products, well, what's going on in the back end is whatever channel you're in, they're taking, as we know, Google, Amazon, they're taking a ton of money. So whether you're on Amazon diving into things like your box sizes and how much they're charging you for that, or Google, how efficient is that marketing? Now a lot of marketing people, they'll grow it and then they'll optimize it, right, that back and forth.

John:

But you have to take the responsibility to say, I'm diving into this myself and saying, look, you're missing on these negative key words. Operationally, everything to me, I just divide the business in half, right? Marketing is all sales, right? You have to optimize a listing, you have to get product up, video, X, Y, and Z, and the campaigns going. That's all marketing. A lot of fun. Everyone wants to talk about that. But where is the profits? When all is said and done, you have to dive into that, your P&L and then get even deeper. And I think as entrepreneurs, a lot of us are on that marketing side. So it's kind of like, oh, I'll just keep growing. I'll just keep growing. The reality is you can go into your Amazon account. You can go into your Shopify Store and dig through it and be like, this is right here on the table. And I'll give you a case in point.

John:

We were shipping Amazon boxes and they were costing 40 to 50 cents a box just to ship into Amazon. Well, we flipped that on over to freight, LTL. So we were sending in pallets, 10 cents a box, right? Now when you're at scale, when you're scaling, this is like tens of thousands of dollars. And literally within a week, you just, boom. So I think knowing those numbers and whether you like it or not, some people are naturally good in analytics. Some aren't. You have to put on that financial analysis hat and that's where the profits is, and no matter what it is.

John:

Yeah, so we just look at the business like that. So let's grow over here with marketing and let's find the profits with the operational aspects. And there's so many different things, right? Between employees, everything's efficiencies, right? Just saying, okay, we can send in product directly to X, find a new supplier, right? You can get you new POs lower, right? You reduce a pricing once you're scaling these numbers are big numbers. So that's kind of how I look at it.

Brett:

Yeah. Yeah. It's fantastic. And you really nailed it there. Marketing is fun and I still absolutely love launching a new campaign and watching it grow. And I'll just use YouTube as an example, I'm working on a YouTube course right now. And there's nothing like singing YouTube campaigns scale and start to spend thousands of dollars a day profitably. But you always have to be looking for areas of waste, areas of efficiency that you can take advantage of. And you're kind of always looking for these little knobs, these little levers to get just a little bit better. And I'll actually plug a book that I really love called Atomic Habits, I highly recommend it. But in this book, the author tells a story, James Clear is his name, tells a story of the British cycling team and the British cycling team for decades and decades, they were just terrible. Like bottom of the barrel, never won anything. And then this new guy comes along and he teaches the cycling team to look for 1% improvements.

Brett:

How do we get 1% better in lots of little areas? And so they did things like, hey, how can we choose the right fabric for our uniforms and how do we choose the right seat? And if we put rubbing alcohol on our tires, we get a little bit more grip and just looking for all these little 1% improvements. But over the course of time, that leads to huge improvements. And then the cycling team went on to win five Tour De Frances and hundred world records, whatever, over the course of 10 years, it's a dramatic turnaround. And I think the same is true for business, right? You're looking for these little ways to find the extra five or $10,000 worth of profit here and there. And that actually allows you to do more, right? You find these areas of efficiency. It allows you to spend more in marketing if you want to grow faster, it allows you to spend more in new product development and R&D.

Brett:

And so totally agree with you. You have to know where to look. You got to look for inefficiencies and ways to improve. And so I want to dive into a specific topic, and this is a topic we talked about it a couple of times on the podcast. I think it was Mr. Bill D'Alessandro from Elements Brands that first talked about this topic on the show, but contribution margin. This is a number that I hear really sophisticated business owners talking about and a number that I don't hear many other people talking about. So you want to talk about what is contribution margin and why it's such an important metric for you?

John:

Sure. Contribution margin in a nutshell. So people talk about their revenues. Revenues mean nothing. I mean, they mean something, but ultimately, they mean nothing. It's like what's the piggyback, right? So you starting off and saying, when I talk to certain people in my family, hey, how was your numbers for the year? I never tell them the revenue. I tell them my revenue less my cost of goods sold, less my marketing, right? My contribution margin. So you have to know a product profit per channel, right? Each individual product per channel. And then when you get to that point, you know what that product contributed to the overall business, right? So people have different ways to calculate contribution margin, for me are ballpark numbers is just those two numbers, right? So ultimately, it's post advertising and other fees like an Amazon fee. So it's just your gross revenue, less cost of goods sold, less your advertising fee.

John:

That's kind of where I start because I know what my operating expenses are and those are fairly fixed. So I look at those other two and then you can dive into cost of goods sold, right? We were talking about that before. And then how efficient is your marketing spend? But then from there, I think it's very good, just as a benchmark to say, okay, this product, this quarter contributed this much to the business in this channel, right? So we're going product channel. And just getting to that getting to that benchmark to say, okay, how are we doing?

Brett:

Right. It's really powerful and then you have the simplest definition of contribution margin is just sales, less cost of goods sold, less variable costs, right? And the way you kind of find out these are the most common. So we're subtracting out cost of goods, we're subtracting out marketing. And then some other variable costs, but we're not really worried about fixed costs or anything like that. Our contribution margin is what we used to cover our fixed overhead and things like that. And so then what are you doing once you know that number? Are you creating specific benchmarks that you're trying to hit? What do you then do with contribution margin once you figure it out?

John:

Well, once I do that, then you're discussing that with team members, right? So you have to be transparent within what they're doing. So that's the first step. What we're doing is that. Then the second thing we're trying to do, you can take that and dig into it a little bit further because your fixed costs are just that, they're fixed, right? We need to hit variable costs as best as we can. So I'll go in and see how efficient a specific product is because from there you can say, do we need to optimize the listings? Right? And then you break it down even further. How's the videos performing depending on what channel it is, right? You mentioned YouTube, right? So what can we do for the creative? What can we do if you're on Amazon, optimized in the listings, there's so many things you can do.

John:

So I think what we're always trying to do once you have scaled to the point is to take a step back and say, we still have to bring this down to a very basic level so that those numbers will increase the variables. A variable cost will decrease or something on your sales end will increase because of those changes that you make. But really it's just getting clarity. I think once you break a certain number just say 1,000,000, 1 to 2 million, it gets a lot harder to manage your business. It gets harder to do purchase orders. Managing cash is a completely different business. Let's say if you're under a million dollars, but if you know where your benchmarks needs to be, it's like, okay, we can take a stab at a new campaign, right? Because you know, when you grow a new channel, it's going to be very inefficient at the beginning.

John:

So you're working with your teams, your agencies, and just saying, okay, this is the number that is very important to me. If you want to launch new campaigns, that's fine. We're going to go for how long is it going to take you to get to the point where this number here is growing or it's not. And if it's not, then it's inefficient and what are we going to do? We're going to kill the campaign or give it more time, or whatever we're going to do.

Brett:

Exactly. Yeah, I love the way you phrase it too. It's getting clarity, right? Clarity for you, which is super important, but also clarity for your teams and your agencies and your partners, right? If you're not really seeing what's happening, what a particular combination of product and channel, what that's contributing, then how do you make adjustments? How do you know what you need to improve upon or adjust? And so really like that approach, I 100% agree with you. So let's-

John:

Yeah, and-

Brett:

Yeah. Go ahead. Yeah.

John:

I was just going to say, and then just be transparent. Let the agencies you're working with or whomever you're working with within your company know this is what this is contributing. Ultimately, how good are you doing you're doing your job, right? If you're going to grow, okay, we can grow and it's going to reduce, you're not optimized at the beginning, but in the end, let's look at that number and see if we did actually add to ultimately our piggy bank.

Brett:

Yeah. And you can't improve what you don't measure and you can't affectively improve if you're measuring the wrong things. And so this was really a way to get clarity and to get the right clarity. So I want to transition now, and I want to talk about another metric that I don't really hear a lot of other eCommerce merchants talking about and that's inventory turn rate. And so why don't you talk about that just a little bit, how you think about it, what adjustments you make to ensure that your ROI positive on your inventory?

John:

Sure. The trick can be inventory is simply just how many turns on a yearly basis you're moving the product, right, from when you purchase it. So you're going in, you're figuring out the landing cost of your products. That's everything from your source to the taxes, to shipping, to when it's in the building, right? That's your landing cost. So you have to be able to say, how quickly am I turning this? Because it's a very good balance and check point to say, hey, if I were to sell my business tomorrow, what is the serious investor going to look at? And I think the investors want turns, right? They want to be able to say, and I'll get back into why you want the same thing. But ultimately they're like, how quickly am I getting this product into the customer's hands and then how often am I ordering it? Because once you back into-

Brett:

Yeah, how quickly I'm I turning the inventory into cash, right? I mean, that's really the way you're looking at it.

John:

Exactly. I mean, ultimately you want to be able to look at your business and say, I'm putting in a dollar into my business. What am I getting back each year? And that is not an easy thing when you're in that seven or eight figure range, because there's just a lot of things going on, we're small businesses still and there's challenges there. So you have to work within your working capital, right? But the inventory itself, you might have a great cost of goods sold. Let's say you have a 17 or 18% landing cost of goods sold. Well, what if you're not moving that? If it's taking you a year and a half to move or so many months to move, you only have one turn a year or one and a half turns a year.

John:

What are you going to do? Because your cash now is tied up, right? That working capital is growing. That's a very dangerous place to be. My P&L looks great. Well, you know what, for this product over here, it took you two years to move through the whole cycle of it. Well, what can you do? Go talk to your supplier and see if you can get lower MOQs. Well, go talk to your supplier first, right? Let's get those MOQs down. You've been doing business with them for five years. Let's see if they can warehouse something. There's different opportunities, but you need to turn that product knowing your contribution margin your post aggregate, I mean, your post advertising gross less your cost of goods sold.

John:

Then tying that into your inventory turns is going to allow you to say annually, how good of an investment is this business? Right? Because you should be saying yourself, if I'm making 100 bucks a year, how much does it cost me to get that $100? And a lot of people look at their monthly P&L, well, your working capital is too high or your P&L doesn't matter. You can go bankrupt, right? We've all heard that cash flow is always a problem. When you're growing, of course it is. It's really not easy to manage a business as it starts to take off. So I'm always looking at-

Brett:

Yeah, the main thing I learned from my finance class in college was cash is king and profits don't necessarily equal cash flow. And without cash flow, you're in trouble.

John:

Right. And you need both. You need to get a P&L that's solid, but you need cash to continue to grow your business. So you just want to be able to say I like to use the analogy with marketing and everything else, when I put two bucks into the machine, I know I'm getting the amount I'm due. I don't want to say, oh, what am I getting? So it's the same concept, right? Putting this much money that's being invested in my business, what is my return because if you're putting that much money in, there are other investment opportunities you might have in life, right, that you could be saying, well, let's scratch your head. I'm only getting 10 cents back or 8 cents back. And then a more valuable businesses is three bucks back, right? So think of it from an investor standpoint, whoa, this is businesses moving, they're growing.

John:

And then you can pretty much say to yourself, okay, it's another good benchmark to just say, this is the place where we want to be.

Brett:

Is there a particular inventory turn rate that you're usually looking for or a particular inventory turn rate that most investors are looking for?

John:

From speaking with fractional CFOs, people who do this for eCommerce, they're saying two to four X is what most investors are looking for. So they need to turn that inventory two to four times a year. Once you break four, five times, then you're starting to increase multiples on the value of your business. Assuming, of course your landing costs are there, right? Your numbers still have to beat it. You don't want to be able to go in with your post advertising gross let's just say, and your cost of goods sold under a certain percent. You need to know that percent as well for us, it's pretty high, but our turns aren't as faxed. So there's the balance there, but generally speaking, you want to have two to four turns a year. Who am I, right? I'm not the CFO who sees hundreds of thousands of businesses. I know for us that we'll negotiate with our suppliers to say, look, can you do this?

John:

We're going to buy this amount, but I need this in an MOQ of a third so that I can turn it faster, get more capital, and then we can continue to grow it.

Brett:

So basically the way to look at it, two to four turns a year on your inventory. If you're on the lower end of that turn rate, then you're probably going to want a higher contribution margin, right, which is more contribution profit there per product. Okay, great.

John:

Yeah. And you just work the formula, right? So if you can get a lower cost of goods sold, fine, you can have flow returns, but I think investors, especially today because eCommerce is still in that boom mode, especially after last year and into this year, I think the investors want to see a product that moves. And when I say product, that's how you want to measure it, right? Not just as the business, dive into the numbers. Some people have large catalogs. We'll dive into the 80/20 rule because the bottom line is almost every business has that, right? Not all times should be spent equally the same thing with products, go in, find those top X, 20% that are really turning and then just put more money into it, reduce the campaigns on the slower movers, sell those out, and then go and try to cherry pick some more new products. And then all of those numbers just start to move in your favor and then you'll have less working capital and more cash and opportunity.

Brett:

Love it, love it. So let's talk about some of your favorite tools and resources slash books because I know we talked about it in our prep call at least one really cool tool that you use, and then also a really great book that you recommended. And so you want to elaborate on those just a little bit.

John:

Sure. So for Amazon and our business, we use Helium 10.

Brett:

Great tool. We use it as well.

John:

Yeah. It's a great tool. So they're giving me that number that I'm looking for, my contribution margin on a daily basis. I still have to go in there and pull out, I'll export the products, look at that net margin number. And you also have to look at obviously the actual number that it brings in. You don't need, what is this, 45% net margin do if it's bringing in a couple hundred bucks.

Brett:

Exactly.

John:

So you just look at those two numbers, export that. I love Helium 10. I just love it. I just think it's great, the company is great. The software, it's just a change, right? It literally just says, okay, I don't have to calculate this too much, but again, I need to dive into those products still and to figure out each product's contribution margin.

John:

So Helium 10 is a great product. We like Finale Inventory, it really changed our business model in the sense of that's the hub of the whole business, right? It's not the website, not Amazon, it's this. This centerpiece where everyone can go in, everyone in the business has to know how to use that piece of technology. We're on Magento. They have know Magento, right? They have to know Finale. They have to know a couple of other things, but for the most part, Finale Inventory, and we used to have a custom ERP. We switched to Finale after years. It's just run everything very simply. So it all depends on the size of your business, the scalability, larger businesses, a lot of people gravitate to NetSuite. I'm not going to talk about that because we don't use it, but for us, Finale is a perfect fit and it's rare you get software that's an ERP, that's this strong. So I like Finale Inventory but-

Brett:

Yeah. I love it. And elaborate on that just a little bit. I know you mentioned it. And so I was impressed as you talked about it. And then I went and checked out Finale Inventory, their site, and my buddy Brett Haney from Microfiber Wholesale, there's a big quote from him right on the homepage about how much he loves it. So you're basically using Finale as an ERP?

John:

Yes.

Brett:

Right.

John:

And the neat thing about it was as you dive into it, they've done a great job, but you'll see contribution margins. You can figure that out. And again, I have Helium 10 for that, but you know when the ERP, when they're reporting has a lot of the benchmark reports, the KPIs already built in that is like, cool, I don't have to export this to a Google sheet, do my own calculations. It's already there. And those are the front end reporting where I found that when I reviewed a lot of these other softwares for ERP, they just didn't have it. So it really is a solid tool. We don't have many complaints. I mean, I give it a nine out of 10 so.

Brett:

And you're right. Those things, that is the business, right? That's the stuff you have to manage to continue to grow and thrive. And then you mentioned a book and I should chime in on this because you made the recommendation and I actually got it and read it. But you mentioned that simple numbers, I believe that's the name of it. You want to just talk about that a little bit and why you like it so much?

John:

Sure. I think his name is Craig Crabtree and I mean.

Brett:

Yeah, Crabtree for sure. I don't remember the first name but yeah.

John:

So there's a couple of things that he talks about. He talks about contribution margin, right? It's like, you better know this. So we already went over that. The other thing he talks about, it's a little bit more difficult, but he talks about he gives an example in there. I don't know if you remember about how Bella check is probably one of the best coaches, right? If not the best coach, but you have to manage a business like him. And what that means is he has a salary cap. So he gives the example of, I think it was a defensive back and the defensive back was an elite defensive back. And he was just moving and his contract was up in two years. So he knew this guy is going to demand something like four times what they're paying him.

John:

And he's like, boom, salary caps done. So what did he do? That year, he went and drafted, the patriot is always being good. He's drafted in 28 through 30. I don't know how many teams there are but like 32. So he drafted low. He went out and got one of the premier defensive back and he put them under his tutelage for two years as the author explains. This just worked perfectly for their business model. Right. So he's going to pay someone, one-tenth of what his elite defensive back is going to get in the open market, free agency. And there you go, right? So that's their business model. How do we stay? How do you manage moving parts because the business is going to happen the same way with your business? I mean, yes, you want to always pay your people the best, but you have to have that backup plan, you don't know what's going to happen.

John:

We had people in our technology and they were great. And all of a sudden what happens, monster companies come after them. And you know what, what we're not competing with is those types of salaries for this. So having that ..

Brett:

Yeah, I want you just a little bit, because I think it's such a great analogy. And one thing I love about the book is it is simple. Like the name applies in its ad section, Greg Crabtree. I think that's what he said, but just to confirm, I Googled it. It is Gregory. And so what's great about that salary cap analogy and the patriots. And I will, just a side note, a lot of people are kind of dogging Bill Belichick this year because Tom Brady left, the Buccaneers, won the Superbowl. But let's be fair, right? Tom Brady went to an absolutely stacked and loaded Buccaneers team and not to mock Tom Brady at all, but he did a fantastic job, amazing job. And Bill Belichick he's meant to rebuild a little bit. But one of the things that the Patriots have always been great at doing is maximizing that salary cap.

Brett:

And I think that salary cap is a great analogy because, yeah, to your point, you want to pay your people well. And we always try to do that. Let's pay our people as much as we possibly can, but there's always a limit, right? We can't just became pay our people a million dollars a year. We don't have that kind of money. So that salary cap does kind of apply because we've only got so much revenue right now. We can only grow so quickly. And so yeah, I love that analogy. It's fantastic.

Brett:

Cool. Any from the book?

John:

Yeah, no. I mean, whenever I read a book, I'm like, I just want one thing out of it. I got the contribution margin. I got that understanding, just I think it's like there's moving parts here just because everything is great. Change the analogy of a person to a product, right? This product's great. Okay. It's not going to last forever. There's going to be 500 people coming after it.. so just keep that in mind, whatever that moving piece is, don't ignore it. It's not going away. And if you learn to manage things correctly, I think you can be pretty successful at it.

Brett:

Great. So let's talk about just a couple more things here as we kind of come towards the end of our time, but let's talk about product and product market fit. And then you and I can talk a little bit about the hedgehog concept, which is a concept that Jim Collins pioneered in the book, Good to Great. But can you kind of talk about the way you look at product and product to market fit?

John:

Sure. I kind of break down the business into three steps, product market fit, great profit margins, and then execute, execute, execute, which is probably like 95% of it, right? But the first thing is the product market fit. Once you have that, people find you, it just takes a lot of pressure away and you have to constantly be working at that so that people ultimately want to buy what you're selling them, right? The purpose of the business is to make money, right? I mean, yes, you take care of your employees. Yes, you take care of your customers, but you got to make money. And how do you do that? Well, get a great product market fit. And then you're going to get customers. You're going to have employees who want to be there.

John:

So you're constantly working at that and it can be a bloody ocean. Right? So that's another book I recommend is Blue Oceans. That's a great book, but anyway tying that into your customer and making sure that the product market fit along with the hedgehog concept that comes from Jim Collins' book, Good to Great, right?

Brett:

Right, right. Yep.

John:

That's an incredible book, right?

Brett:

It's a must-read. It's an absolute must-read.

John:

Yeah, it is. But he talks about the hedgehogs. And when I look at my business, I'm just going to say, okay, we have 2000 products, but we have six or eight designs that no one on the market, I'm going to dominate those. I know that there's a market out there, there are private label. We created our own design and I'm just going to say, we are going to form our mound, our hedgehog, and we are not going to lose. And that's what we ultimately do. With what we're trying to always do is add one or two a year, right? So the goal isn't just .. It's going to be we have our hedgehog here. These are our hedgehogs. We're not going to lose them. We're going to grow our market share, market coverage, whether it's on the site, Amazon, Google, whatever platform it is. And we're going to make sure we own that.

John:

So tying those things together, once you do that, I think that everything else kind of plays out as long as you stay focused. It's so easy especially when there's moderate success, it's so easy to go after the next shining product, the next shining business. So just stay focused. And I'm sure so many of your people have said you got to stay laser-focused.

Brett:

Absolutely. And I love that. Just elaborate-

John:

And if you do that-

Brett:

Go ahead. Finish your thought.

John:

No, no, you can.

Brett:

So just elaborate on what the hedgehog concept is. It kind of uses, I think it ties into the parable of the hedgehog and the fox, right? And the fox knows many things, right? The fox is cunning and crafty and sneaky and knows all kinds of ways to get its prey. Well, the hedgehog only knows one thing, right? It rolls into a ball and it's got this spiky stuff on its back and it protects itself. It's simple, it's one thing. Right. And so that's where kind of that focus comes in and knowing your one thing really helps. And it's important in the very beginning, but it's important as you scale as well. So yeah, I just wanted to underscore that.

John:

Yeah. And the other thing I'd say is when you get that, then it becomes a blue ocean, right? It becomes an opportunity where other people can attack you. It can be a great design, it can be IP, right? Something functional you're bringing into the market. But for us, our designs, they can't attack them. And also, you have the higher price points. So you have just a completely different, you can ask for 30% more once you do that to a product. So yeah. That's exactly what it is.

Brett:

Awesome. So really, I have kind of two things left to talk about here as we kind of look to wrap up. You talked about something, once you've achieved some moderate success, which I know a lot of people listening are already there, right? They built a cool brand. They're scaling. They're maybe past that 1 to 2 million mark and they're climbing. What's the toughest thing to do in your opinion, once you've had some moderate success?

John:

I think just human nature, the comfort zone. I want to just go into work every day and check my bank account, make sure it's doing this. Along with other things, but we've heard Bezos's Day 1.

Brett:

I love it.

John:

We look at some of these guys', those numbers, I don't think they mean anything to them at a certain point. They just have a tremendous drive. Why is Tom Brady still playing?

Brett:

Yeah, I mean, who's going to win the seven Superbowl times? I don't think anybody's going to do that, but he still wants to play. He loves the process of playing and competing.

John:

Right. He loves dropping back and throwing a football and it's just a tremendous passion. And whatever his goals are, those internal goals, you have to continue. But to me, it's remaining incredibly uncomfortable, incredibly. It's the cold shower thing, right? I talked to my wife a lot about ADH vac system, right? Because we have climate control in the houses. And throughout time, we have a very convenient life. It doesn't matter where you are. You have heat, right? No matter who you are, you pretty much have heat in the United States, let's just say.

Brett:

Yes.

John:

But coming into work, these successes, everything's comfortable. Turn up the air, it's hot turn. Turn on the air conditioner, it's hot. Right? So we have all these controls out there that are keeping our lives comfortable.

John:

And then when you have your moderate level of success, what are you going to do? Right? Because when we have our interview, they'll hear the same thing for me. My job is to create a platform for you to become your greatest possibility while you're here. And I am fanatically disciplined. You're going to have to be too. That's the person, that's the type of DNA we have here. So if you want to just get into a comfort zone and kind of cruise, it's probably not a good fit. And I think that that's how I try to model my life and just my activities. I'm just going to say, like I was saying, 2020, the word of the year, incredibly uncomfortable because once you do, you get complacent. I don't think you enjoy things as much once all those other things fall into place.

John:

So just try to do certain things on a daily basis, just one or two things a week that's like, you know what, come up with a problem and say, I'm going to fail at this. Just say, I'm going to fail this and that's fine, but I'm going to try my best to succeed. And it's really going to stretch me because when you get to the seat you're running things, you're creating your own playbook, right? So we have to remain fresh and there's competition still out there. But I love the masterminds, the masterminds I mean, they have tremendous value. When you get into the right mastermind and you can talk to the people, but you're learning like, okay, they're stretching you. You've got to do this.

John:

Stop being dishonest with yourself, go do this. You just keep stretching and then having that burning desire to say, hey, I've got to grow more. And I think as you keep going on a daily basis, epiphanies occur more and more. Like, oh, I get that. Oh my gosh. You can look back and say, how can I not get that after doing this for 10 or 12 years? But that's where your growth is. And that's where when you see excellence in any discipline, I think that that's probably one of the things that a lot of these people have. They're not going to be complacent. They're just going to be incredibly uncomfortable.

Brett:

Yep. You have to get used to or maybe with saving, get comfortable being uncomfortable and be willing to lose at something, be willing to fail at something. And sometimes that little bit of failure really creates a drive and a spark and a hunger to do better. And just like the greatest athletes, they just love to compete and then they want to get out there and continue competing. It's not so much about the goal or reaching some moment when you're done because your goal is reached, it's about the process and it's about getting better.

John:

It's a process.

Brett:

Yep. And you actually-

John:

Yeah. I was going to say, Nick Saban, if you ever listen to him, I'm a big fan. But he's just like goals don't matter, right? The process is what matters, right?

Brett:

I totally agree. Yeah. And then because in the book, Atomic Habits as well, where it talks about you don't rise to your goals, you fall to the level of your systems and processes. And so really-

John:

That's it.

Brett:

Yeah. So one last thing here, and John it's been fantastic, it's been really fun. We can keep going here for another hour or so, but what are you focusing on here in 2021 and beyond? And you can talk about any specifics in the business or anything you kind of see or predict that's going to happen in the eCommerce space. So I'm really kind of leaving this wide open, but what are you focusing on here this year and beyond?

John:

I think when I fall back to that incredibly uncomfortable and I think 2020 was just very humbling for us. We didn't know and from March 15th to like, I don't know, May 30th, May 31st, we didn't know what was going to happen with this virus. So it kind of just was like, you had to take a step back. So I just learned a lot during that to say, how are we going to manage this? Because in our business, initially it fell off, social distancing birthday parties.

Brett:

Yeah, can't have parties right now.

John:

We were down like 80% in two days.

Brett:

Wow.

John:

That's kind of insane, right, which has been stable. People have always said, oh, you're in a stable business. Right. You're stable. Okay. There it wasn't. So you just have to be able to really take that hard look. And it's not easy because we were just talking about when things work for so many years, but I just left and I said, you know what, my value as a person is not my successes and failures. The results of my successes and failures. It's not. I've got a family, employees, I care about my employees. I really care about them. And I think that if you keep that type of thought process, then when the sales drop, like last year, I wasn't like, Oh my God. I wasn't freaking out. I was just like, okay. I think people are still going to have birthdays at some point. And there's opportunities. So it was just that where I think I took the step back and I said, let's look at all the other great things that are happening around in life in general so.

Brett:

That's awesome. And-

John:

I know that doesn't really answer your question for 2021. I don't like to predict. I really I'm just like I don't know. I mean, look, what's going on all over the place. Things are moving, going back, some of the things just go back to your systems and try to continue to develop them.

Brett:

Yeah. And then really, thinking that 2020 was a great example how worthless were a lot of our predictions related to 2020, right? Nobody foresaw that a global pandemic was going to happen in 2020 and all the ways we'd have to adjust. So I think looking at where the trends are headed, where the industry is headed, maybe making some light predictions, but then really just ultimately reacting to what's happening and improving your systems and improving your processes. That's really what it's about. So I think that's a fantastic answer. So John, as we wrap up and this has been amazing, thank you so much for the time and the wisdom where can people reach out to you? Obviously, hey, if you need party supplies, we'll all have parties again here in the future, where can they find those? And then do you like to connect with people on LinkedIn and Facebook and things like that? And if not, totally okay.

John:

Sure. You can hit me on LinkedIn. You send an email to me directly, John@discountpartysupplies.com. I enjoy like all of us, right? We just like the conversation. If anyone finds anything, hey, what do you think it is? I love to have conversations and just see if we can help people grow. Right.

Brett:

That's awesome. Sounds good. John, this has been tremendous. Thank you so much. We'll have to chat again soon.

John:

All right Brett. Have a wonderful day. I appreciate it.

Brett:

Okay. You too, John. Thank you. And as always, I appreciate you tuning in and I also want to remind you, we'd love to hear from you, our listener. So what do you like about the show? Do you have any other topics, suggestions and ideas? Hit me up and let me know. And hey, if you think we've heard it, we'd love that five star review on iTunes. It helps other people discover the show and with that until next time, thank you for listening. All right, John. That's a wrap.

‍

Episode 153

:

Brennan Agranoff - Hoopswagg & PetParty

Process Automation & Using Gifting for Growth with Brennan Agranoff

Growing up playing club basketball in Oregon with Nike HQ in his backyard, Brennan saw the appeal of custom socks as a young teen.

Brennan Agranoff was building spreadsheets at age 13. He learned a little HTML in High School. Growing up playing club basketball in Oregon with Nike HQ in his backyard, Brennan saw the appeal of custom socks as a young teen. So he launched his first eComm brand called HoopSwag at age 13. Brennan is a master of creative growth ideas. He combines that with an intense focus on product and process development and automation. We talked about both growth ideas and process automation at length in this episode.

How creative gifting has opened up his Micro-micro influencer approach
How to go from VA to automation
Always asking “how do I remove myself from this?”
How Brennan shares a similar philosophy to Amazon to automate anything repeatable
The comparison of good code to good process development
The power of good mentors
Plus more

‍

Mentioned in this episode:

“Always Day One” by Alex Kantrowitz

Lucidchart

Zapier

“Made to Stick” by Chip Heath

‍

Brennan Agranoff - Founder and CEO at HoopSwagg and PetParty

‍

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 you are going to hear a merchant story. This is a how-i-did-it story, a very unique approach. Actually, this guy has two successful e-commerce sites. We're going to dive into a little bit, and specifically we're going to be talking about process development, automation, creating even software, working with VAs, everything around creating these repeatable processes and tasks, which really will be a game changer to any and all of us. I'm excited to dive into this.

Brett:

Hey, Brett Curry here. I've got an important question for you. Where will your next big idea come from? Where will your next big breakthrough come from? Or where will your next little tweak or little improvement come from? Have a suggestion. Check out our guides and resources at omgcommerce.com. Are you looking to enhance your YouTube ads game? We have two of the best YouTube ad resources that are completely free, our YouTube ad examples and templates guide and our guide to getting authentic video customer testimonials.

Brett:

But it doesn't stop there. We also have guides on how to maximize sponsored brand video on Amazon and Amazon DSP and Google shopping and a variety of other things. So get these free guides, give them to your team. Even share them with your agency. Just take advantage of these resources and up your game. Let OMG Commerce help.

Brett:

Now back to the show. With me today is the founder of HoopSwagg and PetParty, Mr. Brennan Agranoff. And so, with that, Brennan, what's up, man, and welcome to the show. Thanks for taking the time.

Brennan:

Yeah, thanks for having me on. I'm excited to dive into this stuff.

Brett:

Yeah. Love your sites. We'll talk about HoopSwagg first. I know that's not the primary business, but that was the original. I am a former basketball coach, just retired this past year. Coached at the high school varsity level, my son, and goes a few years before that. Now I'm helping in a few areas. I'm actually coaching my eight-year-old daughter's game tonight. It's going to be the first time coaching eight-year-old girls, which I'm really excited about.

Brett:

But anyway, what was the Genesis story? Well, first, what is HoopSwagg? How did you get into it? And then we'll talk about PetParty too because they are related.

Brennan:

Yeah. I started HoopSwagg back when I was 13, technically, on paper. But it basically revolved around the fact that I was playing in club basketball or whatever at my school. Back then, I don't know if you're familiar with the Nike elite socks have got the blocks in the back. Probably if you coach basketball, you know what those are. But they came out, and growing up in Portland, Oregon, I'm like five, 10 minutes from Nike headquarters here.

Brennan:

So a lot of kids I'd go to school with, their parents would work at Nike. And so they would always show up to school with the newest whatever. Now they started showing up with these socks. I did my fair share of research on random things at 13 and figured out these things were $14. And I was like, "This is weird. Why are they so expensive?" But being my 14-year-old self, I had to get the most colorful ones. I was like, "I need these in neon." But they only had them in like-

Brett:

Yeah. They've got to make a statement, man.

Brennan:

Exactly.

Brett:

Your Nikes need to make a statement. Your socks need to make a statement on the court.

Brennan:

Everything. You had to be as colorful as you can. I figured out the only way you can get these things was some Instagram shop that I had found back when Instagram was just starting. And so, I saved up all my money one summer, which was like $40 mowing the lawn, bought a pair of these socks for literally $40. And buying them at 14 was already ridiculous back in 2013, more so than it is now.

Brennan:

So I purchased a pair of these $40 socks. I started wearing them at basketball to school and all my friends were like, "Oh my gosh, these are super cool. Where'd you get those? Where can I get a pair?" Being my entrepreneurial self, I'd flip some stuff on eBay, figured out how that whole world works very minorly. But I was like, "All right, these don't cost $40 to make. There's just no shot." And so, I was like, "I'm going to figure out how to make these things."

Brennan:

So I started digging into blogs, Reddit, YouTube forums, whatever I could get ahold of. We'd talk to print shops and really anyone I could get ahold of on online, to do as much research into how do you actually get color onto a stock? After about six months of research, if you will, I finally figured out the process and the equipment that you would need. Got some samples made from a guy locally. I had already flipped some stuff on eBay, so I went ahead proved concept on eBay, if you will, by just selling them half printed at that point.

Brennan:

Then I went to my parents, were like, "This giant." I called a business plan, but it was really just a big Excel spreadsheet that was like, "All right, here's how much this stuff costs. Here's how much-

Brett:

But how old were you at this time? You're like 14, 15 at this time?

Brennan:

I was 13 at this point.

Brett:

So any kind of spreadsheet. At 13, if you're creating a spreadsheet, I'm definitely impressed. Yeah.

Brennan:

Yeah. It's funny. I grew up making spreadsheets. I would make spreadsheets and PowerPoints for fun when I was like eight, nine. I was a weird child.

Brett:

That is odd. I mean, at least now I would observe that and say, "This kid's going places. He's making spreadsheets as a young teen, preteen." That's awesome.

Brennan:

I'm so glad, in retrospect, doing that, because, I mean, I spend so much time in spreadsheets now with ads and whatnot. I'm like, "Wow, I'm glad I've been doing this for 10 years." So basically went to them and they were like, "All right." They watched my success over the past year, two years and whatnot. I got this loan for $3,000, essentially. Bought my minimum basic equipment I would need purchase to get into this and just started selling them on eBay.

Brennan:

Then once I sold probably 30, 40, 50 pairs on eBay, I was like, "All right, I'm going to make a website, whatever that meant." I had no idea how to do that at the time, but threw up a website. I mean, that was back in August 2013. I threw up my first website. Started selling stuff slowly on Instagram. From then to now, we still make socks, that it's just not printed on Nikes anymore. But the process of the whole thing has stayed relatively similar to that.

Brennan:

Basically, it gets more complex along the way, but it was a very slow growth. The first three years, I think we did like $200,000 in revenue total. Then the next year we got to like 800, and then the next year was a million, and it's slowly grown year over year, even up until this last point. It's just interesting to watch because it's so easy to look at it from this side now. We did like 2.5 million last year, and it's easy to look at that and be like, "Wow, when in reality, that was eight years in the process.

Brett:

Yeah. Yeah. One, just hats off to you for having the idea. I love the proof of concept process. I think there's something to be learned from that. Even an established business, trying something new, do a proof of concept. Jim Collins, one of my favorite business authors and thinkers talks about fire bullets and then cannonballs. So test a little idea, it works. Okay, now go big on that idea. And then that's exactly what you did.

Brett:

Now, HoopSwagg, and I don't want to talk about PetParty because that's the newer and sounds like the bigger venture. But hoopswagg.com, that's primarily aimed at printing socks for teams and sports fans and stuff. I see you have more than that on the site. But is that the main focus of that site, is still basketball and or sports and teams, sports teams?

Brennan:

Yeah. One thing, like I said, we started with that and we would just do these preset designs that I would come up with. And that's what it's been for six, seven years. But more so in the past 12, 18 months, we started shifting more towards, how can we service these teams better? As a varsity coach, I probably sent you a cold email, honestly, like four years ago. I emailed everyone in the US I could find, and we would do team stocks and fundraisers and whatnot, and looking at how we can service that area better. We still do D-to-C, but it's mostly pushing towards that.

Brett:

Got it. Yeah. One, the other team goes nuts. You want a hoodie, you want socks, you want all that. And parents go nuts too. I'm a coach and a parent, so I think I've got a good balance, but I still like to buy the swag, and yeah, what a cool market for you to be in. And then, talk about PetParty. Where did the idea for that come from and then what is PetParty?

Brennan:

Yeah. PetParty is long story short, we take people's dogs or faces or cats or animals of any sort and we have crop them out and put them on different products, mostly stocks. Now, the idea for that, I wish I could say was super original, but it really wasn't. Back in 2017, this company called PupSocks popped up. They basically spammed everyone on Facebook. During that Christmas, it was crazy. I've never seen so many ads from someone. And I was like, "What are they doing? They're just putting people's dogs on socks." I've been printing socks for-

Brett:

Yeah, process. I can do that.

Brennan:

Why not? Now, I hopped into that. Didn't really know what I was getting myself into, just because... I'm sure we'll get into the process of that stuff in a bit, but there's a lot more that goes into that. When someone's uploading a picture, you have to crop it. You have to make sure it looks okay and then put it on a background and then print it. And everything is like a one-off print. So it's a totally different...

Brennan:

We're still printing stuff, print on demand for HoopSwagg. But it's a totally different thing because now there's an entire artwork process behind it that has to take place in the background. But I hopped into that in 2018. It's a super seasonal business, honestly. We do most of our sales November and December. Socks are-

Brett:

Excellent.

Brennan:

... the number one gift item every year for like the last 40 years or something like that. And so-

Brett:

Which is so funny. But I know for me, I forget to ask for socks, I forget to go buy socks sometimes. So Christmas, the holidays, that's a good time to ask for socks.

Brennan:

They're perfect stocking stuffers.

Brett:

Exactly.

Brennan:

You can't hate on them. Funny socks. You can't go wrong.

Brett:

Yep. Funny socks is you're going to get a laugh with ..

Brennan:

Exactly.

Brett:

That's awesome. But looks like you've added some additional things. I'm looking at a face mask here with a cute golden retriever on and some snowflakes. I'm looking at like an oven mitten with cats on it. So some really cool stuff, ties.

Brennan:

Yeah. We've added a couple of products over the past, I'd say, probably six, nine months. But we did masks, obviously, because of the whole pandemic and whatnot.

Brett:

Sure.

Brennan:

And then the oven mitts, I launched back in 2019. Those have done surprisingly well. I never thought people would need that many oven mitts, but we move a lot of oven mitts.

Brett:

That is hilarious. Yeah, there was a period of time when it seemed like, "Okay, does it really make sense to get into masks? How long will that last?" But it probably makes sense. I know from personal experience, I like to have a variety of masks. I don't want to just wear the cheap surgical one, whatever. I like to have a comfy mask. So that's interesting for sure.

Brett:

I want to talk a little bit about your growth and some of the vehicles you used for growth, just because it's always interesting, audience always wants to know that, like how did you grow so much? And then, from there, then we'll pivot and start talking process, because I know that's one of your superpowers and what you're really good at. I think it's also a skill set that everybody needs and that not everybody is maybe as naturally good at that as you, maybe.

Brett:

For those that weren't creating spreadsheets as a preteen, processes don't come quite as easily. So we'll get to that in a minute. But first, what were some of your primary growth vehicles? Once you pivoted to your own site and stuff, were you using a lot of paid media? Were you trying to get organic growth going after SEO? What was the process of growth there?

Brennan:

It's really changed over the years. I mean, obviously, like stuff in the advertising and growth world changes so quickly. But back in 2013, I was doing really well sending free socks to these sneakerheads who had hundreds of pairs of shoes. At the time, they had like 200,000 followers on Instagram, and I'm this 13-year-old kid sending them free socks. But that was assessable then. When they would post it, it would go to all 200,000 people. And so, that would do really, really well.

Brett:

Then they would be like, "Hey, this is a cool kid doing his own thing. I'm going to wear these socks and promote it," and stuff.

Brennan:

It's funny. I don't even know if they knew I was a kid, honestly. I would text them. But it's just funny. You've got these dudes who are living in Miami or wherever, and they've got all these shoes and taking these fancy pictures with cars and I'm just this 13-year-old kid sending them socks. We did that a bunch, networked well. But, obviously, as Instagram changed and it became more saturated in the platform, that started to not work as well.

Brennan:

Then they wanted to get paid for it, and that evolves. And so, after that, the next thing we moved into, I tried SEO a bit. I've never personally had success for what I'm doing with SEO. Partly we have-

Brett:

It's your game now. That was actually the core of what OMG did back in the beginning, back in like 2010, well, till fairly recently. It still works. It's a very manual process and there's really no shortcuts. So you just have to build great content, naturally get backlinks. It's just a real process.

Brennan:

It's a long game, right?

Brett:

Long game for sure, yeah.

Brennan:

Yeah. I tried that a bit back... I mean, I was probably 14, 15. It's a long game. I wanted quick results. As a 15 year old, you don't know what you're doing. I was like, "We'll keep trying stuff." And so, after that, we started working with teams. That's when we first started working with teams, which for us works really well because I know that our product is really good, and once we get product in hand, I know people will continue to buy stuff. That's proven.

Brennan:

And so, we were like, "All right, what's the fastest way to do that, is sell discounted socks to teams because you can move a hundred, 200 at a time, get them in hands, and expose yourself essentially." We started moving towards that and launched some high school basketball programs where you would literally send basketball teams free socks and then they generally end up buying them for like their JV and freshmen teams. So we'd break even, but we'd get socks on hands.

Brennan:

And so, basically our entire model was... Again, HoopSwagg was still was very Christmas heavy. So the whole model was like, "How can we not lose money the rest of the year, because we know these people will come back and buy gifts during Christmas? We did that and we tried a little bit of paid with HoopSwagg. Honestly never had great success. The most success we've ever had there has been with the team sales and fundraising.

Brennan:

With fundraising, I mean, similar things, like instead of selling popcorn, kids selling socks with their school's logo. With PetParty though, that's where I really started to get into growth. I wouldn't say I was heavy into growth with HoopSwagg. The one other thing I forgot to mention was we actually, when I was back in 2017, we got a feature with CNN that ended up on the front page for like-

Brett:

Wow. Nice.

Brennan:

... three days. Centered more so around the fact that I ran the company, which was fine at the time. But the company, we'd done more revenue in three days than we did like two years from this article and all the other stuff. So it's just crazy how a little bit of luck like that plays into it. And all those people became customers that still order stuff to this day. So that helped massively as well, which I forgot to touch on. But-

Brett:

I think there are some principles there, though, Brennan, that are worth underscoring, is when you're doing a lot of things, when you're hustling, when you're producing a great product, you're getting the hands of people, you're trying different things, you're getting it out there, then you're going to get some lucky breaks. Some things are going to roll your way. It may not be a CNN article, it maybe something else. But you prepared yourself for that by working so hard, and then took advantage of it.

Brennan:

Yeah. No, I think that's actually a really important point. It's putting yourself in the right space for those things to hit lucky, because especially with e-comm, you see so many people now that I think don't put any effort into the product, which I think should be the core of the business, is if your product sucks, you can't pay to sell a crap product. So there's putting yourself in the right place, I think, and doing things the correct way.

Brennan:

That was the other really massive thing I never thought about. The whole reason, fun fact, this CNN article happened was I was doing a press release for the fact that I had acquired a company. They were one of my competitors. It had nothing to do with me. It was the fact that I acquired someone. The only reason I acquired them was because we had done things relatively ethically the whole way, in terms of our legal paperwork checked out. It's just funny how the chain of events of doing things correctly, again, can put you in that situation for that to happen.

Brett:

Yeah. It's a beautiful thing, and focusing on the longterm. But the interesting thing is in e-comm and a digital business, the long term could be four or five years, right?

Brennan:

Yeah.

Brett:

You build up something and have a great exit in a short period of time. But you have to have that long-term mentality, which is really cool. Then with PetParty, then did you invest in some paid traffic? Do you do some amount of Facebook ads, Instagram, and Google, anything like that?

Brennan:

Yeah. With PetParty, I dove into paid since that's how I initially actually got exposed to the other company that was doing them. I was like, "All right, if they're doing it, clearly something's working. I sort of knew how to do ads, not really, to be honest with you. But after a bunch of YouTube videos, of literally finding people on Facebook, just taking in as much information as I could. There's so much information, whether it's good or bad. You're going to have to filter through it.

Brennan:

Then honestly hopping into Facebook Ads Manager and just testing with stuff. I feel like that's the best way I've learned, is just testing. But we invested heavily into that. Again, it's very holiday centric. We spend, I'd say, 80% of our money, October, November, December, and the rest of the year it's retargeting stuff. But I finally got the hang of like, "How do you actually run... What is a funnel?" I didn't even know what that was.

Brennan:

How do you run a funnel of a prospecting ad, then retarget them? Why would you want to do that? Then on top of that, one thing that was pretty important to us back in 2018, but even more so now, is our email lists are what we live and die by at this point, especially with all the stuff that's happening with Facebook now. You never know when your platform's going to get taken away, essentially.

Brett:

I was 14, you know, tracking limitations.

Brennan:

Exactly.

Brett:

The next several months. I mean, this year 2021 could be very interesting from the perspective of the big ad platforms and how do you track and attribute-

Brennan:

It's going to change and people have to adapt, but at the end of the day, that's why I love email because you can come back to it and you own it. Same with text has done well, but-

Brett:

It's so interesting how many times people have been like, "Oh, email's going to die." The kids these days, they don't email. Well, of course, they don't have a reason to email yet, but there comes a time when everybody emails and it's just tried and true, and it just works and it's going to work for the foreseeable future. Yeah. Just a quick side note and then I want to get into this process development and building out systems and stuff, software VA's, all that.

Brett:

I think, actually, there could be a benefit. Now, first of all, I would like for tracking to stay consistent. I would like to be able to know what's going on in great detail with our marketing. As a consumer, I get the idea of more privacy. But the core of marketing is never going to change. Good message for a good product, to the right audience, at the right time, with a compelling offer, that's always going to work.

Brett:

We're going to have to get creative, maybe the way we track. We're going to have to get smarter in the way we target. But I think regardless of what happens with attribution or with tracking limitations and pixel limitations, good marketers are still going to be able to succeed.

Brennan:

Oh, 100%. Like you said, if the fundamentals stay in place, the other stuff will fall in place. Honestly, it could create for a much cleaner ad marketplace.

Brett:

It could. It could.

Brennan:

You could get rid of all the other drop shipping garbage and all of this stuff that is just not quality branded content stuff. I think it actually might be good for the platform.

Brett:

Totally agree. It could be very painful, but it could allow real businesses and great products to shine in the long term. So, yeah. Awesome. Well, let's talk about... You're master of creating processes and finding duplicatable tasks and processes and automating them, systematizing them, that type of thing. Was that something you did from the beginning or did it more come out of necessity where you were doing everything in the business and you realized, okay, there's only one of me and I can only do so much?

Brennan:

Yeah. When I first got to that point of, "There's one of me and I can only do so much," the answer was hire, and that's just I think a default that I had... I mean, I was 15 at the time and I was like, "I can't make stocks." It was as simple as I can't make the sock, ship the socks, and market the socks. I don't have time to do all. And so, I was like, "Okay, we have to hire."

Brennan:

And so, at that point, that was all I ever knew. I think as I got older and exposed to more things, and I've had a couple of mentors, honestly, that have been extremely helpful to that too, to expose me to the fact that process does exist, or what process development even is, that at first, it was the answer is hire. But now, when you run into the same issue, I approach it a lot differently, I think.

Brett:

Yeah, totally makes sense. Just a quick side note to this mentor concept, a lot of people think about that, talk about that. How did you find these mentors? Maybe it's a little easier when you're a kid and you can just ask somebody, "Hey, you want to be my mentor?" But how did that come about?

Brennan:

It's a very funny story, actually. The guy who I would say probably has been the biggest mentor over the past two, three years, his name's Dennis Yu. I don't know if you've...

Brett:

Yeah. I know who he is. I don't know him, but I know we've spoken at a lot of the same events. So I'm going to see his-

Brennan:

He's all over Facebook stuff. You've seen him somewhere. I was being a dumb 16-year-old and adding people on Facebook, just all the recommended people. I added him and he messaged me about something. And then I ended up talking to him about I don't even know what. I ended up going to one of his events a couple of months later in Phoenix. I just got along with him really well. That's where I picked up a lot of my process stuff from, honestly, is watching how he functions on the backend of everything.

Brennan:

But one thing I will say to that, that it's been super interesting, is there's always this concept of mentorship, which I hate that is perceived sometimes as one person is just teaching the other. I think it's a very much so two-way street, there's a lot of stuff he's picked up from me because of my age or what I'm exposed to. And I think having that perspective going into looking at, how can I develop other relationships with similar type people where it's a two-way street?

Brennan:

But for me, I can learn so much from someone that's been in the industry for 20 years, and they can learn a lot about what's happening right now behind the scenes they might not know about.

Brett:

Yeah. I love that. I think it's just, again, a reminder, go to events, connect with people online. You never know who's quasi famous that you may connect with and really hit it off with them. They really enjoyed chatting with you. And so, yeah, I think it's just a challenge, again, to be in the right places, to attend events and see what happens. Then I think another thing that I would stress is, if you are thinking about a mentor, also think about, how can you just consume someone's content?

Brett:

Like I would view Jim Collins as a mentor. I've never met Jim Collins. I'm not going to have any meetings with him, probably, unless pay a lot of money or whatever. But I consume his content obsessively. And so, he's a mentor. On the flip side, like Ezra Firestone, he's also a friend. But we met. I saw him after he spoke at one of his first events, the Traffic & Conversion Summit in San Francisco ages ago. Talked to him afterwards.

Brett:

He was launching a mastermind, I'm like, "Hey, I'm in." And that led to this friendship but also a partnership. And so, things like that super, super valuable. Go to the event, making the connection. You never know what's going to happen.

Brennan:

Yeah. And you could get left on the cold too. I've been at events you've talked too.

Brett:

It's ..

Brennan:

Yeah, yeah.

Brett:

Maybe that was the reason maybe you wouldn't have connected really well with that person. No harm done. Still try because for every few of those are going to crash and burn, you're gonna get a Dennis Yu where -

Brennan:

You'll hit one.

Brett:

Yep. Yep. Exactly. Let's talk then about, what did you start systematizing first? How did you approach that? Then I want to get into your approach and your process. But what did you automate first?

Brennan:

I think the first thing I started to automate was when I got into the pet socks, I was like, "All right. We need to..." Basically, for context, so someone uploads an image, we have to crop it and then place it on the selected background color that they want. It also has to be put on the right template for the right product, with an order number and all this other stuff. I was like, "All right, I clearly am not going to sit here and... I can't do this a hundred times a day. I would spend all day doing that and probably still wouldn't get them all done."

Brennan:

So I was like, "All right, I'm going to go get some VAs." So I go on Upwork at the time and was like, "All right, I don't know how to hire a VA." It was put a dumb ad out. This was the start of my learning process. But that's where I started, which was literally I gave them my Shopify login and was like, "Yo, go for it. Here's a quick little YouTube video I made on how to do it." There was a bunch of mistakes. It didn't go horribly wrong, but I'd say there was the 15, 20% error rate, which is pretty horrible.

Brett:

That's ..

Brennan:

That's horrible.

Brett:

That's not sustainable, for sure.

Brennan:

No, no. That's how it started though. It was I knew nothing better. And then slowly, just evolution wise, I moved from them going into my Shopify to a Google sheet, to now it's software that they never touch. And so, that's been a three-year process. But along with that, we've used similar process for like, all right, you start with a VA for... For example, they manage our social now. We do a bunch of outreach, like sending product to people.

Brennan:

Again, I don't have time to sit on my phone and message a thousand random dogs on Instagram and send them product. But creating process for the VAs to follow. But anyways, that's when I got into it, was probably with that stuff.

Brett:

You're targeting dogs on Instagram. That's a really funny concept. You're finding people that have created profiles for their dogs, and you're reaching out to them, sending them product. That's great.

Brennan:

It's a beautiful concept because they have like 20 followers. And so, when I reach out to them, they're like, "Oh my God. This account, they found me. They clearly love my dog." I'll send them free product.

Brett:

They feel like they've made it. They feel like everything they've done in getting their pet this own profile, they're totally validated now, right.

Brennan:

Exactly. You're validating them and then-

Brett:

And then they're getting free socks.

Brennan:

Yeah. You're sending them socks. And then, what's the best part though is they take all the time in the world to send you really good product photography. Then they want you to use it because it helps spread them too. It's a very interesting little hack, I would say, I found.

Brett:

Yeah. Interesting, going after profiles of dogs, which means going after the owner, but smaller.

Brennan:

Well, and people talk about micro-influencers, I'm like, "I don't even know what you want to call these because they have like 20 followers. It's not like, "Oh, they only have like a couple thousand." It's like they literally have 20 followers.

Brett:

But what's the cost of the VA reaching out, cost of the pair of socks. And then some of those people may go nuts and tell like all their friends and family and their 20 followers could totally be worth it.

Brennan:

Oh, exactly.

Brett:

Yeah. Super cool. So you automated that as well. Want to talk about more of the stuff you've automated. But going from VA to software, was this software you purchased or software you developed on your own?

Brennan:

Okay, so for background, I can get along a little bit development-wise here, but I am by no means a professional software developer. So I try -

Brett:

You started developing when you were like eight or something? Like you sort of -

Brennan:

High school, high school. Freshman year of high school, I picked up some HTML. But I literally started trying to build stuff in... I don't know if you're familiar with Retool? It's a dumbed down easy way for non-software people to build software. And so, I started trying to make stuff in there after a point where I was like, "All right, these VAs keep messing it up. I need to fix this."

Brennan:

The way to do this is you look at what are the errors they're making? A lot of them have to do with validation errors. I was like, "All right, that's something that I can write a couple of lines of code that validates it, and that would solve that problem." And so then I started looking at, okay, well, that's great that I understand the logic of what needs to happen, but how does that happen on a webpage? I don't know how to do that.

Brennan:

And so, I started looking at these in-term software products, which was a Retool type thing, which is building software. It's SaaS. Then after I got to a point, I was like, "All right, there's a lot more powerful things we could do." That's when I started to look at and move to our own development and building our own ecosystem to build on top of.

Brett:

Did you start bringing in developers at that point, contract developers, or still doing it a lot on your own?

Brennan:

I basically just was self-aware enough to know that if I developed it, it would be garbage in a year. I brought in a real... I've worked with one guy honestly for the past year and it's just been him and me going back and forth. He's very good, and our stuff is a lot slower, but it's written the right way and we're able to build on it easily. But it's definitely a slower process.

Brett:

Yeah. Yeah. So the idea of going from VA to software, I think that's obvious right now. I just finished a book not long ago, highly recommend it, called Always Day One by Alex... Hey, ought to look it up. Can't remember his last name. Anyway, he talks about how the tech giants plan to stay on top forever. And so, of course, talks a lot about Amazon, and the concept of Always Day One comes from Jeff Bezos, where he says, "In Amazon, it's always day one," meaning, "We're always going to think like a startup. We're never getting comfortable. We're always going to be innovating and breaking things and moving ahead."

Brett:

But the philosophy of Jeff Bezos is anything that's repeatable, anything that's even remotely repeatable, we're going to automate. We're going to find a way to automate it. With them, it's going to be based on machine learning and AI, ideally, so that you free people up to do the creative work, the inventing, to invent the next thing. But let's automate everything else.

Brett:

So I think there's a level of being obvious that, hey, going from paying people to do something to having software makes sense, frees you up. Was that the goal all along or when did you transition from, okay, we have VAs doing it. It's going to be better if it's just software?

Brennan:

One big thing we've learned is you can't just go to software. There has to be that middle step. I mean, I gradually went through it, but now when I approach things, I'm like, "Yeah, you can turn it directly into software." But I want VAs to go through it to a point. If you look at it, like you think of scale, we're just going to take arbitrary numbers here. Maybe you have your own personal thing. You're like, "Okay, zero to a hundred tasks, you're going to have a VA do it. A hundred to a thousand, you have some sort of software, someone else's. Then past a thousand, you develop your own."

Brennan:

One really important reason that I don't know that I realized at first was if you don't have a VA do it, like within that a hundred, you're going to have these different exceptions that come up and ways to deal with things. If you try to develop software from day one, it's not going to work because trying to develop it for this perfect use case never ends up working and you end up figuring out, oh, this could be more useful or this could be more useful.

Brennan:

It's such a crucial stage, I think, is first yourself going through it, being able to teach someone else to do it, and then seeing how they perform within it, I think is a super valuable stage.

Brett:

100% agree. If you don't see it and see where people get stuck or hung up or whatever, you're probably going to be trying to build software, automated system, that's not very well thought out.

Brennan:

Exactly.

Brett:

You refine the process and then build out the software. For us, we have something similar on the Amazon side of our business, Amazon ad management, where we considered buying software, partnering with one of the big Amazon ad software platforms. Really haven't found one that works the way we want it to work, or that optimizes the way we optimize. So for years we did everything manually, just downloading spreadsheets, crunching numbers, doing things.

Brett:

It's really time intensive and really difficult. Then we transitioned from that to bulk uploads, to then automating a lot of stuff around bulk uploads and just continue to automate more and more. Now we've got our own API project that's in the works, both on reporting and optimization, which is really exciting. But yeah, I think it's the same thing, we're like, "Yeah. If we use this software, we're missing out on three steps that we like for app management, that would be giving up." And so we couldn't go that route. So -

Brennan:

That's interesting too you've mentioned that. You start with downloads, to bulk uploads, to... Yeah, I forgot about all that stuff. There's a total evolution of that, automation-wise. There's half automation.

Brett:

Yeah. Yeah. Exactly. You have quasi automation, and sometimes that's what you need to begin with because you're like, "Well, I can still save 30% of my time or 20% of my time if I did this, but still maintains control. We're still getting the result we want to get. And then you go from there. Cool. So then, what else have you automated? And then I want to just peel back the curtain and see what is your philosophy for terms of automation or how do you tackle a project? Sharing any tips that we haven't already looked at.

Brennan:

Sure. Yeah. In terms of actually what stuff we're automating, a lot of that has to do with the cropping process now. Image comes in. For example, we used to send out a full PSD file to a VA that would crop it. Now they're just doing the image that is going to be put on not the full composite image, but literally just the cropped image, which now gives us the ability to build our own AI models around this because we have a before or after type thing.

Brennan:

So it gives us all this new flexibility, but... So image gets cropped. It has to go through an approval queue essentially saying, This is okay," or, "This isn't okay," which builds in a whole nother level of... We basically automatically remove VAs from our system if they're not meeting the standard because we have all those stats. After that, then it goes in. It renders somewhere on a server, turns it into a composite file, which then also is approved to make sure the image looks okay against the background and everything.

Brennan:

At that point, it's sent over to our printing computers, which are onsite here. We do all of the production. But there's that, and then there's also this piece of software we've built ties into anything with customer service because there's inquiries that come in regarding the orders themselves. How do we make edits? How are we sending contextual shipping emails? All sorts of stuff like that.

Brennan:

That's been our main piece of software that we've built on top of. But the really cool thing, and what I'm excited about, is we are at a point now, really in the past month or so, I would say, we have the tech to essentially be a Nike ID from a customization perspective, where we can generate stuff on the fly, like the names, numbers, and everything. Our manufacturing process falls in line with all of this, which is another really key piece to this.

Brennan:

That's a whole almost different type of process development, but how those two connect is a very interesting world as well. But anything from that, to like we've automated more of the social in terms of our Facebook ad reporting. We have some many API service stuff that we run our own... Similar to what you guys are doing. It sounds like you run your own reporting algorithms-

Brett:

Yep.

Brennan:

... if you will, on them, since it's how you do it and it's just automated decision making. That's all it is.

Brett:

Yeah. Awesome.

Brennan:

But in terms of philosophy too, which I know you mentioned, one, it's so simple to me because it... I mean, it's so complex, but at the same time, so simple. My answer to that is if you can make a flow chart, it should be software. The reality is most of our training and documentation that I do at first, I do in Lucidchart. I love Lucidchart to death. I spend half my time on this website. It's just the easiest way to make flow charts or whatever that I found. But I have-

Brett:

This is really interesting. So you use Lucidchart to map out, this is the flow of a particular process, and then that's stage one for you?

Brennan:

Yeah, it sounds really simple. I literally have a box. I set a box on the left or on the top and on the bottom and it's like, "Here's the start or the input, and here's the output." And there's going to be a bunch of boxes in between about how you get there and things that connect to it and whatnot. But that is generally how I'll start process development, in my brain at least. The other thing I think to mention this, that is not a quick process.

Brennan:

I'll go through these. I'll keep adding to them every day because you'll go to bed and think about something or you'll be exercising and think about something. When people say sleep on it, I sleep on it a lot in terms of really putting a lot of thought into how you get from point A to point B, because there's 10 different ways you can get from point A to point B, but understanding the order of operations and how do those affect external business things. Just being super conscious about that is generally how I come about general process.

Brett:

Yeah, and letting an idea marinate a little bit. And being conscious of something, but also letting the subconscious work a little bit and solve some of those problems, which is really fantastic. Really great. Lucidchart, I've heard a few people mention that. I have not actually played around with that. Going to have to do that. Going to have to check that out.

Brennan:

It's a stupid simple tool. It literally draws rectangles with arrows in between them. That's the core of what it does. It sounds dumb, but it's the most efficient tool I've found for it.

Brett:

Nice, nice. That's great. And so, then, what are your goals then? When you're trying to automate a process, is it primarily to free up time? Is it primarily to improve the product and the experience for the customer? Is it a combination? What goals do you have around creating processes that make sure you're focused in the right direction as you build them?

Brennan:

The biggest thing I look at for process, number one, like you mentioned, was customer experience. How can we make this better for them, is definitely one of the top priorities. But the other main thing too is how can I get people out, because people cost money. For example, our cropping, when we moved to our own software, we cut our costs by 80% because we control the whole process. It's like the software paid for itself in a couple of weeks in terms of cost savings, and that's ongoing and that doesn't go away.

Brennan:

And so, for us, it's like we're very cost heavy business because we're e-comm and cash is in and cash is out. And so, cash flow is super important to us. If we're able to leverage software that we build and are able to improve that, that is the biggest win we could possibly have. Then toss in the fact that at end of the day, it makes it a better experience for the customer. For us, that's an overall win.

Brett:

Yeah. Yeah. I do love, and I'm really glad you said that. I think starting with how to make the product better, how do we give people what they want, how do we make this a better product, better experience, start with that. Cost savings, obviously, that is a goal. When your cashflow is better, you're in a better cash position, you can do better things, right?

Brennan:

Yeah.

Brett:

You can develop the next product. You can invest in marketing. You can hire someone when that makes sense. Because there are some things that we still have to hire for that software can't do. But anything the software can do, let's let it do it so that you can really grow and advance. That's awesome. Any other tools you'd recommend? Any resources or any trainings you would recommend if someone's saying like, "Okay, my wheels are turning here on what I need to consider automating and processes I need to build." Any tools other than Lucidchart you'd recommend and or trainings and information someone should consume?

Brennan:

I mean, yeah. For process, especially, overall, but web stuff, I think one super interesting tool is Zapier. It's very simple but that's how my process started two years ago, is I was on there connecting different apps and building processes together. Yeah, it's changed and that's on-

Brett:

A lot of if this, then that type of-

Brennan:

Yeah, it's understanding basic logic. Like that's what a flow chart is too. But I will say, I think understanding... Like I said, I'm by no means like a good programmer, but I can read code and I can understand, for the most part. But I understand the fundamental functions of how code works. That has made it 10 times easier, looking back. When I go to develop process, I'm much better at it now because I know how a developer will look at it and be like, "All right, how can we attack this?"

Brennan:

Then also being able to be that bridge in between makes your development way cheaper because you're not trying to communicate with them. But in terms of tools-

Brett:

Just to clarify that, so you understanding code and playing the role of a developer a little bit, you think that's just trained your brain to think in terms of process, and to think in terms of sequence, and to think in terms of this idea of clean code, where it's not full of a lot of junk and clutter, but it's just clean it to the point, like it's trained your brain? Or you mean you're just better able to analyze code?

Brennan:

No, I mean, analyzing code is great, I guess. But yeah, no, to your first point, I think it's much more... Because that's how code works, right?

Brett:

Yeah.

Brennan:

There's no creative. It works or it doesn't. And so, understanding like if-then statements, what a loop is, why you would want to iterate through things. Even though it doesn't seem too applicable to process, then the code is process. And if it's good process, it will be turned into code. Being able to go backwards I think helps. Like I said, I'm not a great developer. I watched enough YouTube that I can get by, but it's not like I could go code anything on my own.

Brett:

Yeah. But that process really helps you. It's funny. I heard a teacher say something, and actually this was in the book called Made To Stick. But an algebra teacher talking about how algebra is like weightlifting for your brain. You may never use algebra again. But that process is going to help you with logical decision-making and probably will help every decision making process you make for the rest of your life.

Brett:

So it's like you don't lift weights just so you can lift more weights, unless you're a bodybuilder. But you lift weights so you can go tackle somebody, or so you can lift your grandkids or whatever, and algebra is the same way. So it seems like coding did that for you, which is really interesting.

Brennan:

It's 100%. I don't know what that is, but building the subconscious muscle, essentially.

Brett:

Yeah, yeah. Yeah, yeah.

Brennan:

Also was a very, very large fan of math in school, which probably had something to do with that as well.

Brett:

Math is awesome. I try to tell my kids that all the time, they don't believe me. Still working on it. I've got to go back to that weight training example. I think that's a really good one. I haven't used that one in a while. It's really-

Brennan:

That was good.

Brett:

That's awesome. Man, it's been really fun. We're about out of time. Any other recommendations you would give to people on this idea of creating processes or anything you want to... We'll start with that. Any other recommendations?

Brennan:

I mean, honestly, it's not easy, I would say. And so, go try to create a process and follow it yourself and see what happens, because my guess is you can't even create a... If you're just starting, you probably can't create a process that even yourself can follow if you knew nothing. Give it to a family member or a friend and see if they could do it. It doesn't have to be on web or anything. Just a process to follow anything.

Brennan:

I think the most you can learn from this is trial and error. And then, honestly, go get lost in YouTube. There's a lot to be learned there, I think. Like I'll go watch how people, or like the process for how some logistical systems are built. It's not applicable to what you're doing. It's just understanding why other people think the way that they do.

Brett:

Yep. Yep. Yeah. I think that totally works because if you look at... I remember hearing the story of I believe it was Henry Ford, and this could have been one of those made up things, but it makes sense, where Henry Ford had the idea for the assembly line by watching the way a cow was butchered or something, where like, "Hey, this is the station where they cut the head off." Is really gross. Cut the head off. This is the stage where they do this .." He's like, "Hey, you could assemble a car that way," right?

Brennan:

Yeah.

Brett:

So totally unrelated industry, but that idea. Seeing that spurred the idea for the assembly line. So, cool. Any thoughts on what's next for PetParty or for HoopSwagg, and anything you wanna tease us with there?

Brennan:

Yeah. I mean, a lot of what we're working towards now is all of our stuff we've developed has been internal and now we're looking at, how can we start to integrate with other people? One of the biggest things that I found to work really well is this concept of gifting, for example. It's the most simple thing, but you send someone a pair of socks with their face on it and a note, and I guarantee you that person talks to you again. Like you can get ahold of them whenever.

Brett:

And they're going to show at least a few people those socks. Almost -

Brennan:

Oh, it's always posted on social. That's the funniest part. And so, we've looked at this, like it seems like a little bit of a hack, but just customized products because it shows that you care a bit and a bit of thought has gone into it. And where does that cross with relationships and helping to build those? And so, integrating with businesses as part of a sales process.

Brennan:

Then on the HoopSwagg side, more so like, how can we build our own Nike ID and these automated fundraising programs? So leveraging what we've already built to continue to build these cool products on top of it.

Brett:

Love it, man. Love it. That gift idea is so, so powerful. Taps into the idea of the law of reciprocity that Robert Cialdini talks about in Influence, his book called Influence. But it's also you can't just give a crappy gift. This is so unique and it totally aligns with your business model, and it's something that everybody's going to like. It's just a brilliant way to use that approach. So kudos to you on that.

Brett:

Awesome. If people are listening and geeking out and saying, "Okay, I want to follow what Brennan is doing, and I want to see what's going on with his websites and stuff," how can they learn more about your products? And then, are you active on the socials and can people connect with you there?

Brennan:

Yeah. The websites are hoopswagg.com and then petparty.co, not .com. Then on social, I respond to... I'm on all of them. Not active, but I DM a lot. I'm on Instagram @Brennan.Agranoff. I think my Twitter's Brennan Agranoff. There's not anybody else named me, so I'm pretty easy to find. Then also, if anyone ever just wants to run process stuff, I will talk process stuff all day. My email is brennanagranoff74@gmail.com.

Brett:

Sweet. All right, man. That is awesome. Thank you for that. Hopefully, people will take advantage of that and chat with you. Brennan, crushed it, man. This was a ton of fun. Thank you for coming on. Thoroughly, thoroughly enjoyed it. I'll link to everything in the show notes so people can check out your sites and the socials and whatnot. But thanks, man. This was fun.

Brennan:

Thanks for having me on. This was an awesome talk.

Brett:

Yeah, absolutely. As always, thank you for tuning in. We'd love to hear from you. What would you like to hear more of? Give us some guests suggestions. We'd love to learn more of what you want us to dive into. Also, if you've not done it already, we'd love that five star review on iTunes if you feel like the show is worthy. Helps other people discover the show when you do that. With that, until next time, thank you for listening.

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Episode 152

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Arlen Robinson - OSI Affiliate Software

Referral Marketing Programs for eCommerce

Referrals are great, but just waiting for them to happen on their own is NOT a formula for rapid growth.

If you sell a great product, then no doubt you’re getting referrals. Referrals are great, but just waiting for them to happen on their own is NOT a formula for rapid growth. Referral programs are a proven, but underutilized strategy for growing eCommerce brands. In this episode, I interview Arlen Robinson, referral marketing specialist, podcast host, and co-founder of Affiliate Software. We dig into some powerful points to help you take your referral marketing and affiliate marketing to the next level. Here’s a look at what we cover:

What’s the difference between referral, affiliate, and influencer marketing and how they each impact your business.
To incentivize or not to incentivize? Understanding the when, why, and how of referral incentives.
Creating a viral loop to get customers into your referral program
Tools and approaches to make it easy
Plus some real-world case studies

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Mentioned in this episode:

Arlen Robinson - Co-Founder and COO at OSI Affiliate Software
OSI Affiliate

BOOM by Cindy Joseph

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eCommerce Marketing Podcast

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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, CEO of OMG Commerce. And today we're talking about a topic that we've really only touched on on this podcast. We're talking about referral marketing, creating a referral marketing program, touch on a little bit of influencer marketing as well and kind of how those blend together and how they differ from affiliate marketing and we're going to get tactical. We're going to be strategic as well. And so there should be a lot of fun.

Brett:

My guest today is Mr. Arlen Robinson.

Brett:

He's the co-founder and COO of OSI Affiliate Software, which we'll hear about a little more in a bit. He's also the host of the eCommerce Marketing Podcast, phenomenal podcast. I was a guest on that show not too long ago. And he's been at it for a while. I think, he's pushing 200 episodes with that podcast. So you got to check it out. It's worth the listen. And with that, Arlen, welcome to the show, man. Thanks for taking the time. Thanks for being here.

Arlen:

Thank you, Brett, for that wonderful intro. I really appreciate it. And I am super excited to be on today.

Brett:

Yes. Look, let's get right to it. So kind of three different topics we'll look at and kind of compare and contrast real quick, but then we get referral marketing, which we're going to talk about decent amount today, affiliate marketing, which I'm seeing more and more people engaging in, or at least talking about, influencer marketing, that's all the rage now, right? So from your perspective, Arlen, kind of what are the differences, where they overlap? But kind of talk about referral affiliate and influencer and how they stack up.

Arlen:

Got you. That's an awesome question. And it's one that comes up quite a lot as you can probably imagine. A lot of times, unfortunately, people tend to use all of those three different things kind of interchangeably.

Brett:

Yes, exactly.

Arlen:

They probably shouldn't be there. They are three distinct things and I'll definitely define the two. So if we start off at the top, which would be referral marketing, that's when any brand or business organization gets their existing customer base to refer others to the brand for an incentive. And typically, their customers are going to be referring people that they know, friends, family, people in their small networks. And that's really what a referral program is.

Arlen:

Usually with a referral program, the goal there is not only to get, of course, referrals, but the goal also is to help build your customer loyalty. And what's usually recommended by just a general rule of thumb is when you have a referral program, the general type of incentive was going to be something that's going to drive the customer back to your particular site or your brand to purchase more. So usually, a typical incentive for referral program is going to be a discount towards future purchases. So that's really what it is. And that's what sort of-

Brett:

Totally makes sense. So this is the refer a friend program, you can think of this has been around forever and marketing, even back in the early days. I remember we used to have dish network way back in the day and they would always mail us the refer a friend program using this coupon, give it to a friend when they redeem it, they get $50 off, you get $50 off the next bill, something like that. So the idea there is not just to get a new customer for the referral, but you're also saying the idea is to get that existing customer to buy again, right?

Arlen:

Yes, definitely. And that example that you mentioned is something that, of course, it's still used today. You probably have heard it and I know the listeners have seen these as well, where it's the, let's say, give $10 earn or give $50 earn $50, meaning that you're going to refer your friend, give them the discount of the $10 off, 10% off, whatever it is, and you're going to earn typically an equivalent amount of the discount if you decide to purchase other items. So that's really standard. And then that's what we usually see with the referral program.

Brett:

Which is great because it does make you want to buy again. And I think there's just something powerful about when you tell a friend about something, it also kind of solidifies in your mind the value of that thing and the value of that brand, right? You're telling people, you're referring people to this specific product or this specific brand, it almost in some ways it enhances your loyalty because you're talking about it so much. You want to be consistent with what you're talking about. I think there's some psychological benefits here too.

Arlen:

Yeah. Definitely for sure. It really just overall, not only if you're going to be growing your customer base from people that you would never have approached otherwise, but it just gets your brand awareness out there a lot more because you have all of these individual advocates promoting. Now the next kind of layer or I guess the next option in this kind of whole word of mouth marketing paradigm because I guess that's basically where all this comes under, would be affiliate marketing, which you mentioned.

Arlen:

Now affiliate marketing is different so that's why I mentioned it. There's a distinct difference than what the difference is, is with an affiliate program and affiliate marketing, you're getting people that are not your customers, that may have never used your products and services at all to promote your brand for an incentive. And what they're going to be doing is promoting it to a network, their own network that they have access to. Whether it's a large community on the social networks, whether they have a community-

Brett:

They get an email list or something. They've got a list there they're hitting.

Arlen:

Exactly. Some type of lists on type of network they're going to promote it to. And, of course, they're not doing it for their health, they're doing it for an incentive as well. And usually with affiliates that are outside of your company, these are people that are not customers. The typical incentive is going to be cash. Cash is king when it comes to-

Brett:

Cash is king. Show me the money. That is the motto of all affiliates, for sure. We were talking about loyalty a minute ago. Affiliates typically are not loyal, right? Affiliates will go to whoever, whatever offer, whatever company they can get the highest payout on. That's typically the quest of successful affiliates. So no loyalty there it's all business.

Arlen:

It really is. It really is. And that's why I like to say, it's typically cash could commission as standard usually. A percentage of an order total is what we usually see across most affiliate programs. Sometimes there's fixed amount for the affiliate program. And it just depends, but cash definitely is king and that's what's the usual incentive. And now kind of the next piece under this whole referral, excuse me, under this whole word of mouth marketing kind of paradigm is influencer marketing, which is fairly new under it.

Arlen:

And there's a slightly distinct difference, but these days I typically tell people that an influencer is really almost an affiliate in today's world. I'm not sure who initially coined the term influencer or coined that whole concept influencer marketing, but I think a lot of it really was birthed from the explosion of celebrities and celebrities doing endorsements. But as long as we can remember, of course, celebrities have always endorsed brands and have been brand sponsors. All the way from back in the day when we saw OJ running in the airport promoting Hertz.

Brett:

Hertz, man. Was a Hertz add. It's was a classic ad.

Arlen:

Classic ad. He was a sponsor, brand advocates. So that whole concept has been around for a long time. With these days-

Brett:

And some of the differences should chime in here really quickly. Sometimes in the affiliate world, you've got people that are just really skilled at traffic, right? They're really good at going out and it's like traffic arbitrage, where they'll go out, they'll run. They're really good at hitting different display networks or native ads. And they can generate that traffic and send it to an offer.

Brett:

And they're better at cheap traffic, better at marketing than some of us. Some of the folks are really good at SEO. But on the influencer side, it's usually more about their personality, right? They've developed a following because of who they are, and what they're interested in, and what they're talking about, and you want to be like them. And then, of course, there is some crossover too. It's interesting distinction.

Arlen:

Exactly. And I think where this kind of really all began was not only through what you mentioned, the explosion of social media and these celebrities or these people that had a huge following across it. A lot of them really started way back, I don't know, this is probably early 2000s with Paris Hilton actually. She has a documentary out and I was watching it a couple of months ago and she actually mentioned this. She considers herself the first influencer.

Brett:

Interesting.

Arlen:

She's coined herself as being one of the first influencers.

Brett:

Kardashian's like, "Wait a minute here, wait a minute. Don't forget about me."

Arlen:

Exactly. But when you think about it, Paris Hilton was one of the first. Then basically what she did was leverage her audience to sell product across all her channels and social channels. And then after that, then we saw huge explosion of other celebrities, other notable people doing the same thing, commanding large commissions from these major brands to promote product. And they were getting brands in front of a new audience. People that are primarily on the Internet, maybe they don't watch traditional live television broadcasting.

Arlen:

And so typically these days, most millennials will never watch a broadcast show. Everything is either on demand or on the Internet. And so in order to reach them, you got to do what you have to do. You got to tap into these influencers because they've formed a connection with the audience. And that's really another thing that I think does differentiate an influencer from an affiliate, is the relationship that they have with their network.

Brett:

And just one quick thought there too, which is really interesting. I think it just underscores the point that we all know. But we were traveling recently for a basketball tournament and staying in at a hotel. And my younger kids, five and four wanted to watch a show. Well, we turn on the TV and they literally had no concept of, "Hey, you just watch whatever's on this station."

Brett:

And they're throwing out requests. "I want to watch this. I want to watch that." I'm like, "Guys, there's just what's here. You just have to pick." That concept is becoming more and more foreign. And I think it just shows the trend that it's all on demand, or YouTube, or something. We're in control of our media consumption habits and that's not going to change.

Arlen:

Exactly. And the thing that I was mentioning that separates the influencer from the affiliate is like I said, that relationship that they have with their audience, because people that follow these influencers, they almost feel like they get to know them, or they're an extended member of their family because it influences... They spend so much time pulling people into their whole circle. You know what they eat for breakfast. You know what types of clothes they wear. You know where they live. I mean, you really know a lot about them.

Arlen:

And so you know about their family members. And so because of that exposure that they're putting themselves out there, the people that are following them are going to be more likely to trust any recommendation that they make. So if they recommend a brand or say that they used a particular brand, their followers are going to say, "Wait, I need to use that. Paris Hilton or Kim Kardashian is using it. It must be good. I need to get that." And so that's really kind of where we are today.

Brett:

Got it. That's awesome. So we're going to get into the some of the why's and the how's here in just a minute. What do you recommend though, Arlen? Do you recommend that e-commerce companies consider kind of all three variations? Do you recommend starting in one or the other? Do two of those pair really well together? What advice would you give there?

Arlen:

Great question. And I always recommend starting off with the referral program because most customers, mostly most companies you're going to have at least a few customers already under your belt, unless you're just fresh out of the gate. You have some customers there that have purchased from you and trusted you enough to buy from your brand. And so I always recommend starting with the referral program.

Arlen:

Once you get it launched, communicate with them via your email list or through whatever channels of communication that you have with these customers and let them know. We just launched this and this is what you can earn if you refer your friends, they can get this discount. And then they can get this discount and you'll get this incentive. And so definitely start from there and then-

Brett:

Yeah. I think it really makes sense. And what's interesting, just to kind of go into that just for a second, if your product is good and what you're doing is solid, you're going to get referrals naturally anyway, right? It's going to happen organically.

Brett:

But the thing I love about referral marketing programs is anytime you're intentional about something, anytime you focus on something, anytime you specifically ask for something, you're going to get more of it. So I think a lot of people just want to say, "Hey, I'm going to let this be organic. I'm going to let people refer as they see fit." That's great. But if you put a little emphasis on it, you're going to get more referrals, right? Anything you would add to that?

Arlen:

Yeah. Definitely as far as really kind of what you put your emphasis going, it's really where you're going to, like you said, get the best results. So it's definitely good to get one of those areas down. That's why I recommend starting with the referral program. And then from there, you kind of got your processes in place once that happens because you're going to really understand what it's going to take for them to promote, what types of creatives you're going to need to provide them.

Arlen:

Then you're going to understand the process of getting them the commission. How often am I going to pay that out? How is that going to work? And it's always best to just use your customers with that because you already have a relationship with them and they trust your brand. And then from there, branch out. Start with the affiliate program, launch that because at that point then you've kind of had all of these initial processes and procedures in place and can then start approaching people that you've never talked to or approached before.

Brett:

Yeah. That's awesome. And so as you've been... And I know you work with companies all the time, helping design these programs, and get them implemented, and helping them track it with your software and stuff, but what kind of increase those?

Brett:

What kind of lift are you seeing? Let's talk about the why a little bit. I mean, I know we spoke in general terms and I just referenced it a little bit there where anytime you focus on it, ask for more, you're going to get more referrals, or influencer sales and whatnot. But can you speak to lift or give any kind of quick examples before we get into the nuts and bolts?

Arlen:

Yeah. You mean as far as any specifics of ..

Brett:

It's just like result. Or you've seen someone, once they implement a referral marketing program, the referrals go up 30%, 40% or where we're seeing a 10% lift in sales. Anything like that, that comes to mind? And I know we may get into specifics later and that's fine too. We're just curious.

Arlen:

Yeah. Good question. A lot of it really is going to have to do with, not necessarily the niche that you're in or that particular industry that you're in, but I think a lot of it really is going to come down to really what you put into it and where you're making available to these actual advocates.

Arlen:

But typically, I think overall what we typically see and what I've seen from speaking to customers of ours is once they've launched it, 10% to 20% lift in overall sales on any given sales period or sales cycle, let's say on a monthly period is really what I always continually hear. Between 10% and 20% increase in it if they are starting out with just solely exposing it to their customer base and buying on the networks that their customers have.

Brett:

Got it. Let's talk a little bit about structured here, maybe even incentives. So how would you structure this? How would you advise your client to structure or where should they begin?

Arlen:

Well, when you're putting everything together as far as getting the structure in place, the biggest question, of course, initially is going to be, all right, do I definitely need a software solution to manage all this? Or can I do this in-house?

Arlen:

And so although I've talked to many e-commerce brands that initially you kind of approach us as the company, or I've just hear about, they say, "Yeah. We've got a referral program in place and what we're really doing is we don't have really a system in place, but we just provide our customers with a promo code, a specific promo code that they can share with their friends. And we know that anytime that that promo code is used, we know that John Smith, our customer John Smith is the one who referred it so we got to give him a 10% discount on future purchase. So we'll just send that out to him, email that out to him."

Arlen:

So essentially, it can be as simple as that. If your brand is maybe just getting started and you don't necessarily know if this is something that you're going to maintain and your customer list is small, you can just start as simple as that. But what I do recommend is trying it out like that. You can do that, but that can get kind of complicated quickly depending on how many interest that you get actually from your customer base. It could become overwhelming in a short amount of time.

Arlen:

If it really takes off and you've got a lot of your customers really responding well to it and saying this is awesome, and they start sending you referrals. Overtime in a short amount of time, you're going to really need somebody on your team that's really dedicated to managing that. So I would say you could do that, but I always definitely recommend using a referral marketing solution initially, especially because of the price point to get started with in most cases is pretty affordable that I think can fit in the budget of any brand.

Arlen:

So I definitely recommend starting there and getting that in place. As far as structure is concerned, think about the software solution that you're going to use, but before you've been kind of launching anything, you want to think about initially that incentive. What is that incentive going to be? How often am I going to pay it out? Because that's very important as far as the incentive is concerned, because that's really when it comes down to it, that's going to be what is going to attract people to getting off their butt and promoting your brand.

Arlen:

And so I did mention earlier about the referral incentive and how typically with the customer referral program, it's common that you're going to just give your customer a discount on future purchases or future sales. But I know people that are listening are like, "All right. That sounds good. I can give 10% and they can earn 10%, or they give 20% and earn 20%. That sounds great," but how do I come up with those numbers?

Arlen:

A lot of people listening are probably... they'd be thinking that they may just be shooting in the dark guessing, but there actually is a rule of thumb for that. And what we typically recommend is that if your product costs more than $100, your typical or average product is more than $100, then a flat rate discount is more effective and it would sound more impressive, such as $30 off a purchase or future purchase.

Brett:

So you choose a flat dollar amount rather than a percentage off in that case.

Arlen:

Yes, exactly. If the products costs typically more than $100. However, if your product costs less than $100, you're in the smaller price point range of things, then a percentage discount in that case is going to sound a little bit more impressive, such as 15% off, or 20% off. And so that's the typical rule of thumb that I recommend. And so once you kind of wrap your head around that and figure out what's going to be best for you, you get that referral incentive amount in place.

Arlen:

And then secondly, then think about how is my customer going to promote? Where do they typically frequent themselves? So is it a particular social network? Is it Facebook? Is it Twitter? Is it LinkedIn? If so, what types of promotional creative materials do I need to provide them? So you need to think about that because when you open this up, you want to make it super easy for people to promote. You don't want people having to think about it, and having to create their own graphics, and then to go through too many hoops. So you want to make sure everything is laid out for them and all they have to do is spread the word. And so those were the initial pieces that I think are critical.

Brett:

Totally, makes sense. And if you look at it, like we talked about before, if you got a great product and a cool brand, you're going to get some referrals anyway, right? And then if you just ask for referrals, if you just say, "Hey, we'd love to meet more people like you. You're our ideal customer. You could probably help somebody else by referring them and helps us out too. This was great." Just asking and then you get more. But then if you can incentivize it like, hey, ask, give 10%, get 10%.

Brett:

So you're looking like a hero because you're sharing this with a friend and they're getting a discount. You're getting a discount too. And then on top of that, you're making it easy. You're facilitating and saying, hey, all you have to do is share this quick message.

Brett:

Here's a quick image, something to put on Instagram, Facebook, or whatever, just making that process super simple. What do you recommend, Arlen, in terms of where do you promote this? So where and how do you make your customers aware that one, you want more referrals and hey, here's how to start sending people our way?

Arlen:

Got you. That is probably the second most asked question when people first launch the referral program. So I'm definitely glad you asked that. And how do you find these people? How do you get them into your referral program or your for marketing funnel? And the number one thing is right when you launch things, you've got everything in place, you're getting ready to launch, alert all of your customers through your email list. That's number one. Hopefully, your brand has some type of lists or program to facilitate your communication with the customers.

Arlen:

So you definitely want to send out just a brief announcement saying that you've launched it and letting them know where they can opt in or sign up and just see what type of exposure that you get or response that you get to that. So that's number one. The second piece is going to be alerting all of your new customers about your referral program. And this is something that we call as creating somewhat of a viral loop because, of course, you already have an existing customer base.

Arlen:

You can let them know about your program. You can do that through your mailing list. And then also secondly on top of that, as far as your existing customer base, you can also put an announcement on your social media because a large part of your followers are going to be your current customers. So definitely do the alert on social media. But the next thing that you have to think about is all your new customers, people that have just signed up, or in the process of signing up, you want to alert them.

Arlen:

And that can be done. And to create this viral loop, you can do that through your transaction emails. Believe it or not, the transaction emails are some of the most open emails out there. They have some of the highest open rates of any email out on the Internet right now because when people order things, they're going to be checking those emails. They're going to be double checking the order.

Brett:

So this is your order confirmation email. This is your shipping confirmation email as maybe a follow up after it's been shipped, things like that?

Arlen:

Exactly. So people are checking those emails. And so what we recommend doing is not doing a huge, big announcement in those emails. You've got to be very subtle because those emails have a strict purpose, and that's really to make sure people are aware of what they ordered, they see the price, they see the amount, and they can see the shipping timeframe and all of that. All those details have to be prominent. But what you can do is just put a small announcement in a small link that you've got a referral program.

Arlen:

If they opt in, they can earn 20% off on future purchases. Just something like that, because those emails are going to have a lot of eyes on them. And that is what we think of as being able to create a viral loop because you're consistently getting new customers and you're consistently exposing people to the program through those emails. And those are the, really, some of the biggest areas of getting customers into your referral program.

Brett:

I like that viral loop. You're automating it. You're hitting people when they're paying attention and when it's ideal, and you find that that's the right time to ask as well. So I mean, obviously people are opening those emails or confirmation, shipping confirmation, things like that. Is that the best time to ask? Or is it also good to ask a little while into the relationship maybe after someone's used your product for a week or two, or a month or two, or something like that? Do you have any recommendations there for when you ask for that referral maybe after that initial purchase?

Arlen:

Yeah, definitely. And I'm glad you asked that as well. Part of the viral loop also is going to be doing a follow-up to those people that either have initially opted into your program from those transaction emails or people that just didn't pay attention to it, and that can be through your follow-up emails. Normally within a brand, typically these days, after a certain amount of time, you'll probably got your customers on one of those check-in campaigns where you're following up with them, checking in with them to see do they had any questions?

Arlen:

Do they have any problems? Things like that just to really put a little tickle in their ear and stay in touch with them. And so in those emails, that's definitely a perfect email to do another follow-up, let them know that if they didn't take advantage of your affiliate program or your referral program, rather, they can still opt in. And then the other side of that, is you can also do a whole separate campaign to people that have actually already opted into the referral program.

Arlen:

But this is going to be something a little bit special where you're going to take a look at the backend of your referral program. And you're going to look at some of those top affiliates and really see what they're doing. And what you can do is come up with just a hand-crafted email just to say, kind of a thanking them really for them becoming an advocate, thanking them for all the referrals, and then just showing them some brief stats in the emails saying "Last month you did awesome.

Arlen:

You referred the new customers to us. We see that you earned $500 worth of product. And we still appreciate you." You can say, "Next month, we've got some specials coming down our pike. So we think you can even double that." Things like that. So this is something very personalized where you're looking at what they did in the past, highlighting it with the stats in the email, and encouraging them to do more in subsequent months.

Brett:

Yeah. I really like that. It kind of goes back to the 80-20 rule, where it probably 80% of your results are going to come from 20% of your customers, and probably 80% of your referrals are going to come from 20% of your customers. And so you can probably get more referrals if you treat that top 20% better. One, just acknowledging them, like you're talking about. Just saying, "Hey, well, thank you.

Brett:

You sent five people our way, or 10 people our way, or whatever." Just with celebrating them, and making them feel special, and giving them a heads up really kind of makes them feel like they're an insider, part of your team or whatever. And actually, that kind of leads me to another question. I'm curious. Do you have any thoughts on what you name this? Because you don't want to call it your referral program, not necessarily anyway.

Brett:

I mean, I guess you could, but is it the friends and family program? I know my buddy has a Firestone who runs Boom, by Cindy Joseph, the ambassador program. Actually, it's a little different, but it's got some similarities. So then did you have any suggestions on names? So maybe these are VIP's? Any thoughts there?

Arlen:

Yeah. Just like anything, and I'm glad that you brought up those examples. Usually, when I'm talking to businesses that are launching their own referral program, I don't spend a whole lot of time to think that they should focus so much on the name per se, because the bottom line is they want to focus on really making sure they come up with the right incentive. They want to look at even their competitors and seeing, all right, what are their competitors offering and really focus on the incentive, because you want to attract as many people as possible.

Arlen:

And these days, people are... they want to get as much as they can no matter what it is, that's the bottom line. But there is definitely something to say about how you brand it and the name that you come up with, because that can definitely stand out. These days, I think people are accustomed to go into a site seeing your referral program or referral program links on other graphics on the site. So they're accustomed to seeing that.

Arlen:

But if you do think outside of the box and thinking about something different, like you said, your buddy with the Firestone, they have a friends and family program, definitely is a little different. It can definitely attract a little bit more attention because it stands out. It seems a little bit more personalized. It makes it seem like they're pulling you in, the brand is pulling you in to be part of their company, or organization, or corporate ambassador program, VIP ambassadors.

Arlen:

So there's definitely something to say about that. And I think what it comes down to is just like anything, you have to try certain things and then test the results and see what type of response. Because if you do go with one particular name, that doesn't mean that you've got to stick with that for the life of the referral program. You can always pivot, call it something else and see what type of results you get.

Brett:

Yeah. So, I think being creative is good. The way you brand things, it does make a difference. But if I'm kind of reading between the lines here, you're maybe saying that structure incentive, the way you put it together, it's probably more important than what you call it, as long as it's clear what it is type of thing. I like it.

Brett:

I'll let you, maybe if you have any other points there on the referral program, but then I'm also curious to know, when do you then say I've really got this in place where my existing customers are referring, and I've got the viral loop in place so that new customers, they're going to be incentivize and asked to bring referrals. So then when do we kind of branch out into influencer land then, because you can kind of use, in some ways, some of the same systems and the same platform software, all that? When do you look at influencer?

Arlen:

Yeah, definitely. And that's a great question because since you've already got these processes in place and the structure for your referral program, you've got the affiliate program, there's not that much else that you need to do as far as the structure and the processes are in place to manage the influencer program. The next thing that you have to focus on, if you're looking to kick that off, is really how do you get these influencers? I think that's really the focus though of where you're going to spend a lot of your time is getting those right influencers.

Arlen:

Of course, all of us, anybody that has an e-commerce brand would love the likes of a Kim Kardashian or a Paris Hilton or any of the huge celebrities these days to promote the brand. But unless you have hundreds of thousands of dollars to pay them in commissions, it's not going to happen. That's really the bottom line. We can dream all day, but we have to be realistic. But that's where kind of the beauty of influencer marketing is that a lot of people don't think about. There are tons of influencers that are in just all different levels really. And really, it really breaks down to the type of influencers you want to go after.

Arlen:

I'd like to break it down into categories as follows of which be initially, just a regular local influencer. A local influencer will really just be anybody that probably is within your social media sphere that has about zero to a 1,000 followers. You can definitely look through who's already following you, see what niches they're in, and see would they be right for approaching and letting them know about your influencer program. On the next level is going to be the micro-influencers, which are anybody that has about a 1,000 to 10,000 followers. And you can kind of reach these people. You can definitely do your own kind of grass root searches, and just look at the various follower levels.

Arlen:

And the good thing is today, there's a ton of influencer marketing databases and services out there where you can maybe do some initial free searches, but then you can pay a monthly fee to get access to these databases that have everything broken down on influencers in certain categories. You'll be able to see the amount of followers they have across all of their different networks, you'll be able to see what niches that they are in that they promote. You name it. All that information is there. So you can use those tools-

Brett:

Any specific tools you recommend there, Arlen?

Arlen:

Yeah. There's a ton. I mean, one is just influencer.com is one service that you can check out. Another one is influencer.co, influence.co. Those are a couple ones that are easy to remember that you can check out. But all you need to do is just do a simple Google on influencer marketing services and you'll get a ton of results. There's a new database popping up every day from what I've seen.

Brett:

Sure. Totally makes sense.

Arlen:

And so you can go that route. But you don't even have to be that sophisticated. If you're just trying to see where this is going to go, you're not sure where it's going to go, I mean, you can just do your own, like I said, grassroots searching. And one strategy that I recommend is in the social networks especially Instagram, just do some hashtag searches on certain queries that would be applicable for your business.

Arlen:

For example, let's say you're in the fashion space, a specific hashtag that you could use, let's say you're in the Chicago area, you could do a search for #chicagofashionblogger, and believe it or not, the last I checked, I think you're going to get about 10,000 or so results of that hashtag being used. And do you have to think about it. That's a specific hashtag.

Arlen:

Not everybody's going to be using that hashtag and post, unless they're either a blogger, or influencer, or they're somehow affiliated with somebody in that sense. And so once you get these results, you get somebody on your team to do the due diligence, do the follow-ups, get them in your CRM and just start approaching them, just letting them know you've launched an influencer program. You're interested to see if they'd be interested in promoting your brand, and this is what you could offer them. And just go by it that way.

Brett:

Awesome. And then in terms of, and I want to get to talking about your software here in a minute and any other tips that you have, but any way you would speak to how to make it easy for influencers to promote our brand, our product? Are we giving them graphics, and materials, and talking points? Or how are we making their process, their job easier as an influencer?

Arlen:

Got you. And you kind of nailed it. Just like with the affiliates that I mentioned earlier, and even your referral program, you got to provide them with as many tools as possible so that they can promote effectively and they don't have to go around guessing, because if they have to run through too many hoops, they're not going to do it. They're not going to promote your brand. And so as a brand, number one, if you are selling a product, definitely get them that product, send them the product, let them get their hands on it, have them record some unboxing videos.

Arlen:

Those are the big things of today. These unboxing videos, have them do a review. You want them to be seen with your particular product across their social channels. And secondly, if you have photos and specific high quality posts that you think that they would be appropriate for them on certain networks, definitely get that to them. Whatever graphics or product photos that you have, you want to make sure that they have that so that they could easily share that. So get that to them.

Arlen:

If you've got other... let's say you've even created videos about your particular product, make sure that they have access to that. Or if they want to point a video to their following, they can do that. So all of that, you definitely want to make sure that they have access to that so that when they're thinking about promoting your brand or just starting to promote it in general, your brand will be top of mind because they already have all of this material and they make it easier for them. And the-

Brett:

Yeah. So they're educated and know what to say, and they've gotten materials they can share, if they want to. Go ahead.

Arlen:

Exactly. And these days, because there's so many channels to promote, and especially since we're kind of everybody's living in this virtual world now because we've got a lot of face-to-face interaction happening these days because of the COVID-19 that's kind of affecting everyone, these influencers these days are hitting the digital airways more than ever through promoting on their YouTube channels or promoting on podcasts. They're out there virtually.

Arlen:

So what you want to do, definitely, is also provide them with specific, unique promo codes that they can share. And then make sure on the back end, you have the proper mechanisms for tracking the use of those codes, because when somebody is on a podcast and they're talking about a particular brand, you want to make sure that that influencer gets credit. So the best way to do that is giving them a promo code that they can mention.

Arlen:

So they can mention your brand, they can mention the promo code, and then you'll be able to track if it's used. And the same thing goes for Instagram, because with Instagram, unless the influencer has more than 10,000 followers, they can't put any type of clickable links in their either Instagram stories or their posts. So you want to allow them to use promo codes that they can just mention. And when people see your brand and go to your brand's site, they'll think about using that code so that -

Brett:

It totally makes sense.

Arlen:

... influencer can give credit.

Brett:

Yeah. Awesome. So kind of two things I want to wrap up with, and I'll let you kind of pick where you want to start here. I would love to hear any kind of quick case studies, people you've worked with, and I know you may have to be discrete about either brands, or metrics, or whatnot. Be as specific as you can without violating any confidentiality there, but I'd love to hear some case studies.

Brett:

And then let's also talk about your software, right? Because we kind of see how this could all play out. Certainly, we can maybe use spreadsheets and generate our own codes, and stuff like that. That sounds like a lot of work. I think a specific tool or software would be the way to go. So I want to hear about your software too. So which would you like to start with? You want to talk software or you want to talk case studies?

Arlen:

Yeah. I'll start off with the case studies-

Brett:

Yeah, sweet.

Arlen:

... because it was always interesting just to see the kind of breadth of this. So a lot of times people don't really realize the impact or the bang for the buck that they can get from word of our marketing. But I think when you see the amount of companies that are using it from small to just large, then you really see that it's something that every brand really has to be a part of. And so I'll start with one of our customers, one of our top customers, actually, is a brand called incorporate.com.

Arlen:

They provide business incorporation services for businesses worldwide. So if you're looking to start a business, then set up an LLC or set up an INC. They're one of the top brands for doing that. And they use our software for their customer referral program. And they also use it for an affiliate program. And so I mentioned them because they're kind of really at the top, because they've helped over a million, millions of businesses in the U.S. to create a corporation over the years.

Arlen:

And so they obviously see the value of it. They've been a customer of ours for quite a long time now, and are steadily using that to increase not only their conversions from affiliates and from their customers, but for just overall brand awareness. And that's the second piece to this that I think is essential, and especially with a brand like that, that has so much exposure of brand awareness is. You can never have too much awareness of your particular brand.

Arlen:

So they're a great initial case study that I want to share. And then secondly, we've got some other brands that have been with us for quite a while now. I've got a particular brand that sells a unique, I would want to call it an herb, it's called maca. The brand is called The Maca Team. And then basically what they sell is this particularly unique herbal, I want to say kind of a supplement that you can put in drinks, smoothies, things like that, or just use it as a regular supplement, and it's one of those considered super foods.

Arlen:

And what they've done, is they've done a great job growing this by finding a niche set of affiliates. Because it's considered a super food, they've realized that these days, personal trainers are not only working with people to improve their physicality, but a lot of times personal trainers also act as kind of a nutritionist for people. People are looking at these trainers and be like, "Man, how did you get so fit?" And well, people don't really realize is that 80%-90% of the fitness has to do with nutrition.

Brett:

Absolutely.

Arlen:

And so they get a ton of questions. And so what the market team has found is by approaching these trainers and getting them on board as affiliates, they've been able to create really a great pipeline of new customers from the customers of these personal trainers. And so those are some great that I'd like to highlight.

Brett:

I love it. And I think almost any e-commerce brand, any product you're selling, whether you're in the skincare, supplements, automotive, accessories, clothing, whatever, I think there's a... in fact, I know there's room for one of these strategies or all of these strategies, either customer pro program, influencer marketing.

Brett:

I think every e-commerce brand should be utilizing it to some degree.So let's do this, Arlen, because we're kind of up against time. Let's talk about OSI Affiliate, your company, your software that you co-founded. How does it make this process easy? Kind of walk us through why we might consider it to run our programs.

Arlen:

Got you. Great. I'm glad you asked that. Of course, OSI Affiliate Software is a great tool if you want to launch a referral program, an affiliate program, or an influencer program. Any of those programs can be successfully managed in our software. And that's something you really want to look at as well when you're you kind of in the market to launching one of these programs, you want to find something that's going to be versatile enough to manage both or all three of these types of programs.

Arlen:

And what we've done, because believe it or not, as a business, we've been in business for over 21 years now, actually long time, the Affiliate Software actually has been around for about 15 of those years. We've actually had a whole suite of solutions. And then the Affiliate Software was one that really took off. So about 15 years ago, we closeted our other solutions and have gone full force with the Affiliate Software. So as you can imagine, in these 15 years, we've learned a lot and we've done a lot with the software.

Arlen:

And one of the key things that we've done that I think sets us apart from our competitors is that we've spent a lot of time on determining what are the best features to have and not create a glut of features, which I think a lot of our competitors fall short of, and they try to just flood the product with just so many features. And of course, it is good to be able to have a feature-rich product, but we kind of have a different school of thought of that and decided that it makes a little bit more sense from the feedback that we've got from our classes, that you have something that is going to have just really those main features that people are going to primarily want to use.

Arlen:

Because as you have those glutted features, it makes sense difficult to navigate your product, makes it difficult to use it. But with our software, you can easily get up and running for as low as $47 a month. This is what our basic plan is. We give a 15-day free trial. Once you get into our app, we have a really easy getting started wizard that steps you through creating your initial referral influencer or affiliate program. Steps you through that process.

Arlen:

And then we do also provide a fair amount of handholding because we do know that businesses these days are probably busier than they ever have been, just trying to keep the lights on and trying to increase their sales. And so the last thing that they want to have to do is dig through a cumbersome software solution. And so that's why one of the things that also sets us apart is we offer or an unlimited amount of one-on-one support sessions via Zoom with our support team or customer success team.

Arlen:

So once you get going and you get your program up and running, we always recommend that our customers meet with our company success team that can go through using the software, give you some recommendations, help you through some of the features, and get you on your way. And even after do that, if you have any trouble or difficulty, you can always schedule subsequent meetings. And so those are some of the things that I think are important that I wanted to highlight that set us apart from a lot of our competitors.

Brett:

I love it. You guys are true OGs in the space. You've done this 15 years. In Internet marketing years, that is a long, long time. And so I appreciate that. And it sounds like a really good value. And I think just the ability to chat with you, to chat with the rest of the team, you guys are very knowledgeable in this space. And I think a lot of people listening, smart marketers who are doing great things with their e-commerce store, they get a general idea of how to run this.

Brett:

And certainly we've laid out a lot of good tips here, but once they get into the specifics of their program, and their business, and "Hey, should I do this or that?" It's nice to have someone that they can chat with and someone they can reach out to, like your team, you and your team to get that feedback and that support. So awesome. Well, Arlen, kind of as we wrap up, how can people connect with you? So how can they learn more about the software? And also pull your podcast real quick, if you'd like.

Arlen:

Oh, yean. No problem. And thank you for that. The easiest way to get to our site to access our software if you're looking to jump into the world of affiliate, referral, and influencer marketing, you just go to getosi.com and that'll take you right to our site. So that's just getosi.com. It'll take you right to our site. If any listeners want to get ahold of me and pick my brain anymore about referral marketing, influencer marketing, or just anything in general, I'm always glad to talk to the business owners as they navigate these turbulent times.I'm always interested in giving advice. They can just check me out and get access to all of my social handles by just going to my domain, arlenrobinson.com.

Arlen:

That's A-R-L-E-Nrobinson.com. And you can access my social handles there and you can get in touch with me there. And then lastly, as, Brett, you mentioned and I appreciate that, is if you want to hear some other e-commerce marketing strategies, do you want to hear Brett who was on our show, you can definitely go to ecommercemarketingpodcast.com to access our podcast and all of our episodes, and then even access, of course, our whole library of past episodes of close to 200 on any podcast platform, from Apple Podcasts to Spotify, you name it, you can find us there.

Brett:

Awesome. Arlen Robinson, ladies and gentlemen. And that was a ton of fun, Arlen. I am motivated and inspired to do more referral marketing and blend that with some affiliate or influencer marketing. And so, hey man, really appreciate it. Thanks for taking the time. Thanks for dropping some knowledge, and it was a lot of fun.

Arlen:

Yeah. Not a problem. Thank you, Brett, for having me. It was a ton of fun for me as well.

Brett:

Absolutely. Awesome. Well, as always, we would love to hear from you that a tuning in. Hey, reach out to us on the socials. Let us know what you'd like to hear more of. Give us some show ideas. And hey, if you haven't already, love that review on iTunes, five stars if you feel like we've earned it, helps other people discover the show, and that would make my day. And so with that, until next time. Thank you for listening. And that's a wrap.

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Episode 151

:

Josh & Becca Hadley - Hadley Designs

Lessons in Amazon Growth from a Husband & Wife Team - Josh and Becca Hadley

This eCommerce power couple is ON FIRE. They are cranking out AMAZING products on Amazon and growing fast.

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This eCommerce power couple is ON FIRE. They are cranking out AMAZING products on Amazon and growing fast. More importantly, they’re having fun in the process.

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More surprising and impressive than the growth is that they’re married, work together and, wait for it...still like each other!

‍

We uncover some really powerful lessons in Amazon growth, business growth, and maintaining healthy work relationships. I hope you enjoy listening to this as much as I enjoyed recording it!

Here’s a look at what we cover:

How to pivot and grow
How being in the right role to compliment each other is super important (whether you’re married to your business partner or not)
Mistakes in hiring the wrong people and how to get this right
How to know when and how to “let it go” and not get your feelings hurt
How Tenacity and passion create the ultimate 1-2 punch
Learning from your successes - a great tragedy is business is succeeding and not know why you succeeded.
Knowing your super power and using it consistently

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Mentioned in this episode:

War Room Mastermind

Relax The Back

“Who Not How” by Dan Sullivan and Benjamin Hardy

“Radical Candor” by Kim Scott

Jim Collins

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Josh Hadley - CEO at Hadley Designs

Becca Hadley - CCO at Hadley Designs

Hadley Designs

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Episode Transcript:

Brett:

Hello and welcome to another edition of the eCommerce Evolution Podcast. I'm your host, Brett Curry, CEO of OMG Commerce. Today on the show, we have a first, a first that I'm really excited about. And also, I don't know how this is going to go. This is going to be really interesting. I think it's all going to be smooth, but there could be some fireworks here because we have a husband and a wife team on the podcast today. We're going to get to hear just a phenomenal success story. This is a rock star eCommerce couple working side-by-side building an amazing business.

Brett:

We first connected in Austin, Texas, at a war room event. We immediately struck up a friendship, had a great chat. I'm delighted to welcome to the show, Josh and Becca Hadley of Hadley Designs. Josh is CEO. Becca is CCO, Chief Creative Officer. I'm just so excited guys, so excited you could be here. Congrats on your success. Congrats on being a power couple in the eCommerce space and thanks for coming on the show.

Josh:

Yeah, thanks for having us here, Brett. We're a longtime listeners, first time caller.

Brett:

Hey, I love to hear that. That's awesome. Tell me, when did you realize that like, "Hey, we could work together in our business," because I know a lot of couples that love each other. They're committed, so awesome, but they would never work with each other. When did you guys first realize that, "Hey, this could work"?

Josh:

I don't know if there was ever a reality point where it was like, "Oh, this could actually work." I think that we just got started and we'll tell our story a little bit more, but we just got started and as we got into it, we both kind of have our own areas of specialty. She doesn't need to touch my work and I don't touch her work. And actually, it works really well, but it's been really fun to work as a couple. And again, if you would have asked me before we started Hadley Designs, "Would you like to work with your spouse?", I probably would say, "No because that could...." you hear all the horror stories.

Brett:

Sure. Sure.

Josh:

But for us-

Brett:

The relationship is too valuable to risk it on a failed business endeavor.

Becca:

Yeah. We actually don't really know it much any other way though because we got started probably a year and a half, two years into our marriage. So honestly it's been more working together than not. So for us it's kind of the only things we've known.

Josh:

That's true.

Brett:

That's amazing. So I want to hear the story. I want to hear the back story because I know it's going to be fascinating. But I'm just curious, do you have any code words? Any code words for, "Hey, let's stop talking about this," or, "Hey, you're not talking to me like you should." We're a couple here. Anything like that that would be helpful for other couples out there?

Becca:

I'm probably the more high strung one that's like, "Okay, we need to..." We have a date night every week and we make sure that at least the majority of that date is spent talking about life and other things. We're very open about it and we have rules, if you call it that. Just having some guidelines to give it a break. I don't think Josh needs a break ever. But I need to talk about other things sometimes.

Brett:

Yeah, that totally makes sense. We have talked about... First, kudos to you guys for doing the once-a-week date night. My wife and I have talked about that a lot. As people know who listen to the podcast, we have eight children. It's not so easy to do date nights. We're like a once-a-month probably date night. But we'll get better at some point. That is awesome, guys. Excited to dive into the story. Let's just start at the beginning. How did this start? And first of all... And this is not a relationship show, per se... But any interesting story on how you guys met?

Becca:

Well, we met on the corner of the street.

Josh:

That's right. Picked her up off the corner of the street. We'll just leave it at that. Let your imaginations run wild. You can go ahead and tell him.

Brett:

Oh man, you guys didn't really meet on the street.

Josh:

We did meet on the street. Go ahead and tell the quick version of this story.

Becca:

We really did. Yes. If you know Josh, it's nothing surprising. He's very friendly, open, confident. We were actually just walking to campus of the college at the same time, crossing the road at the same time. And Josh just struck up conversation. I was confused and tired because it was early in the morning and cold in the winter.

Brett:

Josh, are you a morning person? Were you all excited and loving life and such?

Josh:

It's funny. I'm not really a morning person, but when I see a beautiful girl, sure.

Becca:

So he didn't even get my number, though. He just invited me to his business club, which also fits his personality. Just started talking.

Brett:

Yeah, that's smooth man. It's subtle, like, "Hey, come to the business club," so you're not really sticking your neck out there like, "Hey, I'm totally into you." But it's like, "Hey, you want to learn business?" And then... Yeah, I'm impressed, Josh. That's a good move.

Josh:

Yeah.

Becca:

I guess it's an ironic start, given where we are now.

Josh:

It is true.

Brett:

Exactly. It's like it was destined that this was the way it was supposed to be. You guys met at a business club and run a business together. And by the way, before I forget, this is a sign that you have achieved success in your business. And also this is a quick plug if anybody's watching the video because I know most people listen. But hey, check this out on YouTube or on Facebook if all you do is listen. You guys have some special chairs. They're... Becca, could you lean to the side and tell me about the chair. There you go. There you go. Look at that. Those are fancy white chairs with a black H on the back. It's super cool. I'm jealous. I've just got a normal chair here. So what's the story behind the chair?

Becca:

We finally upgraded and got a grownup chair.

Josh:

Well, we had our old... Yeah, when we first-

Becca:

College chairs-

Josh:

Our old college chairs. And then they were literally breaking. My back was hurting. Basically I got old, Brett. So thanks for calling that out. I lost my hair and my back started to hurt. And so we got, what, orthopedic-

Becca:

Yeah, they were like chairs.

Brett:

Orthopedic chairs, there you go.

Becca:

Yeah. And I love monograms so we added the H because-

Josh:

They are very soft.

Becca:

Business name, our name, it's great.

Brett:

Now can you recommend the specific brand? I know this is-

Josh:

Yeah, it's a Relax the Back.

Brett:

Relax the Back, okay. I will definitely check it out. I like it. I like it a lot.

Josh:

They're really really good chairs.

Brett:

Awesome. So business club, going back to business club, that's going way back to the beginning, how did this business start?

Josh:

Let's fast... That was in college. And Becca... We'll go quick story here. I was doing my MBA. This is at the University of Utah. I was finishing up my MBA and she was finishing up her undergrad in early childhood education. We got married our...

Becca:

We had one year left.

Josh:

We had one year left when we had got married. So we got married. Finished up college. At that point, I had got a job with American Airlines in their MBA Leadership Development Program. That brought us down to Dallas, Texas. At that point, Becca, the conversation was like, "Well I know what I'm going to be doing during the day. What are you going to be doing during the day?" And you had... Why don't you tell the story of how you had always had an interest in graphic design. That's when you started actually exploring it.

Becca:

Yeah. In college, I just had a lot of people who told me that an art degree would be a waste of time and money. And that it would be a waste of my-

Brett:

Good path to become a barista or someone like that if you really love coffee.

Becca:

Yeah, I'd never get a job. I'd waste my scholarship, all those things.

Brett:

And nothing wrong with being a barista, by the way. Quick shout out to all my barista friends. I love you and you know that I support you. But anyway, go ahead, sorry.

Becca:

Yeah, so I tried to find a job or a career, a degree that would allow me to still be creative, which I love. I've been creative since birth. I love to design and do art and all these things. I decided to try and study early education because it allowed me to create lesson plans. And I'm social and friendly so I get to be around people. I thought it would be a good path, possibly, if I wasn't going to do an art degree, even though I knew that's what I really wanted to do. When we came out to Dallas, I started looking around to work at pre-schools and stuff. I just don't love other people's kids that much.

Brett:

My wife has said the same exact thing. Yeah, it's true.

Becca:

Well, it's a passion. I love creating the lessons and that was about it. I didn't really want to participate. I just knew it just wasn't right. It was something I would watch the clock and wait for the time to be over. It just wasn't the right fit. So when we moved out here, we were fortunate enough that I didn't have to get a job right away. So I started teaching myself graphic design. I watched hours and hours of YouTube videos and online courses. I'm totally self-taught in graphic design and Photoshop.

Brett:

Amazing.

Becca:

I spent that whole first year doing hundreds of free Christmas cards and-

Josh:

Wedding invitations-

Becca:

Literally everything under the sun, yeah. And we did have a good friend that was out in Dallas. He was getting married and so she asked me to do her wedding invitations. That's where I was like, "This is it. This is so fun." I loved doing wedding invitations and that's where everything started beginning of Josh and I working together. We started doing custom wedding invitations. And Josh handled all of the business, the sales side, the pricing. Because I'm terrible. I'd be like, "Oh, I don't know. I'll do it for free. I love it. It's great." Josh helped me turn it into a business, which that's part of the reason we work so well together, is he can more handle that business side and realistic expectations and money and all those things. And I get to be creative and come up with products and all those things. So we work really well together. That's how it all initially began.

Brett:

I love that where you've got those complementary skill sets where if the roles were reversed, if each of you had to take the other's role, it wouldn't work. Right? That's the makings of a great partnership whether you're married to your business partner or not. Having that complementary skill set which is super cool. Using that graphic design ability... And by the way, your stuff is amazing. I'm a fan.

Becca:

Well thank you.

Brett:

But then combining that with some business savvy and Josh's skill set. So Josh maybe you want to add to the origin story there.

Josh:

Yeah. We started doing the custom wedding invitations and I was still working my full time job with American Airlines. I worked there for five years while we were basically building Hadley Designs. I consider it my venture funding, if you will because it was... We would stay up until 2:00 a.m. every single day. In fact, we still often do that, way too often.

Brett:

Do you do it now just because you love what you do and you're interested? Or it's just too much on your hands?

Josh:

Yeah, we love it.

Becca:

Yeah.

Josh:

We just love what we do.

Becca:

We love it. And it's a fun time together. We can talk more about that. It's been a huge blessing. It's been fun.

Josh:

Yeah. Anyways, we'd built up the custom wedding invitation business to a point where if we wanted to bring on more clients, Becca was already maxed out. There was no additional room for clients. They'd have to wait six months just to even get on our schedule. That's when I'd heard about Amazon and people selling on Amazon. So that's where we dipped our toe in the water because it was like, "Hey, we're not able to scale this business any further unless we want to start hiring more graphic designers and go that route." But I decided, "Hey, let's see if we can do something just here on Amazon." We launched our first product on Amazon. It was recipe cards. Ironically enough-

Brett:

Super fun.

Josh:

The product category isn't amazing in and of itself but we launched it in Q Four of 2016 and recipe cards do very well in Q Four of any year. All of a sudden I saw this huge spike and I was like, "Oh my gosh, this is it." It wasn't the silver bullet that I thought it was.

Brett:

Because then in Q One sales went way down, I would assume.

Josh:

Yeah, yeah, yeah, it was definitely a peak. But anyways, it got the idea started of, "Hey, maybe there's something to mass producing products instead of doing custom projects, one off for everybody." So again, that was a few years and we've still been on Amazon. We've been launching hundreds of products on Amazon in the stationary and gifts niche. And then from there, Becca also created some printables that we have available on our website to help people celebrate holidays, birthdays, and baby showers and all that stuff. That's the culminating point of our business. I was able to quit my job last year with American Airlines.

Brett:

Congratulations, that's awesome.

Josh:

We launched our own website on Shopify and we're just continuing to go all in and new product design. It's a lot of fun.

Becca:

Yeah.

Brett:

Yeah, that's fantastic. One thing I think would kind of fun... This is a couple's show... Is let's, I love to hear people's super power. What makes you unique? I think we all have them, in business, to a certain degree. We have some super power. But not everybody likes to brag on themselves. We're so humble in this industry, some of us. Can you explain to the audience the other's super power? Becca can you go first and explain to us what is Josh's super power? Other than being charming and handsome and all those things.

Becca:

I was going to say, I have a hard time picking just one. I would say Josh has a couple. For one, I think he's one of the most driven people in the world. I think he's able to create more talents just from-

Brett:

And by the way, just a quick question. Do you guys do the enneagram test? Are you guys enneagram people?

Josh:

We have not taken it. I've heard of it. I need to.

Brett:

I was going to try to guess what Josh is. I'm not, oddly enough, I'm not very good at guessing. I think I connect with people well, but I'm not that great at guessing. I'm a three, for those enneagram people. I'm a three, achiever. I wonder, Josh, I bet you're a three.

Josh:

I'll have to follow up. We'll have to follow up.

Brett:

I guess so. Let me know.

Becca:

I'll have to know your bet on me too so then we can take it and find out.

Brett:

I'm thinking you're maybe a four, individualist. Any who, okay, all right, I totally interrupted you.

Becca:

Oh that's fine. Yeah, I would say Josh is extremely driven. Like with Amazon, he knew nothing about it when we were doing custom brides, custom wedding invitations. And he put in all the time and effort to just completely kill it on Amazon. And that's the case with anything that he wants to learn: putting up our Shopify store, figuring out marketing. He's become super great at figuring out how to hire people. He's just really good at learning and then applying what he's learned and being able to then teach and manage other people to do it as well, to grow our team, to manage our team. He's an extremely great leader. I would also say that he's very creative in a business sense. I think people sometimes only associate creativity with art work. Whereas Josh is a very creative entrepreneur, whether that be figuring out the best way to launch a product or to reach a certain audience or to hire someone. He'll come up with very creative ways to do it and execute. And so I think he's super driven, a great leader, and very creative in a business sense.

Brett:

I love that. I'm so glad you pointed that out because there is definitely a creativity, an ingenuity, being innovative. And that doesn't necessarily mean art. It can. Art's fantastic.

Josh:

I'm terrible at art.

Brett:

But you can be innovative in a business space. What's that?

Josh:

I'm terrible at art.

Becca:

I will say, though, I have been genuinely impressed with how much his perspective of what looks good and what doesn't look good has improved over the years. He's pretty good at being like, "Yeah, this has no potential."

Brett:

Your taste is being refined right before our eyes, Josh. This is great.

Josh:

Yeah it is.

Becca:

It's very important.

Brett:

Okay, awesome. That was fantastic. So now roles are reversed here. So, Josh, what is Becca's super powers? What are her super powers?

Josh:

Yeah, well, Becca-

Becca:

Compliment me.

Josh:

She is just-

Brett:

I'm ready. I'm ready. Soak in it. Lay it on me. Here we go.

Josh:

This is good, yeah. Apparently we need to do this more often.

Brett:

Are you counting? I'm an eCommerce show host. I do some YouTube ads. I do some marriage counseling as well. I mean, you don't need counseling, but anyway.

Josh:

No, yeah, Becca's super power is definitely her creativity and her eye for design is unmatched. I tell her this. I would throw her, I would put her up against any other graphic designer in the world. Becca will come out ahead. She is that good.

Brett:

I've seen the stuff. You're not lying. This is good stuff, for sure.

Becca:

Thank you.

Josh:

Yeah. She is just incredible. And everybody that sees her stuff is like, "You did this? You actually created this?" And even myself, I'm like, "Wait, you did this yourself?" I'm always, every day, impressed. I mean that's her super power. But it's not that she's just a designer only. She also understands the business side as well, which is very important. So it's not this frivolous, "Let's go produce blankets just because I want to produce blankets and I'm just passionate about blankets." She's smart enough to trust me and to also have a conversation to say, "Hey, here's the next product that we're going to launch." Because of that, again, we're very complementary to each other in our skill sets and that's what's allowed us to succeed as a business but also succeed working together as a couple. And it's just fun.

Brett:

Yeah, that is phenomenal, you know, really cool. I want to key in something because I think there's some good business lessons here. Becca, you mentioned it about Josh that Josh is really good about learning what it takes to succeed in something and then goes really deep on that. As an example, what does it take to build a great team? And how do you hire people? How do you people on? I think that's such an important skill set.

Brett:

I'll make a quick sports analogy. I coach basketball but I also love football. I like sports in general. I coached at the varsity level, basketball for a while and had a great athlete who played for me who was a pretty good basketball player. He was a phenomenal football player, though. I remember just talking to him about, "Hey, I'm going to try to connect these things here for you that how important is foot work in football?" "Oh, super important." "Foot work is really important in basketball too. But they're very different." This guy was trying to make football moves on the basketball court and that doesn't work. But just understanding okay, foot work is important but it's going to look different in these different scenarios.

Brett:

So I think that's key, understanding what are the elements that make up success in this piece of the business. How do they relate? How do I master them? Can you elaborate on that, Josh? What's your approach to learning a new thing? And do you like to go deep on something and do it yourself? Do you like to understand something and then hire someone our outsource it? Or elaborate on that a little bit. I know it's a long winded question.

Josh:

Yeah, you're going back to personality assessments, if you will. I took the Colby Assessment. That one has me listed as a really high quick start, which basically means I'm really good at seeing a vision and being able to help it come to fruition. More on the quick start of I can think very creatively and generate new ideas. And that's one of the key aspects is being able to take an idea and then, for me, I get very bored as soon as I figure it out. So as soon as I figure it out, I'm like, "Oh, that's boring."

Brett:

You figure it out and then get someone else to do it for you. Right?

Josh:

Exactly. That's exactly it.

Becca:

That's his life story.

Josh:

So every month, I have... And this is my plans for 2021... Every month or per quarter, who is it that I'm going to bring onto the team? Because the way that I'm approaching it and the way that I've done it thus far is go dive all in on something I'm learning. Right now, it's email marketing. Go all in on email marketing.

Brett:

Good choice. That's going to be an endeavor that really pays off, no doubt. I'm sure it already has.

Josh:

Well, it hasn't yet because I haven't really put in too much time and effort. It's been half baked thus far. But hopefully it does pay off. But go all in learning the best tips and practices. Create some SOP's around it. Hire somebody that, again, is even smarter than I am. Then they're able to take the SOP's I've created, expound on them a lot more and then we just keep layering on. That's how our business has been able to succeed so quickly, I think, is that I'm able to find the right people and plug them into the right spot in the business with very high likelihood of success.

Brett:

Yeah, that's awesome. Have you guys heard of the book, Who, not How? It was actually mentioned at the war room event. That's where I first heard about it.

Josh:

That's because I'm the one who mentioned it.

Brett:

You were the one who mentioned it, okay. That's tremendous. It's such a good book. And I think that is a great way to approach business and life, is thinking about who, not how do I solve this problem. I think what you described, though, is a slight variation of that. And I think a lot of people will work better doing this the way you do it. I know I do, in a lot of cases. Where you want to go all in on something and understand it so you can see how it fits in with the business and so you can know how to better coach and help someone. But then don't do that forever. I then find your who. Find the who to get the how done, which I think is super smart.

Brett:

Can you guys share, what are some lessons you learned from failures? I think we all learn from good stories. Sometimes we only want to talk about successes. But a lot of times, I know, for me, I learn a lot from failures. Can you guys think of any specific ones, maybe, that are not too revealing or too embarrassing? But have free rein to talk about whatever you want to talk about.

Josh:

Yeah, I'll go first.

Becca:

Okay, because I'm still thinking.

Josh:

I'll go. I have some ideas. This goes along that same thread of hiring really good people. That's definitely been, I'd say, now we have a good high likelihood of somebody succeeding whereas before that definitely was not the case. We hired, last year, in fact, we hired three new people, full time, full fledged employees. And very quickly we realized, "Yeah, this isn't going to work out." What we've learned-

Brett:

All three? None of the three worked out?

Josh:

Yeah, all three.

Becca:

Struck out.

Josh:

Yes, it was real bad.

Brett:

I have found, though, just as a side note. To get really good at building a team, I don't know any other way around it. You're going to have at least a few hires that you're like, "Oh, that was terrible. Why did I hire this person?" I think you just have to. You have to go through that. I know almost no one who is like, "Oh, no, every hire I've had is good." It just doesn't happen.

Josh:

Yeah. And in addition, there's preparation on the business side as well. Are you ready? Do you know exactly the role they're going to be playing? That's why I like to do a deep dive myself. To be like, "Okay, these are the KPI's that they should be meeting on a monthly basis." And again, that's what we learned from our first experience. We have this pie in the sky idea of, "Ooh, we just want more product designs." Well, okay. Or, "We want to just blow up the marketing." Well, okay. How?

Brett:

Job description: blow up marketing.

Josh:

Yeah, blow up the marketing. Anyways, one thing that I think that your audience can take away from this, we found a lot of success working with overseas contractors. That they do a very good job with us. Number one, we've seen that their work ethic is just as good, if not sometimes even better than any of our U.S. based workforce. And they're just hungry to work and they're just as capable and smart as others. But it allows us to identify people. Very quickly bring them into the business without much risk on our side. Because that was a whole big mess when it was like, all right, we now had to register and do all this paperwork in all these three states that we'd hired different people from. Then unwinding all that was a mess in and of itself. So hiring a contractor is quick wins. Or if it doesn't work out, it's easy-

Brett:

Just get another contractor. You don't work again. Yeah, I think there's several lessons there. And this is something that we've really gotten pretty good at as a company, is onboarding new team... Finding and attracting the right team members. Onboarding them for success. And I will say, and I'm super proud of this from our team's perspective is that we've had a lot of really good hires over the last year and a half or so. When you make a great hire, someone that fits your culture and they fit the role, it's jus a beautiful thing. There's almost nothing more fulfilling as a leader to see someone you've brought on really succeed in what they're doing. I'll piggyback on a couple of things you said there, Josh.

Brett:

One, we've used the contractor turned employee approach a lot, especially with a specialist. We need a Google ad specialist, an Amazon ad specialist, a YouTube specialist. We've got a vetting process. We've got an interview process. We do a personality test, all kinds of stuff. Then we'll say, "Hey, let's work on this project together. Here's the project. Here's exactly what we want you to do. Here's what success looks like." We'll do a couple of those. And if that goes really well, and the team likes this person, then we'll make them an offer.

Brett:

What's so cool is now we're a team of about to be 44. We just hired three new people starting this month. The team really protects the culture. The team is pretty passionate. They'll interview and say, "I don't think this person's going to fit. I don't think they're going to cut it here." That's an awesome thing. So I love that, going from contractor to employee, or maybe someone just stays a contractor.

Brett:

I think one of the things... And we haven't done... We have not done much with hiring people overseas. But I know a lot of people that do. I think it's a great approach. I think what a lot of people do when they hire someone overseas, is they really spell things out clearly what they want done. These are the tasks. This is how I need it done. This is what success looks like. But I don't think people necessarily do that when they hire a full time U.S. employee. They don't take as much time to explain what they want. Or at least that's just been my observation.

Brett:

I think success, however, you go, is the same. Clearly map it out. Make sure you're ready as a company to really set someone up for success.

Becca:

The nice thing about that too, is if something happens to them or they get sick or they take a different opportunity, at that point, you've laid out the process. So that part of it is done. You just need to plug in the right person. So we have, that's been really nice for us. You put in that time up front to figure out that process, to figure out their tasks. Then if something comes up, it's not as stressful to replace them.

Brett:

Really good. So Becca, did you think of lessons learned from failure?

Becca:

For sure, yeah. I think one of the biggest things I've learned as our business has continued to develop and change is being able to let something go regardless of how much time you've put into it.

Brett:

That's a good one.

Becca:

For me, that could be a number of things, whether it's a photo shoot or a product design. It can apply across the board. But I know there have been times with designs where whether we put it out to our audience and they don't like it, or the product fails on Amazon, or I just need to take the time to redo something, I need to be able to let myself and let it go. And it doesn't matter that you spent all this time doing this XYZ. It's not the right fit. That can be hard to do. It can be hard to let go of something that you feel like, "Well I like it. I put all this time in." Or once you take a step back and you're like, "Oh, it's not really quite what I think is going to work." But making myself be like, "All right, then we're going to start over. We're going to scratch it. We're going to let it go." That can come in a lot of different ways: creative ways, business, so yeah.

Brett:

Yeah, I totally... First of all, that's a fantastic point. I think this is very clearly illustrated with an art project or something like a design that you create. But this totally applies to other things too. It's just not as clear. You've got refined taste. Right? And you're helping Josh refine as well. But you know what looks good from a design standpoint. You may pour your heart and soul into a new design and think, "Man, this is good. This is really good." But then it sounds like you maybe had a couple of those where people are like, "Eh, I don't like it." Or the marketplace just doesn't care for it. That hurts. I think you may have a tendency... Have you ever had this thought where like, "Oh, people are just wrong. They're just wrong. Because this is good. I know this is good."

Becca:

Yeah.

Brett:

Yeah. Having that ability to say, "Hey, it's cool. This just didn't connect for whatever reason. I'm not going to get... Even though I put my heart and soul into it to try and make it good, it didn't work. I'm going to move on. I'm not going to be emotionally attached."

Brett:

We do the same thing. It's not as clear, I think this way. We do the same thing with business ideas. Either processes or procedures or this is the way we've always done things or whatever. "No, this was my business idea. This was whatever, so I'm going to stick with it."

Brett:

I love the way... I heard this quote about Steve Jobs one time. It's actually from the book Radical Candor, which is a fantastic book. Highly recommend it. The author was having a conversation with another tech superstar. I'm drawing a blank on who it was now. But they were like, "Man, Steve Jobs always gets it right." And the author was like, "What do you mean Steve Jobs is always right? No one's always right." And the guy said, "No, no, no. I didn't say Steve Jobs is always right. I said he always gets it right." And he would sometimes take credit for ideas that weren't his and what not, if you ever like to read his biography. It's interesting. He was very willing to say, "Oh, you're right. That's a bad idea. We're going to do this other thing."

Brett:

Even there's a story with the Apple stores where super close to when they were going to launch the first Apple store. Ron Johnson, famously came to him and said, "Hey, I just thought about this. We need to redo the whole concept." And I heard that Steve Job threw a bit of a temper tantrum, got angry, and then was like, "You know what? You're right. We're going to redo the whole thing." And they were both right. Apple stores are amazing. So having this quest to get it right but not necessarily to be right, I think, is key in business, for sure.

Becca:

Yeah, and starting out with that fresh perspective when you do need to change and pivot. Letting, totally letting it go and pivot and be all in and pivoting, for sure.

Brett:

Yeah, and not let in any bitterness or whatever. Just, "Hey, it's okay. This didn't work. It didn't come through for a reason. No problem, next. Let's move onto the next thing."

Josh:

And that's one thing that we've tried to embed in our culture at Hadley Designs, is we A, we want to fail fast. I'd rather just create a product idea or whatever idea it is or initiative. Let's try to get some wheels under it sooner than later, rather than, "Oh, let's sit and refine this process and make sure it's perfect." Just to kind of proof of concept. But then secondly, going back to your point of I'm not always right. Becca's not always right. With our team, it's, I've told them and I'll jump on our phone calls and I'm like, "I want you to don't just take what I tell you and say, 'Okay, I'll go to it because Josh said so. He's the CEO.' I want you to think through and be like, 'Why does it have to be done this way? Or 'Why are we doing?'

Becca:

Is that the best way?

Josh:

'It like this? What about this?'" And every single one of our team members has, just in the last week, has come back to me and said, "Well, have you considered this?" Or, "Why does it have to be this way? What about if we did it XYZ?" Anyways, it's been so powerful because that's where Becca and I, again, going back to us working complementary to one another. It's like I can bring a product idea to her and it will be a decent product idea. But then she goes and takes it to the next level and I'm like, "Ooh, that's a lot better." That is where the secret sauce is for us. It's all in the team members. It's all in-

Becca:

Collaboration.

Josh:

The collaboration and people being able to speak up.

Brett:

Yeah, I love that. One of the things we talk about internally is, let's encourage some disagreement. If we're always agreeing about everything, then some of us are unnecessary or somebody's not really speaking their mind. One of the things that I did just recently, a newer team member, one of our account managers, called something out on a client's Slack channel. She had noticed this and this just doesn't look right to me. She asked some really tough questions. Some questions that maybe other people would be afraid to ask because it might make a team member look bad. Or it might hurt someone's feelings. I just went on and on complimenting her for doing that. I called it out in the channel. That was awesome. At our next Monday morning meeting with the whole team together, I called it out specifically and said, "Hey, this is what we need. This is why we need it."

Brett:

It turns out there was actually a great answer that she was looking for. But that wasn't the point. The point was that she posed the question and she brought it up. I think I mentioned this on a podcast before. We adopted a line from the T.S.A. where if you see something, say something. And also you will not be appreciated... You can never say after the fact, after something's failed, "Oh, I thought that was going to fail." No, no, no, if you think something's going to fail, say something then. Don't wait. So, anyway.

Josh:

I like that. See something, say something.

Brett:

See something, say something.

Josh:

You have to. It's an anthem.

Brett:

Yeah, it's catchy.

Josh:

Get some of the T.S.A. posts and put them up around the office.

Brett:

It's the only thing I would probably recommend you swipe from the T.S.A. to put in your business is that motto. Cool. So what about some lessons from successes? So, Becca, some lessons you guys have learned recently from successes? Because there's also this great principle, and I hear Jim Collins talking about this, where it's actually one of the greatest tragedies in business is succeeding and not knowing why you succeeded. Because then you can't duplicate it and then you can't build upon it. And then it's, "I don't know how this happened. It just did." Any lessons learned recently from successes?

Becca:

I think it probably sounds simple but taking just customer feedback and client feedback, especially when it does come to designs. We've seen how powerful it is to put multiple ideas out there, to have people feel like they're a part of the creation process, that their opinion's been heard. And that can be getting them excited before a product launches along with steps of design. Having them pick this color set, versus this color set. Having them put-

Brett:

How do you facilitate this? That's a super interesting concept. I hear you guys talk about getting feedback and stuff. Do you do that through a Facebook group? Or what do you use to facilitate that?

Becca:

Yeah, kind of all across the board. We have a Facebook group. I'll do it on social media. We've done it with email surveys, with mini-chat. So just all across the board. Because you're going to get different people that use different platforms. So kind of trying to hit in all the different things to help people be a part of it. But they're the ones that are buying the products. Their opinion is, obviously, super valuable. But they also just, people like to be heard. It's been, we get great numbers of feedback, of response percentages. And then their feedback is really helpful. Oftentimes we'll get ideas of, "Hey, you guys should do this." Or, "What if you made this?" Or, "I really like this." So just really being open to that, I think, has helped us be successful. Again, you have to take their opinions and understand them and appreciate them and then implement it. I think that's been a good success for us.

Brett:

Yeah, it's so good. It is simple but most businesses don't do it. I think one, you've got to ask. You've got to take the time and energy to build these communities where you can ask. Then you need to really listen to what people say. I think this is something valuable, and you mentioned it. People want to be heard. You ask for someone's opinion and then they give it, that's satisfaction right there to a certain degree. People love that part. But then if they actually see that thing being created, they're very likely to buy. And they feel like, "Wow, I'm connected to this business." They're also more likely to share it if they feel like they had some say in it being created. It's just a super powerful approach, for sure.

Becca:

Yeah, they had a part in it. I don't always love changing every single color of something to approach with a different color pattern. "Oh, do you like this color versus this color?" It can be tedious and annoying. But like you said, I think people then feel like they have some ownership and they're excited.

Brett:

Yeah, I love that. Josh, what about you, lessons from successes? These could recent successes. These could be successes from the early days, back when you didn't have fancy chairs. It could be whatever.

Josh:

Back when we didn't have fancy chairs, a month ago? Yeah.

Becca:

So true.

Brett:

In internet years or internet time, that was a long time ago.

Josh:

Yeah, it was, definitely was. So we'll take it back to pre-Corona which feels like ages ago.

Brett:

That feels like another life time, for sure.

Josh:

For real. A lesson that we've learned in a success was we were primarily... If you would've asked us pre-Corona, "Oh, what business are you in?" "Oh, we're in the party goods, helping people celebrate birthdays, baby showers, bridal showers, etc." Well with COVID, that just blew it up our spot in a bad way. I said blow it up with marketing, in a good way. So, it blew it up-

Brett:

Negatively.

Josh:

In a negative way. It was really really scary. We were going back to revenue numbers that were when we first started our business.

Brett:

Yeah, when you're locked in your house, you're not buying party favors and special wedding invitations. You're not getting married right now.

Josh:

It was a really scary time. But one thing I would say that we did do, is we stuck out our neck, in a way. It forced us to go compete in what I previously would have considered a more competitive market in Amazon. There's lots of players. There's tons of reviews on those competitor's products. Definitely I would've tended to shy away from that before. But it was home-school related.

Brett:

We're all home-schoolers now.

Josh:

We knew that was the trend was everybody's coming home. Because we were able to say, "Okay, we see this trend. This is only going to pick up. And we see some people that are not actually serving customers on those key words of home-school specific key words." Yeah, the main category is super competitive. But if we can get out start in some of this niche, home-school related category, then we can explode. Well, long story short, we went ahead. It was a lot of money to invest into this new product. It was our best. It still is our best selling product right now. We launched it without advertising and it started to sell hundred a day.

Brett:

That's crazy.

Josh:

I was like, "Oh my." I've never seen that happen.

Brett:

Yeah, I know. I almost never hear... I don't think I've ever heard of that, specifically. And what's great about this is your core business, all those products are going to come back. We're all going to have birthday parties again. We live in the Midwest. There are people in Texas and Missouri who are like, "Hey, forget it. I'm having a birthday party anyway." Some of that's probably coming back. But it's going to be back to normal at some point in time in the future. But now you've got this whole other product that's in a very competitive niche that's exploding. I love hearing those stories where pandemic forces us to pivot and think about something new. I think that's always going to be the case in business. Hopefully, there won't be another global pandemic but there'll be something that will disrupt or create an opportunity, the perfect chance to pivot into something new.

Brett:

Let's do this. We're up against it. We're about out of time. Any other final tips you would share? These are a few of the nuggets we've learned from building this business that you would want to share with other eCommerce entrepreneurs.

Josh:

I'll go first and then you have some ideas?

Becca:

Sure, yeah.

Josh:

Okay. I'm always, I'm never the one shy to talk. But she's like, "Go ahead."

Brett:

You were the one, when we met in Austin, you were the first one that spoke, which is cool. I'm pretty outgoing. I say, "Hi," pretty quickly. But you were the first one that spoke so that was cool.

Becca:

That's why I said the corner of the street doesn't come as a surprise to anyone. "Oh, okay."

Josh:

"Does that guy shut up?" Anyways, now I forgot what I was going to say. What was it? What was the question?

Brett:

The question was any final tidbits, lessons learned that you would share with other eCommerce entrepreneurs?

Josh:

Yeah, going back to where we started, even though I would say I was a born entrepreneur, if you will. I was the one with the candy stand on the corner of the street at a young age. Always knew I was going to be in business. But I had no idea where I would actually fall in business. I would say I'm a risk taker but not at the same time. I was never willing to be, "All right, Becca, we just graduated school. Let's go build our own business and live off of food stamps for the next year or two." Not that type of risky entrepreneur. More of that safe bet. So that's why I had my job with American Airlines. It allowed us to very comfortably continue to reinvest into the business. For the first, I would say the first three years, all the money we made just went straight back into the business.

Brett:

Amazing.

Josh:

Back into the business. I mean, we did six figures our first year doing custom wedding invitations. It wasn't a small amount of money. It wasn't like, "Oh, yeah, we made a thousand bucks." It was a good chunk of money.

Brett:

A lot of people would be wanting to take a piece of that.

Josh:

Yeah and it would've been fun. But we knew that our vision was always much bigger. It allowed us, again, a lot of people aren't, don't have that amount of savings. We had a lot of savings, eventually, to go in and go into all these really competitive product categories like I just shared and be like, "All right, we've built our war chest. We're ready to go to battle now." But that took a long time to build up. And always having a bigger vision than what you just see right in front of your face today.

Brett:

Love it. Know what you're working towards and what that vision is. That really helps guide decisions. Makes it much easier. "Hey, do we spend this or do we save this? Well, we're going to save it because we're going to do this thing next." Awesome. Becca, what about you? Any closing thoughts, final tidbits for the audience?

Becca:

Yeah. I think, again, it sounds simple, but being able to put in the time and the effort. We work very hard and we have ever since we began. I strongly believe that I will... I'm not afraid of whoever comes along because I know how much harder I'll work than the other person. But I think a big part of that comes from the fact that we're both very passionate about what we do. For us, it doesn't always feel like working. Sure, sometimes there's stuff we don't want to do that's tedious or whatever. But we work harder. We're always going to work harder than the next person. We're going to put in the hours. We're going to stay up 'til 2:00 a.m. working. I'm going to keep putting, we're going to keep grinding. We always have. That's been a huge thing that I feel like has set us apart from a lot of people.

Becca:

We are willing to sacrifice, to put in the time, to work hard. But again, it's a passion. Making sure that whatever you are doing, you do need to be passionate about it or that grind is going to feel like a grind. For us it doesn't always feel like a grind, although we don't take as many breaks as sometimes you'd like. Finding that passion and then just going all in and working as hard as you absolutely can and it really will get you ahead.

Josh:

Yeah, I love that. I want to just piggyback on that real quick. That is one thing that I would say is both our our super powers, is just hard work. We will outwork anybody. I mean, like I said, we're staying up 'til 2:00 a.m. and raising a family. We just have it on all day but we also enjoy what we're doing by the same token. So it's funny, during the pandemic, everybody was watching Tiger King and everybody's like, "Oh, have you seen it?" It's like, "No." We don't spend any of our time-

Brett:

We're building something here.

Becca:

We're a little busy.

Josh:

Anyways, there's one quote that I have in our office that I had Becca put on a picture of a lion. She was like, "This is turning into just a man cave over here." Anyways, but it says, "It's not about who has more talent. It's about who is hungrier." I love it. That's what I love. Come into work with each day. It doesn't matter if the other competitor might be a little bit smarter than I am. I'll work a lot harder.

Brett:

Yep, that's something you can always control. You may not be... You can't control whether you're smarter than someone else. But you can always control who's going to work the hardest. I think, also, a couple things you talked about. You talked about tenacity, Becca, and having passions. Those are the things that I think make business fun. Yes, financial success, seeing the growth, dominating a new category, getting those wins, that's super fun too. But if that's all you're going for, some of that fades. But if you enjoy the process and enjoy what you're doing, that, combined with financial success, that's the ticket right there. That's the winning element.

Brett:

So, man, Josh and Becca, you guys nailed it. I know you've already talked about this. This is going to feel like new news to the audience, not to me. You guys should start a podcast. You guys should do some podcasting here.

Josh:

I know.

Becca:

We would like to.

Josh:

That is an idea that we have that we would like to create.

Brett:

There you go. You heard it here first, unless you guys said it somewhere else, then maybe you didn't hear it here first.

Josh:

No, right here on the OMG.

Brett:

Josh and Becca, the Josh and Becca Show, coming to an iTunes app store near you. Awesome. Guys, thank you so much for coming on. This has been fantastic. Appreciate you sharing the time.

Josh:

Yeah, thank you, Brett.

Becca:

Yeah, thank you.

Josh:

It's been a lot of fun.

Brett:

Awesome. And as always, thank you for tuning in. We couldn't do this without you, obviously. We would love to hear feedback from you. What would you like to hear more of on this show? Also, if you have not done it, we'd love to get that five-star review on iTunes. And so with that, until next time, thank you for listening.

Episode 150

:

Bob Regnerus - Feedstories

3 Things Facebook Advertisers Should Do Right Now

Facebook is still a land of opportunity, but it is NOT currently smooth sailing. The most powerful storm right now, privacy concerns.

Facebook is still a land of opportunity, but it is NOT currently smooth sailing. The most powerful storm right now is, of course, privacy concerns. Namely, the iOS 14 update and how it will impact advertisers' ability to track and optimize campaigns. Facebook’s ability to track users everywhere online as they did in the past is going to be severely limited. Whenever I talk to Facebook advertisers right now, uncertainty is the best way to describe their outlook on the platform.

In this episode, Bob and I tackle some really key issues facing Facebook advertisers right now. How do we continue to scale and maintain CPAs in the face of privacy changes? What kind of video ads are working right now? What data do we focus on and optimize toward when some data is taken away? Bob is the author of a brand new book - The Ultimate Guide to Facebook Advertising (4th edition). And he owns a company that specializes in creating authentic video content called Feedstories.

Spend 80% of your time on your offer and on your creative
What is the conversion API and why you need it
The power of interview-based video ads
How you should think about audience targeting right now
How targeting based on engagement metrics such as watch time on a video ad can be just as effective or MORE effective than retargeting landing page visitors.
While Facebook is pushing for shorter videos Bob is finding success with :60 to :90 videos consistently
How changes in online platforms is creating a renaissance of sorts for marketers

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Mentioned in this episode:

Perry Marshall

California Consumer Privacy Act (CCPA)

“Tested Advertising Methods” by John Caples

John Caples

Facebook Pixel

Facebook Integration on Wordpress

Facebook Marketplace

Bob Regnerus and Brandon Boyd

Bob Regnerus - Co-Founder at Feedstories

Feedstories - Videos that Sell

Ultimate Guide to Facebook Advertising

‍

Episode Transcript:

Brett Curry:

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 Facebook ads and testimonial ads, testimonial videos. Both of which I'm passionate about and those that are longtime listeners know I'm not a Facebook guy per se, I'm a video marketing guy though and I absolutely love testimonials and using testimonials in videos.

Brett Curry:

My guest today is Mr. Bob Regnerus and he is the co-founder of Feedstories which we'll get into all that Feedstories does later in the show. He's also the author of the 4th Edition of the Ultimate Guide to Facebook Advertising in partnership with Perry Marshall on that book, Perry is a friend of the show. And so really excited to dive into these topics. And with that, Bob, welcome to the show man, thanks for coming on and really looking forward to this.

Bob Regnerus:

Yeah, looking forward. Always good talking with you, Brett. And we'll just have a little bit bigger audience this time.

Brett Curry:

There you go, I like it, I like it. And yeah, so excited to dig in here, very cool. First of all, congrats for authoring the Ultimate Guide to Facebook Advertising. I know the pain and sacrifice it takes to be an author. So I wrote the Ultimate Guide to Google Shopping that Shopify published. But that was more like a supersized guide. You wrote a real book, a real, real book and so congrats on that.

Bob Regnerus:

This is the real book. This was 19 months of my life.

Brett Curry:

Dang, yeah.

Bob Regnerus:

It was March of... geez, March of 2019 when Perry tapped me on the shoulder and so from that day forward, a lot of research, and yeah, I think we ended up at about 350 pages and there was about 150 that we cut out. So it was challenging. Not only did we have to write all of that, then do the pair it down so we had a really efficient book. Yeah, I've written a few but this has been my biggest undertaking of my career for sure.

Brett Curry:

Well congrats. Yeah, I've heard the editing process can feel like surgery, you're amputating limbs and things like that, that's what that process is like. So really excited to dive in. I know you and I have kind of collaborated together on a couple intestinal type projects. So your company, Feedstories, is very good at getting testimonials and doing that remotely and so we'll talk about some of the cool things surrounding that. Let's talk about Facebook advertising. Let's just talk about the state of Facebook advertising here where we find ourselves in 2021, all kinds of concerns going on, right? There's increased privacy and potentially lack of tracking and attribution which is always an issue, always potentially confusing, and that looks like that's maybe only going to get harder.

Brett Curry:

So let's talk high level. And you and I were talking kind of off... or before we hit record, most of the eCommerce Evolution listeners are pretty advanced, they're grown, they've got a great brand, probably spending a decent amount on Facebook already. Maybe dabbling into YouTube and using some of our resources for that. But what are some of the strategic considerations if someone's looking at, "Okay, how do we navigate this year and beyond," what are some of the big strategic considerations from Facebook ads right now?

Bob Regnerus:

Yeah. It's a good question. There's going to be more and more talk about this as we head here into 2021. So I think if anybody realized what happened during the 2016 election and the fallout from that, what we're hearing today should be of no surprise. We're all familiar with the Cambridge Analytica "scandal." I don't feel like it's a scandal but, I mean, Facebook basically had an open portal to all their data and a company, Cambridge, kind of figured it out and leveraged it to help elect the president. And from that, the fallout kind of... it's been a snowball, is probably the best way to describe it in terms of what's happening now for us advertisers.

Bob Regnerus:

So a couple things have happened. Number one, we've lost a lot of our ability to target. So we're already fighting with that. That's number one. But what's happening now is there's been a surge from... this really started in Europe, GDPR, California, of course, is always kind of in front of things with this and so CCPA. But what we're really seeing here is Apple is the first large company to really kind of take a step forward and say, "You know what? We're going to stand up for privacy."

Bob Regnerus:

You put Apple, Amazon, Google, Facebook, you put those four together, Apple's the one that kind of stepped in front of the line and said, "You know what? We're going to start putting some controls on privacy because it's getting out of control." I think as a consumer, Brett, we look at that and go, "Well, that's a good thing, right?" I think we all want to have a level of privacy and when we don't really understand what the big companies are doing with our data, it's a little scary.

Brett Curry:

Yeah, for sure.

Bob Regnerus:

Right?

Brett Curry:

And just a quick note for those that don't know, I think most people who listen probably do, but CCPA, that's the California Consumer Protection Act, correct? And then-

Bob Regnerus:

Okay, yeah.

Brett Curry:

GDPR is just the British equivalent or the European equivalent of that, right? Just looking at more privacy, more protection for the shopper.

Bob Regnerus:

Right. In essence, a lot of work for your web master developer and lawyer.

Brett Curry:

Yeah, no kidding. No kidding, yeah, for sure.

Bob Regnerus:

We thought we were avoiding it, but here we go. So from a marketing perspective, so we're trying to sell our products and services. Like the ability for us to leverage what the big companies do for us, so in this case Facebook, we could say the same thing about Google, but it's really allowed us to micro target and find customers. What big companies know through the Facebook pixel and what people do on the Facebook platform has made using look alikes and artificial intelligence really kind of a dream. It's almost like an easy button now. And really what's happening now is there's going to be a fallout from all this. Facebook knows it and you know Facebook is scared when they take out a full page ad and do a full PR campaign basically campaigning against Apple.

Brett Curry:

They know that's going to be a major revenue hit for them, yeah.

Bob Regnerus:

They do know, right? And that's why they're so aggressive with this. I just got off a coaching call and one of the things he said is, "Well, what happens when two Goliaths fight? Who wins-

Brett Curry:

Lawyers get rich?

Bob Regnerus:

Yeah. I can guarantee one thing, we as marketers will lose, right?

Brett Curry:

Right, right.

Bob Regnerus:

No matter what happens here, we're going to lose some things. So essentially what's happening is there's going to be a lock down on Apple devices. So we're talking iPhones, iPads, Macs, there's going to be a prompt, if you are going to use Facebook there's going to be this big scary prompt on an Apple device that basically says, "Hey, let Facebook use all my data." Or more importantly it's going to be, "Hey, don't let Facebook use my data." So what's going to happen? Well, the first thing that's going to happen is we're going to lose some tracking capabilities for sure. It's not like we're going to find a way to necessarily get around it but it's going to affect us as marketers. So tracking is going to become an issue.

Bob Regnerus:

Facebook has already talked about creating algorithms that model, they're going to try to create models to replicate what they have but it's going to be very difficult for us to track sales and visitors and anything outside of a seven day window they're basically capping their attribution at seven days. Right now it's 28 days. So that's going to be a big change.

Bob Regnerus:

Well there's two other things. I'll mention one which probably is not as important but this is going to really disrupt the app industry. All those games that we love playing on our phones for free, those are all supported by ad revenue. And in the middle of the scrabble game or in the middle of a game of solitaire we get interrupted by a 15 second commercial, that's all powered by the Audience Network which Facebook owns. And it's ad space so that essentially is probably going to go away. We're going to see people who rely on revenue from apps, they're going to have to switch to a subscription model if they want to stay relevant.

Bob Regnerus:

So the Audience Network is going to... it's kind of a wild west but it's going to be a place where that's going to be very difficult for us to advertise on now. So that's going to mean a change to what we do but what's going to affect us more, Brett, and especially those listening is the ability to track on site events. So website visitors and add to card and purchases and those things is going to be... I hope I can use this word, it's going to be crippled a little bit. We're going to lose some of the effectiveness and I'll go over here in a minute some ways we can kind of mitigate that but we're going to see a substantial change to our ability to track and build audiences off of people that visit our website, that's going to be the biggest fallout of this.

Brett Curry:

Yeah. It's super interesting and you made an interesting point that I agree with at the top of this that, as a consumer, as a shopper, I like the idea that maybe I'm not being tracked 100%, right? That there are these big companies that essentially know everything about me. I don't know, I actually like the convenience of it too, honestly. I have a really hard time unplugging my marketer's brain but I do see that from a consumer standpoint, okay, this may be a good move. The marketer in me, though, sees these challenges, right? And sees them very clearly where we've really gotten kind of into this amazing era or machine learning, subset of AI where we're now, some of the smart bit algorithms that Facebook and Google use are really allowing us to do amazing things.

Brett Curry:

On the YouTube side, we're scaling ads from 10,000 to 30,000 dollars a day, sometimes profitably with a good YouTube ad. That's not that that's going to go away completely. I don't believe it will. But doing it the way we're doing it, it is going to shift. Now I will say, and I'll get a little bit historic here as I talk about marketing but I was actually... so I went through reading a bunch of marketing classics years and years ago. And one of the books that was recommended to me, probably when I was in my early 20s was... Oh no, Tested Advertising Methods by John Caples, right?

Bob Regnerus:

Yep.

Brett Curry:

And so John Caples, one of the all time copywriting legends, we know in his day they tracked everything by mail order, right? And so online didn't exist, none of that existed, right? Computers didn't exist at the time. So they would send out different ads and they would have different mailing addresses where someone would have to mail their coupon to and then they would know because, "Hey, I received this coupon at this address that was this ad." Right? So marketing's always going to be about having the right message, a compelling message, to the right person at the right time and we're just going to have to get creative. We're going to have to maybe think about... just to use a really quick and rudimentary example, different landing pages for different creatives.

Brett Curry:

We have to go old school first a little bit. But I do think, and you mentioned that Facebook is working on models, AI and machine learning are not going away. We'll still be able to leverage it, it's just going to be a little bit different. And so I think in some ways it's going to favor the smart marketers or the marketers that can really pivot and adapt. But challenges on the horizon, right? Rough waters ahead for sure.

Bob Regnerus:

Well it's going to affect the average advertiser and the beginners for sure because a lot of the things we know, it's just because that's the way we had to live a number of years ago. So obviously we're aging ourselves a little bit here but there's really been an easy button with digital advertising here the last five or six years for sure. But you're right, you're going to have to be smarter about the way you segment things. So what I told my client this morning is, "I'm putting a renewed emphasis on building your own list." The idea of we're not just going to rely on Facebook to track our people anymore. It's going back to I want to move them to a media that I have a little bit more control over. Obviously we know from what's going on currently, apps can get shut down, websites can get shut down, email services, right? So diversification is probably the most important thing we can think about.

Bob Regnerus:

Not only diversifying your media but diversifying how you communicate with your customers and prospects. So I think there's going to be renewed emphasis on building out forms to get email addresses and connect with people. But yeah, it's more rudimentary, right? I mean, it's more efficient to have a single landing page and let the pixel handle everything. I guess we're kind of taking a step back in that way. But-

Brett Curry:

Yeah, yeah. We might have to.

Bob Regnerus:

That might be the reality of it, right?

Brett Curry:

Exactly.

Bob Regnerus:

Is we're going to have to create different landing pages. And from a technical side, there's probably things you can do on the server and things like that to do better tracking. But in reality, what we're talking about is some of the really cool things that we can do inside of Facebook, segmenting audiences, website custom audiences specifically, based on when they hit our website or what part of our website. I've got chapters in the book about how to use that, right? And some of that capability is going to be taken away.

Bob Regnerus:

Now, not 100%. It's not like that's going away. There's things that you could do and maybe this would be a good time to get into it. There's really three things that you should be doing as a Facebook advertiser or if somebody's doing it for you, you should be checking into. The first is what's called domain verification. So inside of Business Manager, there's a brand safety link. It's very easy, this is something people have done for other services but you want to get your domain verified. So it's either putting something on your domain or uploading a small file to your web server that basically allows Facebook to uniquely identify your domain that you own it. That's the first thing to do. The second thing, if you're using something like Shopify, and I know a lot of our listeners are probably using that platform or one of the other major ones, they've already integrated a new version of the pixel which Facebook calls their conversion API.

Bob Regnerus:

It basically allows the server, at a deeper level, to do the tracking that we're really used to at a more cursory level with the Java Script portion of the pixel. But using conversion API is another way for you to be able to do this. Good news is even if you're not on eComm platform, let's just say you're using WordPress, the official WordPress plugin that Facebook has has been updated. So if you haven't updated that plugin, I would go ahead and do that sooner than later. That has the conversion API built in as well. And really what it means for us, Brett, is that it's going to allow us to track more people accurately than we have before.

Bob Regnerus:

And there's one more thing in regards to the pixel, I'll just mention it here, is there's something called advanced matching. And so when you put a form on your website, obviously people are putting in their name, their address, phone number, email, things like that, Facebook has the ability to obviously read the data that was inputted on that form even if there's not a pixel even from that, let's say the pixel was blocked, Facebook still is able to take that demographic information and match it to their database.

Bob Regnerus:

So even in that instance, advanced matching, you're able to sometimes get a match on something even when the pixel is blocked. And we have a client right now where we get 15% of our conversions are from advanced matching. So this is sent from the event setup tool. If you're not technical with of Facebook, whoever's handling your Facebook account can go in there and do that. But those are three things that you could right now that will help at least mitigate some of the fallout from this.

Brett Curry:

Yeah. And I think one important thing to note is Facebook is still going to be able to keep their data, right? Where they know that Bob is logging into Facebook and they see what you're liking and commenting on. They see what happens in their own ecosystem. Google is going to be able to still do the same thing, right? They see what you're searching for, they see what you're doing on YouTube, stuff like that. That's their ecosystem.

Bob Regnerus:

Well and that's really the good thing, Brett, let me jump in here is that anything that happens within the Facebook universe is completely the same. So one of the things that I talk about a lot and it's because our company does it but video, video custom audiences are still going to be valid even if you're using an Apple device that's blocking the pixel, Facebook still knows what videos you watched within the platform. It knows how long you watched it so a lot of the strategies we talk about in relation to timing content based on the number of seconds or the percentage of a video watched, that's still going to be there.

Bob Regnerus:

Lead forms, the lead form objective type is still going to be there collecting emails and data within Facebook itself, instant experiences. So all these interactive elements within Facebook ad platform now are not going away. And so it's a time for us to maybe shift away a little bit or not totally rely on landing pages and forms like that. But maybe shifting some of the focus to doing those types of things. And then the other thing that Facebook has done is both on the Instagram and Facebook platform is roll out these brand new shopping interfaces. So I think this is probably going to affect a lot of people, Brett, that you're working with and you're going to have to kind of have a second store like a Facebook store or an Instagram store setup to sell your products. And it's all fair game inside of there, right? So it's kind of like you've got Shopify and Facebook running at the same time, right?

Brett Curry:

Yeah, absolutely. And some of it's been discussed for a long time. And Facebook has kind of dabbled in it a decent amount. I know that Facebook Marketplace has really taken off, kind of Facebook's answer to Craigslist so to speak. Facebook's answer to Google shopping as an example, that really hasn't taken off. But it will one day. And actually I view it as a good thing. We do a ton of Google shopping but ultimately we just want merchants to be successful so if that means, hey, we can sell more on Facebook, that's an additional marketplace that we can sell on in addition to Google shopping and Amazon, then that's awesome.

Brett Curry:

One thing I think that we'll also do getting back to new information that Facebook can track, on the Google side, Google built what's called in market audiences where they can see based on what you're doing through search that, "Hey, I'm in the market for lacrosse gear." My daughter's playing lacrosse, so that's what came to mind. But I'm in the market for lacrosse gear. I just bought sticks and bags and balls and all that stuff. Now Google can build an audience around that, right?

Bob Regnerus:

Yep.

Brett Curry:

And Facebook can do the same thing and Facebook is doing the same thing now. But, again, that's going to be another component where, hey, I can see what someone is shopping for on Facebook and so now I can still put them in that in market audience. I don't know what they call it in the Facebook world but the equivalent of an in market audience. That's all data that Facebook is going to be able to use and that you're going to be able to use that shopper behavioral data, which is super powerful.

Bob Regnerus:

That's all there and Facebook really kind of pushed Google on that. Facebook was way ahead in terms of audiences-

Brett Curry:

No doubt, yeah.

Bob Regnerus:

Yeah...

Brett Curry:

One thing that I'll just plug really quickly is we talked to a lot of Facebook advertisers, a lot of people coming to us, they're spending 100, 200, 300,000 a month on Facebook and they want to do something on YouTube and look alike audiences and maybe we'll talk about audiences in a minute but look alike audiences on Facebook, I know they're so powerful, they're so good. And it makes sense that that type of audience would be just killer. Well, Google has their own version, it's called similar to audiences. And I'm a Google guy, I love Google, but they're not that good. They're not that good it's just hit or miss. Sometimes they have a similar to audience that crushes it, other times it's just kind of hit or miss.

Brett Curry:

We did see, and I'll be careful here because of some NDAs, but we got to see an alpha of some stuff Google's doing on a new version of similar to audiences, it's not called that, that looks pretty wicked amazing. But for now, Facebook is totally kicking Google's butt when it comes to look alike audiences, in my opinion, from my observation anyway.

Bob Regnerus:

Yeah. And it's based on two things, number one people spend a lot of time within Facebook's platform so they track all that behavior, right? They know what they like, they know what they read, they know what they comment on. So that's why everybody's news feed is customized. And then the second thing is the pixel itself so it knows in app activity and it knows off app activity. So my wife and I are kind of doing our winter prep with our golfing and getting ready for the spring and trying to take a trip down to Florida here soon. We're looking at golf stuff. Well guess what our Facebook feed is filled with, right? It's golf stuff, right?

Brett Curry:

Yeah.

Bob Regnerus:

So Facebook is just really good. And, again, I think as a user I'm okay with that because I'm not -

Brett Curry:

Better than and ads, right?

Bob Regnerus:

Right. I'm not seeing ads for lacrosse gear, which is good, right? Because I don't have a daughter that plays lacrosse so that would be irrelevant to me, right? But I do golf. And so I do appreciate some of the things I get in my newsfeed related to that because I'm a consumer, right? And so that's a big benefit, that's a huge benefit to the marketer. And Facebook is right in that way, the way they're arguing is, "We're going to lose a little bit of that." They're going to lose the ability to do that scary targeting that we all talk about but I agree with them on the point of it's a benefit to the users when this marketer can super target an ad. Unfortunately there's a lot of bad apples, Brett, that don't listen to us that just do things really crappy-

Brett Curry:

Always the bad apples, they're ruining it for the rest of us.

Bob Regnerus:

Yeah, they're the ones that pee in the pool.

Brett Curry:

Exactly. So let's do this, let's talk a little bit about some audience strategies just anything new or any considerations here related to strategic audience targeting and then I want to move in to kind of some ad creatives and then we'll talk testimonials as well. But let's talk audiences, anything new or any tips, suggestions, ideas you would give to people for audience targeting right now.

Bob Regnerus:

Yeah, I mean this has really shifted and it's really become simple and our opinion is that as long as we're creating good models, meaning we're modeling our customers or our best customers, look alike audiences is absolutely where you should be running your prospecting ads against. I know there's still people that want to build really careful detailed interest target audiences but I've found it to be way more effort than it's worth. Facebook themselves, I've talked with Facebook engineers, people that actually work on the algorithm like, "Bob, we could target much better than you so focus on the ad creative because that's way more important. As long as we have the right campaign objective and we're using some of the AI, we're going to get most of our results of how good our ad is and how good our offer is."

Bob Regnerus:

So we, as marketers, we should be spending 80% of our time working on our offers, working on our creative. That's where the real wins are. So from that perspective, using a good look alike as long as you have a good model. I've come across a few accounts lately that I've done audits on where they've got really, really old look alikes meaning they created a model... I just looked at this one the other day. They had a model from 2018 and they were still using that look alike in a prospecting ad. I like to keep those things as fresh as possible. So create a new model, your customers change, they're demographics change, upload fresh customer lists at least once a quarter, maybe twice a year. And create new look alikes off of that.

Bob Regnerus:

And it's really interesting to see how different those are when you start to do some comparisons inside of the audience tools. So that would be my best recommendation is keep a good fresh model so that you have that recency built into your model so you get a much better look alike when you do prospecting.

Brett Curry:

Love that. I think that's super, super smart. And I love what you said because this is the same on YouTube. I know I've been making the comparisons of YouTube and Facebook a lot but I think it's really relevant like the two play well together, they complement each other.

Bob Regnerus:

Very much, yes.

Brett Curry:

And there's some similarities there. So one of the things we talk about a lot and this is info directly from Google but we've seen it pan out where 50 to 80% of your success on YouTube is the creative, right? It's the actual ad you're running because it's amazing where if you're talking to the right person but saying the wrong thing, you're going to get nowhere. Obviously if you're selling retirement homes to teenagers, that's not going to work either. So audience plays a part in it but a lot of your success is going to come from the creatives themselves.

Bob Regnerus:

That's right.

Brett Curry:

So let's dive into that a little bit. What are you focusing on or are you doing more video ads, I know video is a specialty of yours, want to get into some specifics there in a minute. But are you running more video than image ads, does it depend on the client? What does that mix kind of look like right now?

Bob Regnerus:

Yeah, there isn't a client that I work with that we're not pushing video in the newsfeed. There's the technical advantage to this because, again, related to tracking, if we lose 100% accuracy in terms of people landing on a website, we're not going to lose that within the Facebook platforms. So a video custom audience. Here's what I've found, Brett, and I could throw numbers out there but essentially we're finding that, let's just say for an average of a one minute video, somebody that watched 75% or more of a video, I have found has proven more valuable than a landing page visitor. So that means this, we don't necessarily know how long somebody spends on a site unless we set up our tag manager for scrolled up or things like that, right? Which you should be doing.

Bob Regnerus:

But I know this, a landing page visit is kind of... it's a little esoteric but somebody that watches 45 seconds of a one minute video, I know they spend 45 seconds with me. That is an eternity in internet time, right?

Brett Curry:

It really is.

Bob Regnerus:

Right? And so if you are nailing our video creative, you nailed it there which is if you've got a good message to market match, if the video's compelling, if you hook them, if you talk about the problem, if you agitate the problem, you develop a solution to offer them and have a good clear call to action, a 45 second or more video viewer converts on the back end significantly more than somebody who just lands on your website. So we are pushing video as much as possible.

Bob Regnerus:

Facebook has been pushing for years for shorter and shorter video and we started to buy into that but we've actually gone the opposite way. We're using longer and longer video. Kind of our standard video length, at least for call audience, is about a minute and we'll go 30 seconds shy or 30 seconds over that. But we have found that a good one minute video in the Facebook newsfeed that is structured properly carries a lot of weight and does more than what we could do necessarily on the landing page. So that's kind of what we're pushing in terms of our clients on the cold traffic side.

Bob Regnerus:

On the warm traffic side, we're running some videos sometimes at two minutes, five minutes, we've run 15 minute videos kind of middle of funnel. If you have a complicated or expensive or engaging type of product or service and people are in the market for it, they're going to watch that content. Maybe they don't watch it all the way through but they're absorbing a lot of that. So I have found video to be... I mean, geez, it's been since 2016 that we really shifted so much to video. But video is so much easier for people to consume on their mobile phones and 90 plus percent more traffic is mobile related. So videos and just I'll say this, people don't like to read but they do like their captions on because most people watch videos with the sound off.

Bob Regnerus:

So make sure you use captions on your videos but it's just consume more, you get better engagement and you get better pricing. I don't want to say you get a discount but because it's cheaper than some of the other advertising you do, I see it as a discount.

Brett Curry:

Yeah. And the way Facebook looks at it is, "Hey, people are more likely to engage with a video ad because consumers do like it and so you get rewarded a little bit by the lower ad cost of that." Which makes sense. And all of those really valid points. I wanted to key in on something really quickly and then we'll talk testimonials. I love that you guys are going longer with the videos, that's awesome. Google as well, YouTube, they're making a push for shorter videos. We're not really seeing that work at all on our end like anything less than 30 seconds we're not finding success with on YouTube.

Brett Curry:

I talked to a lot of other big YouTube advertisers and they're all kind of in the same boat, kind of that minute and a half to two and a half minutes is... I mean, even longer on YouTube than on Facebook in some regards. But yeah, that's really interesting. And I think it just goes to show you should listen to your Facebook reps, you should listen to what conventional wisdom is but you should test because sometimes what they say is totally self serving and sometimes the reps don't even know it, right? They're just saying what they've been told to say.

Bob Regnerus:

They don't know, yeah. They're there to meet objectives. They have to have a certain number of phone calls, in person appointments, and then there's an agenda they push. But what I really like what you said, Brett, I think Facebook and YouTube in terms of video, really complement each other. And if you're having success on Facebook using video, I think it's a fairly easy jump to YouTube. And I think vice versa what you've found working on YouTube, you can shift to Facebook and make it work fairly well. A little bit different-

Brett Curry:

Absolutely.

Bob Regnerus:

Right? A little bit different in terms of the technical part of it but the creative, the important part, ports real well between the two platforms.

Brett Curry:

It does port well. Sometimes you have to make a few tweaks to the opening of a video and if you're going from Facebook to YouTube you can't rely on any of that copy block above the video like you have on Facebook and it's not there on YouTube but yeah, it's similar ability to target people, creatives work pretty closely all though they are somewhat different. But yeah, you're 100% right. If you're finding success with Facebook video, YouTube should be something you're considering. If you're really crushing it on YouTube, you should be running video ads on Facebook without a doubt. And so yeah, I think that's really important. Let's talk kind of quickly and then we're sort of up against... got time for a few more things to discuss here.

Bob Regnerus:

Yeah.

Brett Curry:

Let's talk about testimonials. First of all, kind of share what you guys do at Feedstories. I think it's really unique and really interesting. Talk about what you do and then we'll talk about kind of the how and why's of testimonial videos.

Bob Regnerus:

Yeah. Feedstories was born out of a meeting I had at Facebook in 2016. I was down in Austin and there was about 100 advertisers in the room, it was kind of a pre-holiday thing and they were pushing some strategies and things like that. But man, for two days straight all they kept talking about was video so it was funny. I was a Facebook ad agency at that point, more of a solo guy, I should say. I had a couple people helping me. But so I went downstairs, I went outside, I called my current business partner, Brandon Boyd, who's a creative and copywriter, he's a graphic and copywriter guy, who had been working in video.

Bob Regnerus:

I'm like, "Hey, Brandon, dude, all they keep talking about is video. And there's all this proof and everything was like Facebook and Instagram just pushing towards video." I said, "We really got to focus in on that." So that's kind of where Feedstories was born, a conversation in late 2016 on the streets of Austin. And what we do is we work with companies, individuals, doing video and it's built for the newsfeed, built for YouTube, built for Facebook, Instagram, LinkedIn. And the type of video that we do is very much like you and I are doing, having conversation. We do interview style or face to camera.

Bob Regnerus:

We do some things like some animations, some graphic stuff, but we really try to build a story behind an individual or a brand and with the eye of a copywriter, right? The eye of us helping the person sell. So video, obviously you dabble in video, Brett. There's video that looks good and might win some awards. But then there's video that actually sells. So we feel we have this superpower here at Feedstories to pull a story out of somebody's head and organize it into a really coherent sales process. So it's not just a single video of course. It's a video over time and we call it deep funnel marketing and I outline it all in the book that you mentioned. But we're really dealing with creating content for top of funnel to get people's attention, content in the middle of the funnel to nurture them and content at the bottom of the funnel to close them.

Bob Regnerus:

And you said a phrase that's almost identical, Brett. In all my training, I talk about the right content to the right audience at the right time. And that's kind of what we're all about and we love video because it's engaging. Look, obviously during 2020, we've lost that personal connection and I think people really need that. So-

Brett Curry:

They do, without a doubt.

Bob Regnerus:

I just feel and Brandon and I feel like why not try to develop as much magnetic connection with your market as possible so we really love getting people within a business, the founder, the owner, on camera and find out why they do what they do and connect with people on a story level. And then what really came out of that, Brett, you mentioned testimonials, we have a service called testimonials.live. My favorite thing to put in the middle of funnel is, if you do anything, do testimonials. It's just the most powerful thing that you could have in marketing.

Bob Regnerus:

You and I can sit here all day and talk about ourselves and try to sell our agency and our coaching services all day long, our seller eCommerce products, whatever it is, but when somebody who has actually paid us money has made the step to get on camera and to talk about the transformation they've had through doing business with you, it's the most powerful marketing tool in the world. So we love getting a client's customers on camera and walking them through a simple process to help them tell a really great story about your company. And it's absolutely magnetic type of content that closes business for you.

Brett Curry:

Yeah. I just love it and I think testimonials can be used in a lot of different ways, I think they can be sprinkled in to your cold traffic or top of funnel videos because testimonials make all of your claims easier to believe when you could use a testimonial to overcome an objection, that's powerful. You use testimonials for proof, that's all really powerful. We even run some top of funnel videos that are just a mashup of testimonials. I think though you're 100% right, that often works really well mid funnel because lots of times mid funnel, you know you've got someone's interest. You know they're at least somewhat interested and aware of the product but they need more. They need more education, more convincing, just a little more proof right, to get them over the edge. And what's so great about the way you guys approach testimonials and this is the way I've always done it, get some TV background, this is the way I've always wanted to approach it is you interview, right?

Bob Regnerus:

Yep.

Brett Curry:

You're not handing someone a script, you're not saying, "Hey, could you save these specific things." You're just interviewing and letting them speak in their own words because you need that authentic testimonial to come through. It's so much more powerful when someone says something in their own words and it's from the heart. You can feel that.

Bob Regnerus:

Yeah. And that may be a big difference between us and other video companies. We have never used a script. We've used a script twice and it was for animated video because we had a spokesperson read it. I think like you and I are having this... we kind of planned a little bit what we're going to talk about but we really didn't know the way the conversation was going to flow.

Brett Curry:

Exactly, exactly. Yeah.

Bob Regnerus:

So that's the way we approach a video session. It takes a lot of pressure off somebody to say, "Look. I'm going to be the interviewer. I'm going to take a lot of pressure off of you. I'm going to give you the high level points we're going to cover. But all you have to do is talk about what you already know." And people are just way more comfortable on camera because they don't have to worry about, "Did I say it right?" When you ask somebody to memorize something, their energy goes down, they become closed off. That doesn't play well on camera. What you really want, when you watch a news show, when you watch somebody being interviewed, they're talking about what they know, if you have a really gifted director or interviewer who can pull that out of you, it makes for really compelling video. And so whether it's you on camera or it's your customers on camera, having somebody just ask some questions and have a conversation makes really, really compelling video content.

Brett Curry:

Yeah. And don't hand a script to someone unless they're an actor, right? If they're a professional actor, great. If not, just have a conversation.

Bob Regnerus:

Oh yeah. I mean, they have years of training on how to make that look natural. But we're not trying to put on a production here, we're trying to tell a story and for the lay people, absolutely, a script is just, absolutely, it's so restrictive. It's never worth it.

Brett Curry:

Yep, yep. Awesome. So let's talk a little bit more about the book. First of all, for anybody listening, you can tell Bob knows his stuff. Obviously Perry never would have partnered with him if he didn't but you got a glimpse of it, a taste of it here. It's awesome stuff. I love how you talk about the deep funnel strategy and getting the right video for top funnel, mid funnel, bottom of funnel. Where can people find the book? I'm sure in the obvious places but where can they find it, anything else you want to mention about the book? And then I'm just curious, is there an Audible version of the book yet. I enjoy listening but no problem if not.

Bob Regnerus:

Yeah, no, there's been no talk about an Audible version because there's so many visual elements within the book.

Brett Curry:

Yeah -

Bob Regnerus:

Lot of screenshots. So the book itself, the way I approach the book is there's got to be kind of the technical, hands on manual type stuff. Go here, do this, this is what it looks like. So that's obviously a part of the book. But I did fill the book with a lot of timeless strategy stuff so you can I reference older people that have come before us that wrote books like John Caples. I talk about Eugene Schwartz quite a bit in the book.

Brett Curry:

That dude's a legend.

Bob Regnerus:

Breakthrough Advertising, 1966. Like what? You're talking about that in a Facebook book. But-

Brett Curry:

It's still so relevant.

Bob Regnerus:

Yeah. I'm a basketball coach so-

Brett Curry:

Nice, me too.

Bob Regnerus:

Yeah, I mean, I've been coaching basketball since I was 16 years old. So I'm going on year 35 here soon of basketball. But I approach it from a fundamental standpoint because that's how I help my players and my teams win, right? Is focus in on the fundamentals. So I take the same approach to my coaching clients and consulting cases. If I get you to apply the right fundamentals, the thing that works today and goes away tomorrow is really not useful to you. But if you learn this fundamental, you're going to be able to adapt and apply it over years. So my idea is, yeah, obviously the book needed a rewrite, it was three years old, a lot of the technical stuff was completely out of date. So my goal in writing this version was, yeah, there's going to be a little bit that's going to be out of date but the fundamentals that are in here, the direct marketing principles.

Bob Regnerus:

I've had a lot of people read it, Brett, that are just getting started and they're getting a good marketing education and that kind of touches me in a really deep way because I'm helping somebody learn what you and I kind of breathe every day. So the book is filled with it. Yeah, obviously it's available at major retailers. I have a resource site, ultimatefb.com. I've got interviews with some of the people that helped me with it, Ryan Deiss wrote a chapter, Jeff Walker wrote a chapter, Ryan Curse wrote a chapter. So I interviewed them and I got a number of other people that I talked with.

Bob Regnerus:

So I've got those interviews there as a bonus. I'd love for you to go over there and opt in and learn a few things from some people that I really admire at ultimatefb.com. And if you're interested in video and testimonials, feedstories.com would be another good way to get ahold of me.

Brett Curry:

Awesome. That's fantastic. Bob, it's been amazing. I'm going to check out those interviews at ultimatefb.com. I have not seen those yet so I definitely want to do that.

Bob Regnerus:

Cool.

Brett Curry:

If you don't already have it, get the Ultimate Guide to Facebook Advertising, highly, highly recommend it. With that, Bob, man, thank you so much for the time. It's been a ton of fun. We could have talked like another two hours I still would have enjoyed it.

Bob Regnerus:

We could have. Yeah.

Brett Curry:

Yeah. Really appreciate it and we'll have to do it again sometime.

Bob Regnerus:

Oh it was an honor, Brett. Always good talking with you, man.

Brett Curry:

Fantastic. Thanks, Bob. And as always, thank you for tuning in. We'd love to hear more from you. What would you like to hear more of, what topics would you like us to dive into? And if you have not done it already we would love to get that review on iTunes, it makes our day and helps other people find the show. And so with that, until next time. Thank you for listening.

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Episode 149

:

Andrew Youderian - Ecommerce Fuel

2021 Predictions Show

Andrew Youderian is a bit of a legend - that’s why I’m pumped to have him on the show this week to talk predictions for the rest of 2021.

Andrew Youderian is a bit of a legend. Podcaster, investor, former eCommerce store operator, and now founder of the premier online community for 7 and 8 figure eCommerce store owners - Ecommerce Fuel. That’s why I’m super pumped to have him on the show this week to talk predictions for the rest of 2021!

In this episode, we put on our Nostradamus hats and try to predict what we might see more of this year. I focus a little more on the ad and marketing space as it relates to eCommerce. Andrew focuses his predictions more on eCommerce as a whole, plus a few macroeconomic predictions.

Hopefully, you find this fun and entertaining, and helpful. Even if we end up being dead wrong about our predictions, I think you’ll find some interesting nuggets here.

‍

Mentioned in this interview:

HEY eMail

Basecamp

“Tested Advertising Methods” by John Caples

2PM

Bill D’Alessandro

eCommerceFuel with Bill D’Alessandro - 2021 Predictions

SEMRush

Klaviyo

Blue Ribbon Mastermind

‍

Andrew Youderian - Founder at eCommerceFuel.

eCommerceFuel - Content, Community & Capital for Store Owners

The eCommerceFuel Podcast

‍

Episode Transcript:

Brett:

Hello, and welcome to another addition to the eCommerce Evolution Podcast. I'm your host, Brett Curry, CEO of OMG Commerce, and today we have a legend, a true bonafide legend on the podcast.

Brett:

Needs no introduction, but I'll give one anyway, just because it's what I'm supposed to do. But today I'm delighted to welcome my friend, fellow podcast host, the founder of eCommerceFuel, Mr. Andrew Youderian. What's up, Andrew? How are you doing? And welcome to the show, man. Thanks for coming on.

Andrew:

Thanks for having me. Like I was telling you before we got on, I was doing a lot better until I saw the contrast in our office, quality of recording studios here. Just like a dead squirrel in the corner of mine and you're like here at the Ritz. It's amazing.

Brett:

Dude, I love the art. Kid art is the best. You got to hang onto it. It is really, I think, inspiring. Although, and hopefully you're probably a better dad than me, so you haven't done this, but you can also never get caught throwing away your kids' art. I have done that before. Like crafts kids create at church. We used to have a bucket of it. I'm like, "Yeah, this can probably be thrown away," and the kid catches you throwing away the art and it's like you're suddenly a monster.

Andrew:

Oh, you cannot. If you keep everything your kids produce, especially when you have as many as you do, Brett, you'll quickly have to buy a semi truck to store it. So what I do is, there's three things that happen to art. There's the stuff that just gets scribbled on and then you take that, the non-Picassos, you put those at least four or five sheets down the recycling bin to reduce the chances of getting caught. The second thing you do, if it's pretty good, if it's on the like, "This is pretty good, but I don't know if I want to keep this for the rest of my life," but you want to eliminate the guilt and anxiety, you take a picture of it in Evernote so you have a picture of it.

Brett:

I've not used that strategy. That is brilliant.

Andrew:

Then the third one is, for the really good ones, you put those in a shoebox and you keep those. But that's ..

Brett:

Shoebox. But you could also do the temporary refrigerator, it takes a little stint on the refrigerator. Then it can go into a more permanent home, like the trashcan. But I love the digital version. I think if your kid sees you taking a picture of it, that earns you some points as well.

Andrew:

Then you get to keep it. 97% of hoarders started their problem and really just snowballed out of control with kid art. It's a fact. That's just true.

Brett:

It's a fact. Totally a fact. You heard it here first, 97%. So that's awesome. But thank you for the kudos on the space. Shout out to Trenton Bodenbach on our team and Melissa, our office manager. So I came to them, and we had this podcast room. It used to just have sound panels, very boring. I said, "Hey, what if we do something kind of cool?" So Trenton's one of our Amazon specialists. He's wicked smart with Amazon. But he also builds stuff. So he built these walls, then we had a sign company do the OMG logo, and we had a lot of fun with it. So it's like a real talk show or something. I don't know.

Andrew:

It's super cool. Well done.

Brett:

Thank you. So excited to have you on the show. If you don't listen to other podcasts, if you're not listening to Youderian over at the eCommerceFuel Podcast, you need to do it. I did hear, we were interviewing a new potential hire a couple days ago, and he did come on and say, "There are two podcasts I listen to, eCommerce Evolution, this podcast, eCommerceFuel." So I was like, "Hey, I can be mentioned in the same sentence as Andrew Youderian. I'm feeling pretty good."

Andrew:

That's awesome. Did you hire him?

Brett:

I think we're going to extend an offer. It doesn't matter how the rest of the interview went, like, "You're on, buddy. You knew the secret to getting hired." So anyway. No, it actually went really well. Awesome. So what we're going to do today, this is going to be interesting, we're going to do a prediction show. Now, I was confessing to you, Andrew, I'm not the best at predictions. I think, like most successful entrepreneurs, I've got good instincts, right? I definitely several years ago predicted, so to speak, that, "Hey, Google Shopping is likely going to be really big." This was when it was not big. So we put a lot of resources and time and kind of obsessed about it and became experts at it.

Brett:

Then three or four years ago obviously YouTube was big for organic and a variety of things, but I saw a change there and I thought, "Hey, this is going to work for direct response eCommerce, right?" And that was correct. But if you just want to pull global predictions out, I'm not sure I'm the best. So I'm really glad you're here. You're potentially better at it than me. But regardless, we've got some fun topics and some interesting things we'll talk about. Even if we're wildly off in our predictions we'll still have I think some interesting points to dive into here. So yeah, man, let's dive in. You're the guest, so I want you to go first. And you've also come up with some categories for your predictions. You want to kind of walk us through that real quick?

Andrew:

Sure. I just have four. So a couple in the eCommerce realm, digital marketing realm, and then a couple kind of more macro society after a crazy year predictions. So two of each is what I came with.

Brett:

Nice. All right, man. So two eCommerce, two kind of global macros. So let's dive in. What do you want to lead with?

Andrew:

So I think my first prediction is, are you familiar with the email platform HEY that got launched this last year?

Brett:

I am familiar with it because you use it, but I don't know much beyond that.

Andrew:

So it's a new email platform that I think Basecamp came out with, and trying to reimagine email. Some things they do really well, some things they need some work on, but the thing that I am keeping the email app for is this ability to screen your inbox. I don't know about you, Brett, but when I was on Gmail, Gmail's great, it's super powerful, but to be able to have any kind of inbox that doesn't get overwhelmed to just the nth degree if you've been online for more than three years ... Like the rules in Gmail, I probably have, when I was using it as my primary inbox, I had 150 or 200 rules on what to archive, what not to.

Brett:

Wow.

Andrew:

It was crazy, and even still I was getting a ton of email. The thing I love about the HEY platform is it lets you, anytime you get an email from someone you haven't received before you just get a thumbs up or a thumbs down. I want to screen them in and screen them out, right? People do this with their calls already. I don't know about you, and maybe I'm just admitting I'm a terrible person here, but unless I know who's calling, because I get so much just spam, I don't answer the phone.

Brett:

I never answer my phone-

Andrew:

Ever.

Brett:

... unless it's really someone I know well.

Andrew:

Exactly. I think email is such a powerful metric, or it's such a powerful channel, but it's getting so hard and so crowded. Anyway. Where I'm going with all this is I think that in this next year we're probably going to see Gmail introduce an email screening feature that makes it much easier to be able to rein in your inbox, but also makes it harder for people to be able to get in front of their customers, particularly if you don't already have an existing relationship or you don't have content that person really is seeking out. So that's my first prediction.

Brett:

Interesting. So one, I'll have to check out HEY a little closer. We used to use Basecamp back in the day. Awesome tool. Is it 37signals? Is that the name of the company, or did they rebrand? I can't remember.

Andrew:

I think they rebranded everything to Basecamp.

Brett:

Basecamp?

Andrew:

But yeah, I think it's the same company.

Brett:

So I'll have to check that out. Love the concept, and it does make sense, right? Gmail's always looking to innovate and shift gears and improve. So I like that prediction. We shall see. It could be profitable or useful for users, maybe not so much for email marketers. Awesome. My first prediction, we're seeing this trend, and there're some fears, some anxieties, some trepidations, some animosity maybe, about privacy issues, right? So a few of mine are going to take more of an ad perspective, because that's what I do, I'm more of an ad guy, right? Love eCommerce in general, but focus on ads. So we're seeing these trends in privacy, and specifically iOS 14 and the ability for users to opt-out, opt-in to varying levels of tracking. I think from a consumer standpoint and from just a personal liberties standpoint, moving away from some tracking is probably good, right?

Brett:

As a marketer though, I really like the idea of being able to hyper-target and hyper-focus, and there is something to be said about seeing ads that are relevant for you rather than ads that are not relevant for you. But here is a prediction that I have, is that we're going to see a renaissance of sorts in terms of the way people approach ad campaigns, right? So we look at the core of marketing. The core of marketing being the right message to the right audience at the right time. That is going to be the focus, and there's going to be less dependence on algorithms and smart bidding and things like that. Not going to go away, still going to be a big part of what we do, but there's going to be potentially a renaissance in, "Hey, we have to be creative in the way we track and we have to think like maybe even old school marketers and not just be too dependent on the machine to do the thinking for us."

Brett:

And reference on another interview I did not too long ago about a guy named John Caples and a book called Tested Advertising Methods, and how they used to collect coupons and they would have different ad variations and each new variation you would reply to a different physical mailing address, right? So if I responded to this ad I would mail my coupon to this address, or if I responded to this other ad I would send my coupon to another address. So I wasn't thinking I'd have to go back to coupons and stuff like that, but there's going to be a renaissance of sorts in thinking through how we track ads and how we build audiences and things like that. So I think it'll be interesting to watch. We'll see. We'll see if iOS 14 is a true killer or if it just is a small hurdle to overcome.

Andrew:

I'm sure you know more about this than I do. With iOS 14, are they removing any kind of Facebook Pixel or tracking ability from that on Facebook just alone, or what's the extent to which they're pretty much dropping the atom bomb on being able to track what people are doing on Facebook?

Brett:

Great question. So some of it is still a little bit unclear. Most first party data is going to be protected. So from what we've heard, Google Analytics, you'll still have all of that data, all of those views will be there. That will be unchanged. What someone does in the Facebook platform, as you're clicking around, liking and watching videos and stuff like that, Facebook's going to still see that. That's in their platform. That won't change at all. What seems to be going to be impacted the most is things like the Facebook Audience Network where Facebook's using their Pixel and they know you're logged into Facebook here and now you're cruising the web and shopping and doing other things, some of that data is going to be at risk. To what level? I'm not the biggest expert on that. So I don't want to speak out of turn too much. But the Facebook Audience Network seems to be a bit of a danger zone. Then potentially the ability for that Pixel to track behavior on a website will also likely be at least limited in some capacity.

Andrew:

Interesting. There's still going to be a decent amount of data.

Brett:

For sure.

Andrew:

Obviously you're losing some valuable stuff, but it's not like you're going back to the days of 1999 when you were just bidding at gunk. You still have something to work with.

Brett:

You still have something to work with, but my thought is, it's going to hopefully cause people to think through the message a little more. It'd be a little tighter and less dependent on the machine and more thinking independently, so to speak. Awesome. All right. Prediction number two. What you got, Andrew?

Andrew:

Prediction number two is, and this one, some people may not think this is super controversial, but I've heard opinions on both sides, we had COVID come, there was two weeks of panic, nobody knew what was going to happen, and then it emerged slowly over the course of two or three months that, "Wow, this probably is going to be a really good thing for eCommerce," given everyone's shopping from home and not going out. Some people think the eCommerce bump is going to drop once the world goes back to normal. Other people think it's going to stick around in a more significant way. I think probably at least 90% of the eCommerce adoption that we've seen, and I've seen different stats on this all over the board, 2PM reported that eCommerce went from like 16% to 27% pretty much overnight, in eight weeks more or less.

Brett:

I saw some reports that were as high as like 35% there for a little bit in March and April. So it depends on how you slice the data I think.

Andrew:

I don't think we're going to see a meaningful drop in that. It's so funny, I work at this office, you can see, there's construction going on right outside, and there's two ways to get into my office with the construction. One of the ways is this super roundabout way that I go, that I was forced to go for weeks because of the construction. The construction has been done for the most part for probably a week and a half now, and there's a much shorter way to be able to get home that goes right to the road where I need to go. But in my lizard brain I leave and two out of three days this week I have noticed I still go the super long out-of-the-way way, and even when I remember it. So point being, so much of what we do is behavioral and is formed by habit.

Brett:

I love that analogy, Andrew. Imagine if that was flipped though. Imagine if you were conditioned to go the long way, that's the way you had always gone. Then that was closed off for a while and the short way was the one that was opened up. Then you're like, "Oh, I've never done this and it seems faster, it's better." Then when the old way opened up you'd be like, "Dude, I don't need that."

Andrew:

Yeah, good point. That's a great point. Anyway. I think 99.5% of the gains we've seen in the eCommerce world are not going away. Maybe if you sell rice and beans or prepper kits you might see a little bit more of a hit, but everyone else, it's going to be a very sticky adoption curve on the backend of this pandemic.

Brett:

I totally agree. I think we are creatures of habit. Once we try something new, it's always that first time that's the most difficult. After that, if there was a decent experience, it's going to become easier and stickier as well. So my next prediction certainly is somewhat similar. I heard you and Bill D'Alessandro talking, and I do recommend, if you haven't heard it, go listen to the prediction episode with Bill and Andrew on eCommerceFuel, it's awesome. Bill is a super smart guy, and of course Andrew brings the goods every time. So one of the things that Bill talked about was how Amazon is just a huge benefactor of the pandemic, and it's true. I know paying attention to my in-laws who are in their 60s, their Amazon purchases have gone up. Amazon is a big, big winner in the course of the pandemic.

Brett:

But there was definitely a period in time, and in some ways there may be a little bit of a hangover from this, where it was hard to get some things on Amazon, right? Either they were out of stock, or Amazon wasn't delivering, or they weren't delivering on time. One thing that's interesting, we run a lot of search campaigns and Google Shopping campaigns and things like that, we were on search on Google and on Amazon, but one thing we noticed when Amazon slowed down the delivery of non-essential goods, we found for a lot of clients who are on both their own dotcom and on Amazon, the search behavior that we saw on Google was like their brand name plus two-day shipping went through the roof. So now someone, they're maybe used to buying the brand on Amazon, they go there, they see it won't ship for a while, now they're going to Google, typing in that brand and two-day shipping, right?

Brett:

So we actually had some people where maybe they were 80%, 90% Amazon, they started to get a little more adoption on their dotcom during that time period. So that's kind of the setup here. So I think there was a lot of people for the very first time bought from a Shopify store, and maybe they saw how well they shop app worked, or that they bought maybe three or four Shopify sites and they thought, "This isn't that bad. Maybe Amazon is a little less scary, but this isn't bad either." So here's what I think is going to happen. I think you're going to see more marketplaces, and specifically curated marketplaces like homedepot.com and others really take off. Not to rival Amazon or anything like that, but they're going to really succeed I think and grow.

Brett:

Part of my theme behind this, I was looking at SEMrush earlier today, just looking at it. We all know that Lowe's and Home Depot exploded because they stayed open during the pandemic and everybody's remodeling their house instead of going on vacation and stuff like that. But the traffic to homedepot.com doubled this year over last year, according to SEMrush, which is cool. Then they kind of played this interesting role where they have a marketplace, but it's a little more curated. It's a little harder to get onto the Home Depot marketplace. Full confession, I have not shopped it. I've got a really big good client that is there and they're singing it's praises. But I think we'll see some other sites like that. I think people will also branch out from Amazon as well. Amazon's not slowing down, but I think some of these other marketplaces will really take off as well.

Andrew:

Makes total sense. Lovely.

Brett:

All right. So prediction number three for you, Mr. Youderian.

Andrew:

So I'll transition a little bit into more macro-type predictions. My third prediction is I think we're going to see asset bubbles continue to inflate in 2021 and beyond, and there's a lot of talk out there, especially with a lot of the stimulus and the deficit stuff, like is inflation actually coming? Is it actually finally here, or is it going to be here very soon?

Brett:

Just to preface this, for those who don't know, before you were running eCommerce stores, running eCommerceFuel, you were a finance guy, right?

Andrew:

I was, which gives me no real credence on making good predictions, because there're all sorts of finance people who probably get it wrong 75% of the time. But yeah, a little bit of a finance background. But if you look at the environment now we have unprecedented low rates in terms of borrowing rates. There's so much existing money out there. I was reading something on Twitter again. I haven't verified this or independently checked it, but they said that the amount of cash in American bank accounts has more than doubled in the last 12 months. Just sitting there.

Brett:

Whoa.

Andrew:

Which you think about once everyone feels totally safe to go out on vacation and go on cruises. Well, cruises might be a while. But whatever it is.

Brett:

Cruises, that may be a stretch. But vacations, I think fairly quick.

Andrew:

Vacations, spending, trips, restaurants, all this stuff, and the general public has twice as much cash, a lot of people are going to go out and spend that money. If you look at eCommerce multiples, it's very frothy right now. Those multiples have been going up. It used to be maybe two and 2.5 to below threes for an eCommerce business. Now they're maybe three to three and a half to even four for some really compelling businesses. I just think we are going to see a lot of inflation on most major asset classes. Housing. I talk to very few people that say, "Oh, housing in my city is really mellow." It seems like almost all housing markets, that's not true, but so many of them are just on fire.

Brett:

We'll edit it out.

Andrew:

And either inflation's going up and more money is chasing those houses, or we have an insane amount of immigration coming in, which I don't think it's the latter. Anyway. I think on stocks, Bitcoin, SMP, housing, I think we're going to see the price of businesses to buy, I think all of that's going to continue to go up significantly and we're going to see asset bubbles, asset prices continue to climb noticeably in the next year.

Brett:

And you just mentioned bubble and asset bubble. Do you think then some of those are in danger of popping? Any other thoughts there? I know that maybe you're really stretching the limits of predictions here, but any thoughts on what that does longterm?

Andrew:

I don't, no. I think at some point you pay the price. I don't know. It could end up where asset bubbles pop. It could end up where just the deficit and by the U.S. government and all this stuff gets deflated away and savers get ... It's a rough time to be a saver. If you're trying to live on a pension, not a pension, but if you're trying to live off your bonds or you're a retiree, it would be a really hard time to be a retiree right now. I don't think we as a country have, and this is a apolitical statement, but I just don't think large groups of people historically have been very good at enduring short-term pain for longterm progress, right? Just not a great track record of that. Anyway.

Brett:

That's great.

Andrew:

There's a lot of ways it could play out, and I have no idea how it is, but I think at least in the interim we're going to see asset bubbles keep going up.

Brett:

All right. I like it. Very good. So my prediction number three, this is also not really going out on a limb, but eCommerce will continue to grow. No, I'm just kidding. A little too obvious. I am an ad guy, but primarily Google, YouTube, Amazon, I think, and you mentioned something about email marketing which is interesting, so that's why I get that there could be some headwinds, some speed bumps, some issues here, but I think we're going to see even more value placed on email lists. The ability to build lists and segment lists and use lists, even thought that's not new to eCommerce at all. You talk about Klaviyo.

Brett:

I actually remember it wasn't that long ago when people were first talking about Klaviyo, and all the ways you can segment stuff, but email marketing is not new. The death of email marketing has been predicted on more than one occasion. But I believe because there are the privacy concerns, and iOS 14 is kind of at the forefront, and because most people think that's probably going to continue, email marketing, owning those lists and building those lists, and then to your point, managing those lists properly so you do get a thumbs up if someone's using HEY or whatever the version of Gmail is, but email lists are going to continue to grow in importance, and that's going to be a renewed focus I think for smart eCommerce companies moving forward.

Andrew:

Interesting. Well, one thing that just pops into my brain, slightly related to both of our predictions on email, I wonder if we'll see any kind of bump up. Email newsletters have gotten bigger, but I noticed the ones that ... I don't have a lot of time to read email newsletters, partially because I don't have a lot of time, I have a lot of stuff to get through, partially because email newsletters are so long, and we just did a big conversion kind of process on our site, and the biggest thing by far that we found with testing was that we had way too much text on our website.

Andrew:

So I wonder if newsletters are going to start adopting a much more punchier shorter like, "Hey, here's the five things, five stints. This is the five most important things you need to know this week. If you really want to geek out about them, go here," but you can scan the email in 20 seconds as opposed to having to dedicate three or four minutes. Because I don't know about you, Brett, but the number of emails I read that take me three or four minutes to read as I'm trying to clean out my mountain of inbox email is either from my mom, good business partners, good friends. If somebody randomly emails that, there's no way I'm getting through that.

Brett:

You're going to be apologizing to your mom. Yeah, the TLDR thing is totally relevant with email especially. There are a few email newsletters that I read pretty regularly. I do enjoy the Morning Brew as an example. I think that's a great newsletter, very curated. It's fun. It's kind of short and punchy. It's organized well. But there are even some other email newsletters that I subscribe that I like that I still don't get to, because I'm running a company and I've got a ton of kids and all these things going on. So I think you're right. The other thing I think, and actually I just interviewed a guy, eCommerce merchant, and they really connect with their customers. So he was talking about they send emails after each order, kind of a higher EOV business, but he has a VA record a personalized video and send it to each customer.

Brett:

Now, it's designed like most of the video's scripted, there's a few parts that are customized, and it's mainly designed to getting someone back into like a Facebook group and continue the relationship, but it's like, "Hey, it's an email," but then it's connecting on a really human level. It's a quick video too. But it's got the person's name in it, references what they bought. It's very much personal. So I think we're going to probably see trends like that, using email to do something very personal and very creative, something that really kind of builds that relationship. But it is an interesting thing. Inboxes are pretty full and we are, to your point, getting more control over what we do with the inbox, but man, it's still an important place, for sure.

Andrew:

I just realized, this could be the set for like Brett Curry, Between Two Ferns with Brett Curry. It just hit me, the whole-

Brett:

Two ferns. These are like between two medium-sized green plants.

Andrew:

You've seen that show, right?

Brett:

Zach Galifianakis, isn't it?

Andrew:

Yeah.

Brett:

He's so funny.

Andrew:

It's pretty good.

Brett:

I love that guy. Between Two Ferns. Thank you. Now, hey, if you're just listening to the podcast, go to the YouTube channel, check it out, or go to omgcommerce.com, watch the video. You can see me between two fern-like plants.

Andrew:

Brett is jealous of Zach and I am jealous of Brett's studio. So it's just this jealousy .. we've got going on here.

Brett:

.. Zach started it. Exactly. All right, man. Awesome. So four is the finale, right? So number four for you?

Andrew:

Yeah. So the fourth one is, so we are recording this second half of January and the vaccine is slowly rolling out. We've got probably at least six months minimum of this, best case scenario, before we get it out to everyone. But I think in that six months period, if not longer, we're going to have all sorts of weird crazy social dynamics that we don't anticipate based on some people having the vaccine and other people not having the vaccine, and people working together and maybe, because I don't think you can mandate people taking the vaccine, that people in the workplaces, there's going to be all sorts of uncomfortableness, or some people are going to be morally opposed to the vaccine, or maybe people who have it, they feel comfortable mingling at close quarters with other people, but those other people may not realize it.

Andrew:

So there's some kind of social signaling to be able to say you've gotten it, but can you really trust that the person has it? So I'm not sure how it's all going to play out, but I've started to see a few issues with this already. I think there's going to be some really awkward moments, not even just nationally in terms of the discussion, but in all of our lives where you don't know how to navigate these kind of weird murky waters, because when no one has it, there's these very clear rules and guidelines that you can abide by, but when some people have it and others don't, how does that look? So I think it's going to make for some very strange times both in the workplace and just with friends, family and your personal network.

Brett:

To that point, I think anytime something like that happens, that creates another issue for businesses to navigate, right? So something else for us to navigate with our warehouses, or our office staff, or elsewhere, and what exactly is that going to look like? We don't know, but if you think about it, even just take the mask thing, right? All of us can probably think of, "Hey, we have some friends who really freak out if not everyone is wearing a mask at all times, by themselves, with a group, it doesn't matter. We know other people that think masks are a conspiracy, right? Just no masks, it's all about control, whatever. That's such a polarizing thing, and that has created issues.

Brett:

I would tend to agree with you on the vaccine thing, and if you think about it there's really nothing else to compare to this vaccine, because when did you ever in previous years wonder, "Did this person have the flu vaccine or did they not have the flu vaccine?" You don't think about it, right? Some people get it, some people don't, everybody just lives with it, but this is something people are going to be afraid of and they're going to maybe want to ask you like, "Hey, have you had the vaccine?" And that's kind of a personal question in some people's minds, maybe. So it could be kind of a sticky issue for sure. It'll be interesting to see how it plays out, no doubt. No doubt.

Andrew:

That's all I got.

Brett:

Sweet.

Andrew:

I almost guarantee you three or four of those will be wrong, but they're fun to talk about.

Brett:

So here's the thing with predictions, you either make them so guaranteed, obvious, that they're going to come true, that they're not really fun to talk about and not a prediction, or then you're just probably wrong. And I think on my last one I'm going to be wrong. But I'm going to throw it out there. Why not? Why not go out and why not go crazy? Why not end on a somewhat crazy note? I think Jeff Bezos breaks ground on an SC in Mars. It combines multiple goals. He wants to get people to Mars, he's going to need an SC ... I'm just kidding. Totally kidding on that. But it is interesting, there is an SC being built about three or four miles from my house right now. So that's kind of ..

Andrew:

Oh, cool. In Springfield Missouri, is that right?

Brett:

Springfield Missouri, yup. Home of Missouri State. Home of Bass Pro. So right in the middle of the U.S. basically, and yeah, it is a 23 acre Amazon SCC.

Andrew:

Holy cow. 23 acres?

Brett:

23 acres under one roof. It's mind-boggling to see, and they're working around the clock. So you drive past that thing late at night and lights are on, people are cranking away working. So it's going to be interesting to see what that does. We'll have Next-Day Prime, Same-Day Prime, I'm not sure. So we'll see. But in all seriousness, and I want to go back, I know a lot of my producers have kind of had a theme, and hey, I'm an ad guy, I think about this stuff a lot, but again, in going back to the privacy thing, I believe even though we're looking at, and this will go a little bit beyond privacy just a touch and look at some of the antitrust things that are going on, Google's under fire right now, DOJ is attacking Google. A lot of people believe, and Bill D'Alessandro even mentioned it, some of the other big tech giants, they're going to be facing some heat soon, I believe very soon.

Brett:

I really think though some of the privacy issues and even like iOS 14, I think it ends up hurting the little guy more than it ends up hurting the big guys. I think Facebook, Google, I think they pivot. I think their machine learning and their AI is so much more advanced than anybody else, and they have so much more data than anybody else right now, that they're able to pivot and adapt and make things work, where maybe the real fallout and the real companies that are harmed from some of these privacy issues are the little guy, right? Like the new up-and-coming platforms, or maybe even the new social media platform that's trying to get their ad platform off the ground, I think they could maybe potentially be harmed worse than the big guy. So that's kind of what I'm going to wrap it up with.

Andrew:

Interesting. I feel like on that front, I think those big companies will probably stay fine for a while, but I think the biggest opportunity to help smaller businesses overcome the iron grip of these three or four companies is just letting more innovations foster and probably shooting down ... Like you said, I've got a finance background. I support a lot of parts of the free market, but I do think when you have three or four big companies that can buy any potential threat, because they're so valuable, and work them into their ecosystem to keep this monopoly or duopoly intact, that kills innovation.

Andrew:

It doesn't kill innovation, but it kills the competition. So if it were harder for these companies to buy these upstarts, like TikTok, or like Instagram. Instagram got purchased. TikTok I don't believe has yet. That I feel like would be something that would be a lot better for younger companies, because then you could potentially have more platforms that came up that were alternatives, and I think that's the thing I'd love to see. As opposed to breaking the companies up, just make it harder for them to acquire some of the new exciting technology.

Brett:

That's really interesting. And I in a lot of ways love the big tech companies. Like Amazon's doing a lot of cool things for consumers. Obviously a big Google guy. I love the book called In the Plex. It's kind of about the founding of Google. It's fascinating. It's inspiring. The Way Google Works is also a great book, kind of looking at the management principles of Google. There's actually a great newer book that I don't think I mentioned on the podcast that's called Always Day One. I'll link to it. I can't remember the author's name right now. But they kind of outline what the big tech companies are planning to do to stay ahead, to keep their lead. So I think there's a lot of good things they're doing, but to your point, I also 100% agree, when you've got some big players that can buy up any competitor at anytime at will, that's potentially dangerous, right?

Brett:

We do want to let the little guy flourish a little bit and let new innovation come. So I think it'll be interesting to watch some of the antitrust measures that are coming out and/or any other regulations that tie into that. I also agree with you, I'm more of a free market guy, but there probably needs to be some intervention in some way with some of these tech giants. Awesome. All right, man. Well, hey, this has been a lot of fun. We'll see if any of these are accurate or wildly inaccurate. Time will tell. But, Andrew, as we wrap up let's talk a little bit about eCommerceFuel. So I want you to share about it a little bit and then I want to talk about it too, because so many of my friends in eCommerce, clients in eCommerce, love eCommerceFuel. So I'll talk about that in a second.

Andrew:

Thanks, Brett. eCommerceFuel is a community I founded, and getting close to a decade ago, in 2012 and it's a community that's evolved, kind of grown into a community for seven and eight figure store owners. So we have over 1000 experienced store owners in there.

Brett:

I remember when it was just for six and seven figure store owners. That used to be the intro to your show. Now everybody's grown up, everybody's getting bigger.

Andrew:

It's crazy to watch some of these people that started with a 200K business that are at the eight figure mark, and it's wild. But it's 1000 members. Average store size is about three or four million dollars. 15% of our members have an eight figure store. I think collectively the group generates about three or four billon dollars in aggregate sales. So it's a really meaningful group. It's a thriving discussion forum. It's just a place where you can go, connect with people that are in the trenches that know this stuff, practitioners versus people that are just kind of thinking about stuff. So it's a great way to connect with true peers. So if you're a store owner or you have really deep operational eCommerce experience, we'd love to have you check it out and apply. So you can learn more about that at ecommercefuel.com, and then you also mentioned the podcast. So every week, every Friday, I have a new episode that comes out. Oftentimes talk with our community members, talk with industry experts like yourself, Brett, and just geek out about eCommerce for 30 or 40 minutes. And you can find that anywhere you get podcasts.

Brett:

It's good stuff. I think it's a must listen to if you're in the eCommerce space. And one thing I'll mention, I think if you're an eCommerce store and you're really trying to level up and grow you've got two things you should really consider. One is Smart Marketer eCommerce, or Ezra Firestone's Blue Ribbon Mastermind. It's a little bit different, and often that's kind of closed, because pre-pandemic that did involve like in-person meetings and it'll involve in-person meetings again at some point and some calls. So that's kind of limited in number a little bit. Then eCommerceFuel. That forum is so active.

Brett:

You have any questions, questions about software, questions about Amazon issues, questions about whatever, you post in the forum, you get all kinds of amazing responses from people that really know what they're doing that are not afraid to just share their experiences. So I'm not as good as my business partner is about getting on the forum, but I'll occasionally get in and answer questions about Google Shopping feeds or other things. It's this community where it's fun and cool to help each other. So that forum is just a wealth of information and experience and a lot of people that generally want to help. So it's pretty fantastic.

Andrew:

Well, thanks for being a part of it, you and Chris and well. It's been good having you guys in there.

Brett:

So, Andrew, this has been fun, man. I know you're a busy guy. Thank you for taking the time and talking about some crazy predictions over here on the show, and I greatly appreciate it. We'll have to do it again sometime.

Andrew:

Happy 2021.

Brett:

Absolutely. And as always, thank you for tuning in. I greatly appreciate it. Would love your feedback. What would you like to hear more of? What would you like to hear less of? Maybe you'd like to hear less of my predictions, I don't know. But we'd love your feedback. Shoot us a note. Leave us a review on iTunes. And with that, until next time, thank you for listening.

Episode 148

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Adi Arezzini - Teami Blends

Step-by-Step Influencer Marketing + Community Building for Rapid Growth

How does potty talk on Instagram lead to a thriving eComm brand and a world-class influencer marketing program?

How does potty talk on Instagram lead to a thriving eComm brand and a world-class influencer marketing program? Normally it doesn’t, but Adi Arezzini isn’t your typical eCommerce entrepreneur.

Few companies run influencer marketing as successfully as Adi Arezzini. And few people understand what it takes to build a brand and a community like Adi. What started as discussions on Instagram about gut and bowel health transformed into a thoroughly engaged community and a brand that’s growing by leaps and bounds.

Everyone says they want to build a brand. Few know what that means. Even fewer are willing to do what it takes. In this episode Adi and I break down her step-by-step approach to influencer marketing + brand and community building.

Here’s a quick look at what we discuss:

How to find influencers with REAL influence
How influencer marketing help Adi land in UltaHow to use a spreadsheet to build your first influencer lists
The difference between IG and YT influencers
How to leave nothing to chance and help influencers feel like you’re rooting for them and helping them succeed
When to pay fees for influencers vs. when to pay commissions
Tools to tracking and making influencer marketing easy
How spreadsheets can be your secret weapon when getting started with influencer marketing
Plus more!

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Mentioned in this episode:

Sean Frank

Ridge Wallets

eE 138 Sean Frank Ridge Wallets

eCommerceFuel Forum

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Adi Arezzini - Co-Founder and CEO at Teami

Teami Blends - Health Produces Inspired by the Natural Benefits of Tea

Via Instagram

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Episode Transcript:

Brett:

Well, hello and welcome to another addition of the eCommerce Evolution Podcast. I'm your host, Brett Curry, CEO of OMG Commerce, and my goodness am I excited about today's episode. I've had the privilege of chatting with our guest multiple times, and I can tell you a couple of things. One, she's very bright, very intelligent. She's a hard worker, and she's doing some amazing, mind blowing things with her eCommerce brand, and so you're going to get the inside scoop. You're going to see how she's built this company, what her superpowers are, and what you can learn from her.

Brett:

I'm just absolutely thrilled to welcome to the show Ms. Adi Arezzini. And so, Adi, welcome to the podcast, and thanks for taking the time to come on.

Adi:

Of course. I'm excited to be here and share all the golden nuggets.

Brett:

Yeah. Yeah, yeah. Just a quick teaser. You are an influencer, marketer extraordinaire. You go beyond that, because you know all about your product, and about getting people healthy and feeling the best they can possibly feel. We're going to really dive into that. But, before we do, what is your quick background? What was your journey to becoming an eCommerce superstar?

Adi:

Well, I did not know or think that I would ever be in the eCommerce world ever. Because, I didn't grow up necessarily being one with the computer life, or anything of that sort. Honestly, I graduated high school at the age of 16.

Brett:

Nice.

Adi:

I got out as quickly as I could, because I wanted to just go work full-time. I didn't go to college, and from a young age it was like very clear I had been working since I was nine years old that I needed to work, in order to make money, in order to survive. That was what was necessary. I definitely didn't have an easygoing upbringing. It was very much focused on working and surviving the best that I could for me and my mom at that time. And, when I finished high school, I worked all different kinds of jobs. I worked at a postcard marketing company. I worked as waitress. I worked as a nanny. Did anything that I could to make my rent.

Adi:

At the age of 19, I decided to join the army, which was completely, was something that I wanted to do, because I felt already at the age of 19 that I was run down. I was working 40 hours a week, paying my bills and not really going anywhere. I was like, "I need to take a break. I need to go have some sort of other experience." So, I joined the army, where I became a fitness instructor for combat soldiers in the artillery unit, which is basically like you get to tell boys to do push-ups, and crunches, and jump over walls. What could be better?

Brett:

Yeah.

Adi:

You have like 80 men in front of you, right?

Brett:

And those are like artillery. Those are the grunts. Lovingly calling them grunts, right?

Adi:

Yeah.

Brett:

But that would be the category.

Adi:

Yeah. Definitely. It's not the same as infantry, for example. They're a little bit different. I loved what I did. That's when I got really aware of fitness. Because, I myself was a terrible runner. I wasn't in shape. And going through the military bootcamp became in shape and had a really big admiration for fitness and health, because that's what I had to do for two years. I had to teach it for two years.

Adi:

Through that process, I actually ended up, during the army, developing terrible digestive problems. Because, the food in the army, I would say it's like prison food. Or, it's big cafeteria food. You're not cooking for yourself. You're not eating fresh vegetables, necessarily. And, over the two-year period that I was-

Brett:

It's just like they're just trying to pack you full of calories, right? Without a ton of regard to is this the best for you.

Adi:

Not only that, but you have to think about, they have to make food for two to three thousand people at a time, three times a day. Breakfast, lunch and dinner. So, they have to choose things that they can make in bulk, and that's not going to be necessarily always the healthiest or cleanest option. And, my stomach just started having terrible digestive issues. I became really addicted to coffee, where without coffee I couldn't really go to the bathroom. Anyone listening will know that it's become a lot of Americans daily routine. Like you drink your morning coffee and then you have your 10:00 A.M. poop. That's how it is.

Brett:

That's so true. Yes.

Adi:

It's just what it is.

Brett:

Yeah.

Adi:

I have to be real about it. And, that was fine. But, it became so bad that I just became addicted. I was drinking five cups of coffee a day at the age of 21, and it was really messing with my adrenals. It wasn't necessarily stimulating my digestive system anymore. And, when I finished the military, I was really looking for a natural solution to my bloating digestive and gut health issues. Because at the age of 22, 23, I looked like I was five months pregnant, or like a blown up balloon at all times. Nothing I was doing was working.

Adi:

So that's really the pain point of what I was trying to solve for myself, and then the whole story is that I actually did end up solving that problem for myself by teaming up with my business partner, who's still my business partner today. And our route to market was online, because who would trust a 23-year-old to go to Whole Foods and sell my product. I didn't know anything. So going online was almost like the only option. It wasn't a strategic option, necessarily. It was like that was what I was going to do because I could do it.

Brett:

Got it. Got it.

Adi:

That's really what started that direction.

Brett:

I love it. So the name of the business is Teami Blends. You want to talk a little bit about where the name came from, and then kind of what are your core products and what are you guys best known for? I know you've set the stage where people can probably guess what your claim to fame is, but talk through that a little bit.

Adi:

Well, the name Teami, I think that we were going through lots of different names at the time. And we knew that we had this detox program that was made of tea, and we ne needed to incorporate tea into it somehow. But, we didn't want to choose some sort of lame name that would also box us into a category. For example, like Honest Tea. It's just very old school and very, it will box you into something.

Adi:

And, I was more looking at companies like Apple, that I was like, "Well, Apple sells computers and iPhones, and they're not really limited by their name or by their company to what it is that they do." And, I wanted to choose some sort of small, short, iconic name like that.

Adi:

So we came up with the word Teami, which was like tea for me. And, it was super lucky that we did that, because it allowed us to expand our brand into what it is today, which is a true lifestyle brand that creates both wellness and skincare products, infused by the health benefits of tea. And so we did start with the gut health as the main thing, and then we came out with these tumblers that you can drink your tea on the go.

Adi:

Three years in, we saw that we were going to get capped, because our main bestselling product, 90% of our sales were coming from that product, which means that if that product becomes untrendy, or for some reason, people don't want it anymore for any reason, our entire business disappears. And so I knew that we had to expand into different areas, and I knew also that making more tea blends that didn't necessarily solve a specific problem weren't strong enough products to carry the business if something were to happen to our bestselling SKU.

Brett:

Yeah, then you're just competing with Stash Teas, or Tazo Teas or something like that, which is difficult to do. So, I love that. I think that's such great advice for someone starting a business, or looking to expand or start their next venture is name it in such a way that you can expand upon it. Because, one of the hardest things to do, and we'll pivot to this next is building community, and building trust, and getting people to really want to listen to you and want to buy what you have to sell.

Brett:

And so, getting in a situation where you can really only sell one thing is pretty dangerous, pretty risky. And, so you guys did a great job of setting yourselves up for the beginning, and then extending and expanding from there.

Adi:

Thank you. I appreciate that. It really did save us in the end, because how many times can you market that one product to that one customer? It really does mean that you churn and burn your customers at a faster rate than if you had 20 different products to offer them, or 50 different products. If they really had a great experience with the product that they tried, then they will trust you to try the other products.

Adi:

So, we as a company have a really high return customer rate, and just brand loyalty. Because, we have so many things that they can try and they really feel part of the brand from the inside.

Brett:

And it really gives you an opportunity. Another great point about this is it gives everyone an opportunity to buy the product they're most likely to say yes to. Because, some people aren't tea drinkers. I know that the tea is not about tea. It's about the detox. But some people are like, "Eh, tea. I don't like it," but they may really be attracted to your skincare product, and that's easy for them to say yes to.

Brett:

But then after they get to know you and they watch some of your videos, they may think, "Okay, okay. I'll try the detox teach, because Adi says it's amazing, so I'm going to do it."

Adi:

Right. It happens so mu ... You have no idea how much crossover we get. Somebody comes in and you can see that their first purchase was the detox program, and their second purchase ended up being a skincare product. What the connection is between the two, we don't know. We just know that the person now trusts us, because they had success with something, or they tried a skincare product, and then they bought our protein powder, because that's what it is that they needed. They wanted that next.

Adi:

They already trust the brand, and instead of having to do research and going to find another brand that they don't yet trust, they order from us, which is really cool.

Brett:

Love it. So, we're going to get into influencer marketing in just a minute, because that's something you're fantastic at. But let's talk a little bit about building community. Because, another one of your superpowers, I believe, is just your ability to create a video that's educational, and people immediately trust you and they want to listen to you. What are some of the keys to building community, and what are some of the things you guys have really gotten right from that aspect?

Adi:

Good questions. I think that this is one of the key things that make you a brand or some sort of what eCommerce seller selling stuff. It's like the main difference. When someone says they want to start a brand, I don't know if they really understand how much you have to invest in the people that are buying the products to actually make you a brand.

Adi:

Just because you're selling something online does not mean that you have a brand. And, a brand is something that is recognizable, and it's somebody that someone can see the logo, or the product, and they know what the brand is about. So, with using Instagram, or YouTube or social media, you have to be able to go to that platform and see what the brand is about.

Adi:

And you have to have a combination of education, and fun and engagement, and your products. Because, if you're only showing your products at all times, it's really hard to stand out from the crowd. What makes your skincare different than all the other skincare out there?

Brett:

Yeah, totally agree. It's one of those things where I think some people will want a brand just because they want the fame or the glory that comes with having a brand. But, they don't realize how hard it is to build a brand or what that means. And it actually means obsessing about your community, and listening to your community. I think one example ... You mentioned Apple before. Obviously, they're very good at branding in a lot of ways, and they obsess over things.

Brett:

Nike's also very good at branding. And think about even some of the stuff they've done, if we talk community, they've taken some social stands recently that wildly popular with a lot of their audience, and not so popular with other decent sized chunks in their audience. But, they really don't care about those that are not supportive of their stance, because they know their market, their core market. They know them, they love them and they support them.

Brett:

And so I think, one of the things, and it seemed like you did this really well, one of the keys to building a brand and building communities is listening. Like, listening and knowing what your community wants, and then delivering it, and delivering it authentically. So, any thoughts on-

Adi:

In order to break-

Brett:

how you've done that well? Yeah. Go ahead.

Adi:

Yes. In order to put that into layman's terms, how do you listen and how do you actually execute on everything that you just said? This was something that came naturally to me, and I saw it as a, I can say a super power. This is, I've been working on Instagram for about seven years with our brand. Instagram seven years ago was nothing like what it is today.

Adi:

So, the thing that I would always do is I would always communicate in a way that I would be talking to a person right in front of me. That is something that people just miss. They just miss that. So, if I was writing a caption or communicating to my audience, I would communicate to them like I would communicate to you. Like, "Hey, guys, so I've been thinking about something," and then I would talk to them about it, or I would ask them a question like, "How many times are you going to the bathroom a day? Like, be honest." And really talk to them in that way. And people-

Brett:

Did you get a lot of response to that question? Like, was that a question people were cool answering?

Adi:

Absolutely. One of our best like Instagram captions is like, "bathroom talk". You know? Because, that is-

Brett:

That's fantastic. Yeah.

Adi:

No one wants to talk about it. You know?

Brett:

Right.

Adi:

And, that kind of communication, which is asking questions very, in a clear authentic way, and then, we have a customer service team, and this is, again, how I built the business from the ground up, because it was my policy and then I put it into my business, which is that every single comment and DM must get answered immediately.

Adi:

So, we have people that their jobs are answering Instagram comments. And we have shifts. We have a day shift and a night shift, and a weekend shift. And, they answer those comments, and they answer DMs, and that aspect of it is what built the community. Because, they're getting not only like amazing responses, human responses. Not bot responses, not Vas. Real people that know our products. Someone will come in and ask us, "What do you recommend? I'm a mom. I just gave birth and I feel like low in energy. What do you think I should do?"

Adi:

Then, they can actually recommend via the DM products and link them to those products. And, people will ask us all sorts of stuff. And, the fact that they are getting a real human response and it's not a short response. It's a thought out response. Every time, it's a unique response, that has been major. And we've been doing that, you have to think about it, for seven years. And that's still part of the core operations.

Brett:

Yeah. That's awesome. And really, yeah, seven years ago, even a couple years ago, most companies weren't doing this. That was even, the word for it's conversational commerce, where the connections and those conversations we're having on social media and through chat and through SMS and things like that kind of replaces what used to happen if someone came into your corner market, and you could chat with them. But you guys were really, really pioneers as far as that goes.

Brett:

If you think about that, someone responding, a brand responding to your question in the moment, when you're late at night, you're a mom, you can't sleep or maybe you're just nursing your baby, and so you type in this question and then they respond immediately, man, how powerful is that? That you want to buy from that company at that point.

Adi:

Totally.

Brett:

That's awesome. Any other comments on that? If not, I want to move on to influencer marketing here pretty quick.

Adi:

I think the last thing about building a community is to know that you have to be really consistent. We post on Instagram every single day for the last seven years on stories in our exclusive Facebook group. And, we show them how much we appreciate them. That means that we're not just like, "We appreciate you." Like, we show them. We give them VIP exclusive access. We create excitement. I ask them questions. "Guys, what product do you want me to make next?" And they'll tell me. And I will go and make that product that they told me that they wanted.

Adi:

And so that communication, the asking and the delivery. We're not just asking for the sake of asking, but I'm asking for the sake of doing and executing on. So, they trust me and they trust the brand, because they've seen us expand over the last seven years from detox, to skincare, to wellness, and so on.

Brett:

Yeah. That's so awesome. Yeah, you quickly lose trust if you say, "Hey, tell me what you want to hear more of or what products you want." And then if you ignore that or don't act on that, it's like, well you don't really care. You know? That's a fact.

Adi:

So many people do it. So many people do it.

Brett:

They do.

Adi:

They're like, "What do you want to see from us next?" And, I never see that from them next.

Brett:

Right.

Adi:

I never see it happen.

Brett:

Yeah. Which, when you do deliver like you guys do, one that just builds the community, it makes it stronger, it makes people feel like Adi and her team are connecting or delivering, and then they're listening to me. But then also, they want to buy. Like, "I said I wanted that. You delivered it. Now I'm going to buy it."

Adi:

Totally.

Brett:

And so that's super powerful. Well, let's talk influencer marketing. This is another one of your superpowers. You guys are amazing at this. You built the business on this. As a quick reference, for those that have not listened, I recommend go back and listen to the Sean Frank episode. Sean Frank from Ridge Wallets. That episode's getting some traction, and it's being talked about in some forums, eCommerceFuel and some others. That's a great overview of how to do some influencer marketing.

Brett:

But I think what we'll do here, Adi, and you actually volunteered this, is let's maybe go step-by-step a little bit into how you run influencer marketing. And maybe kind of set the stage. Like, what influencer marketing has meant to you, and what platforms you run influencer marketing on. And then, after that we'll kind of get into some tactical stuff.

Adi:

Sweet. So, I want to be very, very clear. Influencer marketing has been and still is the number one traffic driver of cold sales and traffic to my website, period. It is the thing that I figured out because I wasn't a digital marketing nerd, in the sense of Google or Facebook. Those things, they seemed to expensive. And at the time, I wasn't there.

Adi:

I was like, "What can I do? How can I spread the word about my brand?" And I had to figure out something that seemed doable to me. And, seven years ago, I saw Instagram was being used very in the beginning stages for product placements. But, what I saw was being done really incorrectly was people would pose with a product, and they would say, "Hey, I'm using this. Go buy it."

Adi:

And, the companies, they were choosing influencers based off of how many followers they had, or vanity metrics. Likes, comments, and not really finding out which influencers actually had influence over their audiences. And, what that meant is in the beginning-

Brett:

Such a key point. Not all influencers actually have influence, right?

Adi:

And I know this. We've learned it the hard way. At the time, people were mainly using models to send skincare and wellness products, which is totally wrong, because the models have male followers. So, it just has, it has no value. It builds no trust. It just looks cool for a second. And, I just started going down rabbit holes on Instagram, and finding actual influencers which now are very, they're very clear to see that there's different groups, and niches of types of influencers.

Adi:

But still today, we have to go and we have to find the influencer, and vet them to see that they're actually influential. And we do that in a couple of different steps. That's just an overview, but I would like to just mention to everybody that this is still the main driver of our business. We have a team of eight people in-house that this is their job 40 hours a week. And, not only that, I want to double the employees in 2021 for how many people do it.

Brett:

Wow. Eight full-time people. Want to get to 16 next year. That is phenomenal. Let's break that down, then. Yeah, I would love to actually hear the steps of how you identify if someone actually is an influencer. But, is that the first step or is that something you recommend doing first as you're getting started with influencing?

Adi:

Your first step is what is your product, and what is the type of influencer that would influence your product. So, in regular marketing you could call that an avatar. So it's like who's your influencer avatar? Who is your person?

Adi:

For us, for example, people that work really well for us, like let's say someone's on a wellness journey, there's a lot of influencers that they track their progress of their journey to wellness, or their journey to their goal or whatever it is that they're doing. They might also be a mom. They might be a nurse. They might be this person that's on their journey to live their healthiest life. Right?

Adi:

Now, that person would be a really good person to include our detox program in their journey, because their followers, they already know that they are on a wellness journey. And so, for them to be promoting a wellness product doesn't seem strange. The product that your influencer is using has to be native to that influencer. If it's not, then it also will upset their followers, and it will not create purchases. I can give you a specific example.

Adi:

When I was first starting this seven years ago, I started working with a lot of food accounts, because food accounts had tons of followers, and their videos would get tons of engagement. I was like, "Okay, great. Maybe we'll just have this recipe, and we'll have the food next, and we'll have the product next to it, and they're going to mention it," and then just not sales. I tried it out with many different accounts. No sales. Another niche was yoga instructors. Nada. It just didn't work. It didn't resonate with our audience.

Adi:

And, I did a lot of testing and I figured out who was the right person for me. So, the first thing that you must do is find out which group of influencers will represent your brand. And it has to go in specifically with them. Like, even fitness instructors, like really mega high end fitness instructors, only a specific amount of them worked for us, because the people that are following them are following them only for fitness advice.

Brett:

Yeah.

Adi:

That make sense?

Brett:

That's so fascinating. I think one really important lesson here is you could, you could get started on this process and identify some influencers that you think would just be perfect. You try it, it doesn't work, and then you say, "Eh, influencer marketing doesn't work for my business."

Adi:

Exactly.

Brett:

I think really it's just that you haven't quite identified who the right influencers are, and where someone has to be in their journey to mean they're likely to be a customer. And, that they're going to take the advice of an influencer. I kind of see, like on the food side of things, like a food influencer where maybe somebody's following that just because they like their recipes, and they like to cook. Maybe they eat healthy, or maybe not. Still, I think that it's totally smart to try that.

Brett:

The yoga instructor one. That's a surprise to me. That one seems like that would've been a slam dunk for you guys. Any theories on why that didn't work?

Adi:

This is seven years ago. So, a lot of their content was videos about yoga. And, anything that was not a video about yoga, like a specific posture in yoga, it would upset their audience. That's the thing. So what we started doing, one of the things that I noticed is, okay, accounts that post selfies are accounts that will do well with our products, because they post that kind of content.

Adi:

And so, we found that accounts that don't post a lot of themselves in a selfie format, they have a hard time representing product. Because, how can they show that they're using that product to their audience in an authentic way? But, to make this more simple to people listening, you need to create an Excel sheet. The first thing that you do in that Excel sheet is you create tabs at the bottom. And this is an old school way. I have a much newer modern way, but it's a software that I use internally that I created internally. It's not something that I sell or anything.

Adi:

So, anyone that needs a simplified free way, this is how you would start. With an Excel spreadsheet, or a Google Sheet. We'd have five tabs at the bottom, and each tab would be a different group. It would be like fitness, yoga, whatever it is those five groups are. Marketing. Whatever that is. And just try 10 in each group. And you put their names in the column, and once you've identified this is the person that I want to work with, you reach out to them. And you reach out to them by doing two things. You email them and you DM them at the same time.

Adi:

And you must do both. So, you email them, and in the email you must not use a template that is very long and that doesn't make any sense to the person that you're communicating with. You do need to take a minute of your time and actually go research that person and say something in the first line that will communicate to them. And that doesn't mean like, "Hey, Brett. I saw that you love marketing." You know?

Brett:

Yeah.

Adi:

That doesn't mean that-

Brett:

Or, "I love your website at url. Here."

Adi:

Yeah.

Brett:

Like, okay, yeah. That's clearly a template.

Adi:

Or like, "Brett, as the CEO of OMG Commerce," you need to actually say something that will mention something real. Like, "Hey, Ashley. My name's Adi Arezzini. I'm the co-founder and CEO of Teami Blends, and I love that you have three kids. Your son looks so cute in the post on Wednesday."

Brett:

Yeah. Yeah, yeah, yeah.

Adi:

You need to be very specific in what you say. And it really only takes maybe five minutes, right?

Brett:

Yeah.

Adi:

So, maybe five minutes.

Brett:

And I've had, and just to do a quick followup on that. I have people reaching out about the podcast a lot. Sometimes I'll have people say, "Hey, I love your podcast. I really loved this episode." It's whatever the most recent episode was. I'm always like, "Okay, yeah hard work there." But I do like it when someone says, "Man, love the podcast. I listened to this episode when you and so-and-so were talking about this. That was amazing." I'm like, "Okay, this is real. This person really took the time to email me. This is not a template."

Adi:

Right, and that's just like 101 sales. Right? The rest of it can be a template, but the beginning needs to be real. Once you've reached out to them, and you've DMed them, "Hey, Brett. I sent you an email. I'm really excited. I really want to," blah, blah, blah, whatever it is that you're going to say.

Adi:

So, you message them, you email them. Once you have them interested, you then need to sort out if that person is somebody that you're going to pay a flat fee or you're going to pay them commission. So, we have two teams within our influencer marketing structure: a commission team, and a paid team, which is something that's really important for new people starting out.

Adi:

I would not pay anyone a flat fee until you know which accounts work and don't work. You need to build confidence in your ability to gamble, because it's a gamble.

Brett:

It is. Yeah.

Adi:

You're seeing all of these metrics, whether they're on YouTube or Instagram. How do you know who to pay $1,000 to and who not to? Right? It's very questionable. So the only way that you're going to find out is by-

Brett:

So, stick to commission based first until you get things figured out.

Adi:

Right. So, that's what I did. And, through working with hundreds of commission based people, which again, I would start with 50. 10 in each group, and then go from there. I realized, "Okay, good. This account made me 10 sales. That was $500 in revenue, and let me go find more accounts like this account and see what happens, and see what will happen if I pay them $100 for a post. Will I still make $500?" And you're able to kind of go in and take risks in that very conservative way in the beginning.

Adi:

So, again, back to the Excel sheet. You have listed them. You have contacted them. You have to followup. This is, again, 101 sales. I use a shortcut called Boomerang, which is a Gmail shortcut.

Brett:

Yeah. Great tool.

Adi:

I highly recommend it. I Boomerang almost every email that I send out. Because, I send out so many emails, even to my employees. I want to make sure that that person responds to me. Whatever it is, even if it's not influencer marketing I'm like, "Hey, can you make sure to do," blah, blah, blah, I want to make sure that I get a response. So I always make sure to Boomerang it back to me. Like, send it back to my inbox if the person doesn't respond in X amount of time.

Adi:

That ensures that you're not wasting your time sending out all these emails, and hoping and crossing your fingers that someone will respond. Because, that's not going to happen.

Brett:

Yeah, or relying on yourself to remember, right?

Adi:

Exactly.

Brett:

To remember to followup. And so Boomerang's a great tool that takes that off your plate.

Adi:

Right. So you're going to Boomerang these for a week later. And, if they don't respond, send them a followup. Boomerang it again for a week later. I usually followup with someone-

Brett:

And that followup, that second time you reach out, you're doing that DM and email as well?

Adi:

Usually, yes. But, mostly via email at that point.

Brett:

Okay.

Adi:

Just because it's a little bit faster. And, once you do get somebody to respond, you're like, "Okay, great. This person's doing commission. I'm going to offer you free product and 10% commission." And then you need to also have some sort of agreement on what they're going to be doing for you. So, if it's Instagram, is it going to be a feed post? Is it going to be stories? Is it feed and stories? What is it going to be?

Adi:

And, you kind of tell them this is what you want them to do, and then they agree to it. Only after they've agreed, do you send them product. You don't send out your product, your cost of goods just blindly. A lot of people do that, and you're just losing product without any follow through, without any agreement with the influencer on what's going to happen.

Adi:

Something that's very specific to Teami that not a lot of companies do is that we'll usually lock in three to four deliverables in the beginning. So, it's not just posting once and then it's over. Because, the first post might not get any sales. We need to try something else. We need to kind of see how it goes. And, that goes back to creating the community, which is creating that relationship. You actually care about the influencer as you would care about a customer. You're building that relationship with them.

Adi:

The more that you build that relationship with them, they feel a personal connection to the brand, so they'll do you favors. They'll do you favors. They love working with you. You know?

Brett:

You feel like a good partner at that point, and they can tell that you're interested in their success. Their audience's success, but their success as well. So, when you're kind of framing that, are you saying, once they give initial agreement together, "I'd like to work with you," then do you say, "Great, here are the three things we recommend you do. That you do a story and a post like this." Do you spell that out pretty clearly?

Adi:

Yes.

Brett:

Or, do you kind of let them do what they want to do?

Adi:

No. We spell it out pretty clearly, specifically on Instagram. And on YouTube we're like, "Okay, we want a two to three minute inclusion at the beginning of the video, at the middle of the video. Something like that. And, this is kind of a trick that I have our girls do internally. Which is, when the person's getting ready to post, the influencer, it's really good to give them examples from their own content about what you want them to do. So, go to their Instagram page-

Brett:

Love that. Yeah.

Adi:

And say, "Here are three posts from your page. Do exactly like this." Because, sometimes the influencer can get scared or stuck like, "How do I promote this product? How should I do it?" Be like, "Do it just like this," or here are three YouTube videos. From this minute to this minute, this was amazing. Do something like this. So, you're actually controlling-

Brett:

And I love that you're giving examples from their content. I think it's one thing. And you could give examples probably from other influencers, and that would be useful too, but from their own content, that's brilliant.

Adi:

Because, it's their people. It's their followers. And, you would be shocked at the difference between a post that fails and a post that succeeds from the same influencer that we have worked with, the same influencer getting paid the same amount of money. One succeeds and one fails. Why? The content. The content did not resonate. It just wasn't good. And that's when we started having to, anyone that's paid, we have to approve their content, especially on Instagram-

Brett:

Makes sense.

Adi:

Beforehand.Because, if I'm going to pay them $1,000 for a post, and I can see that the content is not good, I'm not going to pay them that money. I need them to retake that video or retake that video, that picture. So, yeah. Once you have gotten their content and it has been posted, which again, you're following up like, "Hey, so how's next Thursday? You ready to post?" Like, it's a lot of trailing, and tracking and controlling the process.

Adi:

From reaching out, to following up, to getting them to agree, to sending our product to then getting them a time and date that they're going to post and getting their content. If they're a commission, I wouldn't even bother to vet their content first. I wouldn't even bother to do that.

Brett:

Yeah, it doesn't matter, right? It just takes up too much time at that point.

Adi:

Especially if you're doing it at skill, which we are. But, you must give them a code, and with that code you're going to track their success. And so, it's like a last click basis. And, you are tracking their codes, and through that you can say, "Wow, this influencer had five codes used. This influencer had 10. This influencer had 0." And start to put together some common denominators why some don't work and some do, which is how I know that food doesn't work and yoga doesn't work. But, girls with curly hair work. But, girls that shop at Target work. And, people on wellness journeys work. So, that's how I know.

Brett:

Wait a minute. Why the curly hair? You've peaked my interest. No idea?

Adi:

No idea. I can tell you why, actually. Girls with curly hair, whether it's African Americans with curly hair or Caucasians with curly hair, curly hair is like, "Oh my God. What do I do with my hair?" So, if you have an influencer that is talking about the products that she uses for her hair, and she's recommending those products, her audience then goes and buys those products, trusts those products, uses them, has great results, and anything else that that person recommends is now trusted, right?

Brett:

Interesting. Interesting. That's so great. Yeah.

Adi:

When you have a problem ... Curly hair accounts, they are targeting people that also have curly hair and have similar problems to them. Same as wellness accounts that are on a wellness journey. Their followers are also on a similar journey, and so, when they're recommending things, it makes sense because they are looking at someone who's tried and done it. Curly haired girls are great recommenders, at anything. They can recommend anything.

Brett:

Interesting.

Adi:

Yeah.

Brett:

Super, super interesting. Great. So then, kind of what's the next step in the process?

Adi:

After you have seen results, then it's rinse and repeat for that same niche. So, you need to find out who was that person? What about them specifically? And you will find thousands of other accounts that look just like them. And you need to work with them. I call it within my own company, we call it flooding that niche. And make sure that every influencer within the curly hair girl accounts uses Teami.

Adi:

It becomes this like loop, where everybody sees Teami in that one group. And so, that's what we do. For example, we are currently, we're working heavily with keto accounts, so that would make sense for our product. They can use our Greens Superfood Powder. They can use our tea that is keto friendly. And, we just work with a ton of keto accounts, whether they're YouTube or Instagram, and we just kind of flood that niche. And then when we feel like we're done, we kind of move over to another niche that's similar to it. Maybe it's gluten free.

Brett:

Yeah. That's so great. And, so are there any tools that you recommend to make this easier? What are some of the ... I know you guys are so serious about it you built your own internal software that you guys use. But, any tools for tracking, for reaching out? I know we've already talked about using spreadsheets for keeping track and using Boomerang to remind you to follow up with somebody. But, any other tools you can recommend?

Adi:

Those are the free tools. Paid tools could be, GRIN is a platform that's pretty popular right now. It's a great way to seed and find influencers. But again, if you don't know what keywords you're searching for, you're going to have the same problem as if you were checking in on your phone.

Adi:

But, if you do know the right mindset of what is the group that I'm trying to find, and what would that influencer put in their bio? You can also search by keywords in someone's bio. But, you have to have the mindset first that before using a tool, any type of tool. And then, something else that we use a lot is Slack or Asana. And we do that to, we use Asana for influencer team. Because, you want to see where that campaign is at at all times.

Adi:

So, once you've gotten Ashley's commitment that she's going to post Wednesday at 3:00 P.M., whatever that time is, you put it on your calendar, and then you followup with that person that same day, "Hey, Ashley. It's Adi at Teami. I'm so excited for your post today at 3:00 P.M." It's very, very monitored. So, you have to be willing to do the work yourself, and then train someone else to do the work for you. I would hate to burst someone's bubble and tell you that it's super, super easy and that it's like very automatic. But, it's not.

Adi:

Once you figure it out, you then train somebody else to do it, and you can scale by having multiple people in your company do it. But it's not the same as paid ads. You know what I'm saying?

Brett:

Totally. Yeah. This is very much a process. It's a system. You have to think, these influencers are, they're either really busy, because maybe they have a job and they're doing the influencer gig on the side, or maybe they're a little bit of a prima donna and an influencer, or they're a creative type. Their priority's not your promotion and your post, necessarily. And so, you've got to make it as easy as you can for them. I love those reminders.

Brett:

I can tell just by the way you're framing it, all those reminders are upbeat, and they're positive. It's not like nagging or anything like that. It's just, it's helping. I'm going to help make this easy for you, so that you can win, we can win, your audience can win, and that you're leaving nothing to chance, though.

Adi:

Yeah. Nothing to chance. You control it. You are in charge, from start to finish. We also had a creative solution recently. Like, if you're going to be working with someone, let's say they're an Instagram account, and you did their first post, and you want them to do a story mention, and you want them to give their community an update about that product that they're using, but they respond and they tell you, "Oh my God. I'm on vacation and I left the product at home. I don't have it with me."

Adi:

We recently thought about just another solution. You just can take it from your archives and be like, "Hey, guys, remember when I was talking about this product three weeks ago?" And you can pull it from your archives or show it. And you can authentically update your followers without having the physical product in your hands.

Adi:

So, we found all these sorts of solutions for kind of things that influencers will tell us on why they can't do something. And, we'll be like, "Oh, well we totally understand, but here's something that you can do." And we always kind of find solutions like that.

Brett:

Yeah. That's awesome. Sounds like Instagram and YouTube, those are the two main platforms where you're looking for influencers. Is that right?

Adi:

Yeah.

Brett:

Any differences in the way you approach the two? I'm sure a lot of the outreach and some of that is the same, but any differences in the two platforms?

Adi:

The main difference is is that YouTube takes longer to close a deal and to get the content up. And, we have a lot more Instagram than YouTube because of the speed of it. But, YouTube is incredible. It gives consistent sales for longer periods of time, even when you're working with the micro or the macro. But, YouTubers also tend to price themselves a lot higher than Instagram. And, so it's a give and take. We have a blend.

Adi:

I definitely want to be focusing a lot more on YouTube in 2021, because I would say yeah maybe like a 70% Instagram, 30% YouTube right now. And that's just not because we prefer Instagram. It's just we've been on it longer. And, a lot of the celebrities that we use, or big influencers, don't have YouTube. They're like just Instagram people. But, we are branching out into YouTube as well. I definitely recommend doing both.

Brett:

Yeah. Totally makes sense. And I think that's a great way of positioning it with Instagram. You're going to be able to find lots and lots of influencers, and pretty quick to get an influencer to create some content. Creating an Instagram story can be very fast. But YouTube content's a little different. There's more production time. It's usually longer content. But, it also lasts longer. And it may just get stronger and stronger over time, because of the way Google, YouTube's algorithm works, and ranking, keyword ranking and stuff like that.

Brett:

So, that's fantastic. Anything else that we haven't mentioned that's going to be next in your approach to influencer marketing? Like anything you're really excited to test next? Something that's maybe not too top secret?

Adi:

Yeah. I think we really haven't dove into TikTok very much, just because we haven't had enough staff to do it. TikTok right now doesn't have a really easy way to have codes. Like, we wouldn't be able to track that person's code very well. We could see traffic to the website from TikTok, but being able to add an affiliate code and all that stuff. I think that in 2021, we need to try TikTok, after adding more staff and being able to just spend time on it, that's one of the things. But one thing I did want to mention is, someone listening could be like, "This is so much work. I'm definitely not going to do it. What's the benefit of this?"

Adi:

The added benefit, aside from the traffic to the website and purchases is name recognition. I could tell you that so many people, no matter if my business is doing well or not well, internally, I will see people and they'll be like, "Oh my God. Teami's killing it. I've been seeing you guys everywhere." And so, that has a benefit. It's PR.

Brett:

It's huge. Yeah. And I love how you're going deep on one category. Like, keto, or those on a fitness journey. Because, it's kind of one of those rules where kind of the rule of if you hear something three times, it's like everywhere. Where you see one influencer talking about a product and you may think, "Oh, that's kind of cool. I like that, and maybe I'll try it." You hear two people talking about a project and you're thinking, "Man, this is pretty popular." But you hear three people talking about it and you're like, "Hey, they're everywhere. Teami's everywhere. I've seen different influencers talk about them."

Adi:

Yeah.

Brett:

Yeah.

Adi:

And we can really flood people's feeds in any way, shape or form. And, it has created a brand for us that I don't think that without influencer marking that we could have become as big, as known. We, three years ago, got into Ulta Beauty. We're in every store in Ulta Beauty.

Brett:

Wow.

Adi:

They took us because of our social media presence.

Brett:

Because of the power. Yeah. Yeah.

Adi:

They're like, "Wow, you guys have a brand, and we see that." When Ulta is running a promotion on our brand for Thanksgiving or Cyber Monday and we send people to Ulta.com, they see an increase in their sales and they're very happy with us. So, it provides other opportunities. It provides opportunities for me to be on podcasts with you.

Brett:

Absolutely. Yeah.

Adi:

And things like that thar our brand I don't think would have if we didn't have the exposure. It's a lot of exposure, and it creates a lot of affinity for the brand.

Brett:

Yeah. I love it. You guys are killing it. I love your brand. I love your site. Products are awesome. Keep up the good work. It's so cool. Adi, for those that are listening and thinking, "Man, I've got to follow this more," obviously they should go visit your site and get on your list and buy your products and see what you're doing. It's a great way to learn. So talk about your website just really quickly and then how else can people connect with you?

Adi:

Yeah. They can go to www.teamiblends.com, which is our website. They can go to @teamiblends on Instagram. They can follow me personally at @adiarezzini. You can really DM me, ask any questions. I'm here for you guys. And, that's how to basically get in touch with me or our brand.

Brett:

Sweet. I will link to everything in the show notes. This will be available at OMGcommerce.com/podcast. Adi Arezzini, ladies and gentlemen. Adi, this was so fun. You crushed it. This was awesome.

Adi:

Had so much. Thanks, Brett.

Brett:

Awesome. Thanks for coming on. And, as always, thank you for tuning in. I would love to hear more from you. What would you like to hear more of on the podcast? Where would you like us to go next? Do you have any guest suggestions or ideas? Reach out and let me know. With that, until next time. Thank you for listening.

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Episode 147

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Emma Schermer Tamir - Marketing by Emma

Branding + Listing Optimization on Amazon

My guest today is Emma Schermer Tamir - Co-founder of Marketing by Emma.

Once upon a time you could source any old product you wanted from Alibaba, slap your name on it, throw up a listing on Amazon and presto! Instant sales. I personally know several people who sold 7-figures + per year doing this. Well….those days are over. Everyone I know who ran that kind of business is either 1. Out of business or 2. Had to make a hard pivot.

To succeed on Amazon now you need to build a brand. You need products that delight customers and serve a unique purpose. You need listings that clearly communicate your brand difference and value proposition. And you need to work on driving rankings the right way.

My guest today is Emma Schermer Tamir - Co-founder of Marketing by Emma. We talk about how listing optimization on Amazon has shifted in recent years and how brand building now plays a major role in your success on Amazon. Here’s a look at what we discuss:

From brand registry, to making customers happy, to Google traffic - why building a brand makes sense.
Spammy product titles or more pleasing to the eye titles - what works and what doesn’t when crafting the perfect title
Why skimmability should be one of your primary goals when writing bullet points and descriptions
How proper listing optimization on Amazon can possibly lead to more traffic from Google
What great brands can teach us about A+ content, product differentiation, and breaking through the noise on Amazon.

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Mentioned in this episode:

Prosper Show

Amazing Selling Machine

Alibaba

Prosper Show Blog by Emma

Amazon A+ Content

Black Rifle Coffee Company

elf Cosmetics

SplashEZ

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Emma Schermir Tamir - Owner and CEO at Marketing by Emma

Extreme Ownership by Jocko Willink and Leif Babin

Marketing by Emma - Copywriting and Amazon Listing Optimization Services

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Episode Transcript

Brett:

Well, hello and welcome to another addition of the eCommerce Evolution podcast. I'm your host, Brett Curry, CEO of OMG Commerce. And today we are talking about a topic that is super duper important. It's important for right now. And I believe this is really where the marketplace that is, and the behemoth that is Amazon. This is where things are going. And so today we're talking about both branding, brand building and listing optimization. How those work together on Amazon. What you need to be considering right now and how you need to be planning for the future.

Brett:

My guest today is an expert in this space. You've maybe seen her speak at events like Prosper Show. That's actually where we met. She and I both spoke at a recent Prosper Show. I say recent, it's been maybe a year and a half ago. Time doesn't make sense anymore now in this COVID world.

Brett:

But we met at Prosper and it was crazy because we're both from Missouri. And how often does that happen? It doesn't happen very often. She's in Columbia, which is where Mizzou is or University of Missouri. I'm in Springfield. This is where Missouri State is. Oddly enough, we're not that big of rivals in sports and whatnot. But I'm delighted to welcome to the show, Emma Schermer Tamir. She is the co-founder and CEO of Marketing by Emma and I'm really excited about this topic today. And so with that, welcome to the show, Emma. And how's it going?

Emma:

Thanks for that introduction, Brad. You are right. It is a rare opportunity to meet a fellow Missourian, especially in the e-commerce. I think people when I say Missouri, they kind of look at me with a blank glaze and say, "Why would you live there?"

Brett:

Exactly. It really is, so quick plug for Missouri is great. There's hills and rivers and lakes and hiking and fun stuff.

Emma:

Yeah. It's beautiful.

Brett:

It's beautiful. Yeah. But I remember I was talking to this large shoe company based in California, we're running their marketing. And he learned that we were in Missouri. He's like, "Oh, I don't think I've ever spoken to anyone from Missouri." And I'm like, "Okay." We do have the internet. We do understand marketing and e-commerce and all that.

Emma:

Yeah, yeah. We are not completely off the grid. We are connected to the rest of the world. But yeah, I am the co-founder Marketing by Emma. We help e-commerce businesses with their copywriting needs, helping them really connect with their dream customers but also, helping them to tell their story in a compelling way that is going to help them stand out from the noise, grab attention and hopefully develop some of those long-term relationships. So it's not just about making that initial transaction, but really building that into something more and ongoing.

Brett:

Yeah. I love it. I love what you guys do, love your work and it's very much needed and it's really important for right now. So before we get into this topic of brand building on Amazon, listing optimization and copying and all the things that you do. Give us just the quick kind of 90 seconds or so background, how did you get into this space and what was the Genesis of Marketing by Emma?

Emma:

I will try my best to keep that within 90 seconds, I can get a little winding with this story, but essentially I have a marketing background. I kind of fell into marketing by being skilled at writing. And on my second date with my now husband and also my co-founder, we were talking and he was already trying to convince me to let him put me out there and connect me with people that he thought would get value out of the work that I would be able to do for them. And we're both very stubborn, but I guess in this sense he was more stubborn and kept pushing and eventually it transformed into a business far beyond what we could have either of us, I think imagined.

Brett:

Well, big thank you to your then new boyfriend now husband. It's a bold move. And I'm just wondering, was that a move to try to like secure future dates? Or was that was a move to say, "No, I think we got a real business here." And possibly it was both. And so, kudos to your husband. Good moves, good moves.

Emma:

Yeah. I think he just saw how miserable I was at my job. And I had that tendency to always go put myself out there more than what I should at a job. Do too much and then it really starts to wear on you, but it's totally different when it's your own business because all of the too much is for yourself and what you're creating and how you're serving your clients. So it's very different.

Brett:

Yeah. That is awesome. Love that story. And so, as we transition to this topic, you and I we're prepping for the show and we've used your company for listing optimization and some copywriting services and you guys do great work there. So we're kind of getting into the, hey, let's talk about some of the ins and outs and some of the new ways to optimize listings, and that's certainly important. And we're going to talk about that today on the show, but it kind of morphed into, that's important and will probably always be important but branding is important.

Brett:

And thinking about your Amazon business more than just, how do I rank, how do I sell more widgets or move more product, but thinking about it more holistically and thinking a little more long-term is huge. So just a quick background to set this up. I'm part of different marketing and e-commerce groups. I'm connected to a decent number of people in the space. And I just remember several years ago when kind of amazing selling machine just came out, which was an awesome product, taught people how to make money on Amazon, one of the best info products ever. There's this trend of people going and sourcing random stuff on Ali-Baba, slapping a label on it, sending it to Amazon, selling it.

Brett:

And in a lot of cases making a killing, right? But there was no creativity or work there other than just arbitrage and finding, oh, people are looking for this. There's not a great product. I'll go source it from Alibaba, put it on Amazon. Bingo, I've got a business. But here's the interesting thing. Most of those people that I met back in that day, if that's all they did, they're out of business. Or they've had to really aggressively pivot and make their product better and work on branding and things like that.

Brett:

And so, I think this was where everything in marketing and e-commerce is headed, where you can't just gain a system, you can't just rank and optimize to make a sale today. You have to think long-term, you have to build a brand and a reputation and think about your business as a real business rather than just, "Hey, we're selling a couple of products on Amazon." And so, before we get into some of the details here, when did you kind of first have that revelation that, "Hey, branding is important even for an Amazon first business, an Amazon seller." Did you always think that way or any light bulb moments you can think of?

Emma:

Yeah. So I feel like I come to this space a little bit differently than a lot of people and especially service providers. It seems like a lot of service providers are coming in after already having been selling themselves and then want to provide whatever it is that they're really great at. Whereas I'm coming from a writing and marketing background that I've worked with startups, I've worked with fine dining, I've done creative writing and all of those sorts of things. And so, I really understood the importance of story and the importance of the impression that you make and the words that you use to present yourself. And so, I've always felt that way.

Emma:

And what I'm really excited about is that more and more, we're getting all of these inputs that saying, this isn't just something to kind of play around with or contemplate doing, but this is something really important that you should be doing if you want to be setting yourself up with a healthy business that can grow and continue to grow over time. Even if you only want to be selling on Amazon, Amazon is telling you branding matters. And then of course, if you want to expand beyond that even more so.

Brett:

Yeah. It is becoming important, even for an Amazon first business. It's interesting, the perspective we have at OMG Commerce, we have a way of growing a client list and growing team, we're at just over 42 team members. We have basically two divisions of our company. We have the Google ad side, which is Google search shopping, display, YouTube and then the Amazon ads and Amazon optimization side of the business. And it's interesting, on the Google side we have some pretty big brands like P&G brand and other larger fast-growing e-commerce companies.

Brett:

On that side, those clients are really aware of the need to build brand and think both in terms of measuring the performance of our search and shopping and YouTube, but also creating brand lift and creating brand awareness. And then staying on point with your brand message, that's kind of second nature for that group. On the Amazon side, we have a lot of brands we work with, or companies that we work with that were born and raised on Amazon. And it's a little bit of a foreign concept that they don't think about branding in the same way. It's not a second nature. It's more about, how do we get ranking?

Brett:

How do we get sales today? Forget about anything else. And so the way things are shifting, and we'll just use one example, and this is something that's very comforting to me as a shopper and as a marketer. I think the days are drawing to a close and in some cases already over of where, the way to succeed on Amazon is you just load a product title with as many keywords as you can possibly dream up and shove all the important keywords at the front. It's just this nasty, impossible to read, ugly product title that the marketer in me despises. I think that's winding down a little bit.

Brett:

And I think we even had some situations and I told you about this, we're prepping offline. I bought a projector for outdoor movies and I bought it on Amazon and I was in a hurry and I bought it based on the title and based on reviews. And it ended up not being what I wanted and the title was very misleading, and I was upset. And so, I returned it and then the next big purchase I bought, I didn't buy it on Amazon because I was angry at Amazon brand.

Brett:

So I went and looked for a real brand that was in my head, a real brand that I bought it off Amazon. So I think there's this problem, right? And I'm not alone in having that problem. I think Amazon's addressing it and good sellers are addressing it. So that was a long-winded little monologue there, but what are your thoughts? What is your take on titles right now? Is there still benefit to keyword stuffing? Is that largely going away? Give us your take on title optimization.

Emma:

It's a very challenging spot, right, the title. But what's very cool is that Amazon at least right now, and I think that it's something that they'll continue, they're actually allowing you to A/B test the title now. So that's huge. That's not just trying to try a bunch of different iterations and seeing what works. You're able to get actual data that you can use to really make the title the strongest it can be, but you're trying to navigate so many things simultaneously with the title.

Emma:

So first and foremost, your title is serving as your billboard in a sense on the search page. So it's helping a customer understand what your product is and whether it matches enough of what they need to be able to click into it. So if it's so keyword stuffed that you're not even able to see that, then you're definitely missing out. And that's something that you want to avoid. It is true though, that the titled pulled some weight when it comes to ranking for keywords. So it is important. You also want to be thinking about anytime you're listing a new product, you can kind of encourage Amazon to create a canonical URL for better visibility on search engines like Google.

Emma:

And so, you want to be thoughtful about that and what words you want to put at the beginning of your title. The way that you do that is the first five words, if you offset them with a dash, then that will help to kind of encourage that. It doesn't work all the time, but it does give you a better shot at that. So thinking about, perhaps your brand name, if that's something that is a good brand name. I see that particularly with companies in the Amazon space that sometimes the brand names are just maybe something you'd rather hide away than make a prominent piece of it.

Brett:

Yeah. It's really complex. Sounds like a holding company, or it sounds like just alphabets to-

Emma:

Yeah. Just weird, right. Exactly. But-

Brett:

It's interesting. And one thing I want to just interject here really quickly is, I don't want to come across as a marketing purist or brand purist here who is like, "No, you just strip all keywords out and just be artsy." No, that's not my purpose. I'm definitely a pragmatist. We used to do a lot of SEO back in the day. I was doing all kinds of crazy stuff with SEO in the early days of Google. So I'm very much, "Okay, we still have to do what works." And if still there are considerations of putting your most important keywords at the front of your title, that's still makes sense so do it.

Brett:

And I do want to key in on one thing, just for those that maybe may went over their heads. You mentioned a canonical URL and you mentioned kind of the first five or so words separating by dashes. Can you just explain that a little bit? Does that mean that the first five words are put in the title if we separate by dashes that will become the URL which shows up kind of after the amazon.com/, et cetera, is that what you're saying?

Emma:

Yeah. So if you have those first five words, and my understanding is that a word like some of those filler words like for or and don't count towards the five word limit. And then at the end of those five words if you put a dash. So that means that all of those words are in the URL for your product, that then you can rank for on search engines. So if somebody is typing in projector for backyard and you have your brand name, maybe it's two words and then projector for backyard because this is a outdoor projector and that's really a very strong keyword for you. Then you can increase your likelihood of being found on Google, which it's really interesting. I actually wrote an article about this for Prosper Show blog recently. Where a lot of big brands, if you search them on Google, their Amazon listings are oftentimes appearing before their own websites even. That's crazy. So-

Brett:

That's crazy.

Emma:

... if you're neglecting some of those things and the power that they hold, then you're really missing out. But you also mentioned with the larger brands that are kind of maybe focused more on Google and not traditional kind of mainstream SEO and marketing. They're sometimes the biggest offenders when it comes to poorly constructed Amazon listings. So it's-

Brett:

Sure. Because they don't get it and it's an afterthought, right? And they don't realize that, hey, Amazon has such an immense domain authority and Google respects that domain authority. Yeah, your Amazon storefront, your Amazon product listings, they could outrank your own site. So you better be thinking about it.

Emma:

Yes. Definitely 100%. Did I explain the canonical URL well enough? I'm sure you have something.

Brett:

... if I interrupted you. So explain canonical. Canonical is such a great word. Those other things that we talk about related to SEO but we won't get too nerdy. So, yeah, canonical URL. So you said first five words, but words like for and you know, those don't really count. So you have an example of brand has two names for, projector for backyard, whatever. And then we got-

Emma:

Yeah. For the backyard. I don't know, let's say that that's a really important keyword for you. And it also very succinctly and clearly explains what your product is because you don't want to be choosing keywords... These are the first five words. And if you're thinking also of mobile visibility, your title might truncate it even as few as 60 characters. So you want to be thinking about what are customers actually going to be seen on any of these giving given platforms. So you don't want to just be keywords at random.

Emma:

You want to be choosing very strong keywords that are also incredibly relevant to your product because that is holding the prime spot. Those are the first words that somebody is looking at. So if you're choosing them just because they have the highest search volume or just because there's this what seemingly great opportunity and there's not a clear explanation of what your product is in there, then you may not be doing yourself any favors.

Emma:

So then in doing that, when Amazon is creating that link, then those keywords are actually in the link. And that has a lot of SEO power behind it to not just, this is talking about off of Amazon now, this is talking about on all of those search engines to be much more searchable for those words specifically so that you are ranking really highly and trying to be also driving outside traffic to your listing in an organic way.

Brett:

Yeah. It's the next level approach to listing optimization, but it's super smart. So I want to key on a couple of things you mentioned. Looking at keyword volume, but really looking for relevancy first. When run this all the time, I was talking to an SEO company recently and they were giving keyword suggestions on this project that I won't give much detail on just because it doesn't matter. But they were giving like, "Oh, hey, these are the top ranking keywords." And I kept coming back to them and saying, "Yes, but they're not relevant." These keywords are relevant? Yes, they have fewer searches, but those are going to be searches that will buy.

Brett:

Those are people that are looking for what we're selling and starting to piggyback on our projector example. We may find that in keyword research, projector for boardroom or projector for conference room or projector for whatever, those have a lot more searches. Well, it doesn't matter. If our projector is for outdoor use and for movie use, then we want to go with those keywords. So focusing on relevancy is really, really important. And one thing to think about, if you can obviously build your listings so that it ranks on Amazon, that's great. That's going to fuel clicks and sales and velocity and help you increase the ranking there. But just like you mentioned, and I'm really glad you pointed it out.

Brett:

Google sorta loves Amazon at least from a domain authority perspective. As companies, I don't know if they love each other or not. But the page rank algorithm loves Amazon. Right? So looking at, man, Amazon's got all kinds of domain authority. So your ability to potentially rank your products for searches on Google is actually quite high if you're strategic about it. And then what does that do? Well, that opens up a whole nother realm of traffic. And if you get this outside traffic coming into Amazon and combating on your listing, Amazon loves it, right? Amazon will reward that and favor your product a little bit more. So that's huge as well. Any additional comments on kind of trying to rank on Google for your Amazon listings? I know that wasn't the main here, but is it only?

Emma:

I would say, not off the top of my head. But it is something that you want to be thinking about. It is something that it just in general, and I think it kind of goes back to this topic of branding. But you want to make sure that whatever entry point a customer is having into a product page, whether that's going to your website or going to your listing because if they're searching on Google they could be searching for your brand or they could be searching for a product. But you want to make sure that you are creating a cohesive experience wherever they're interacting with you because the opposite can also happen, right?

Emma:

So you had this bad experience with a projector. So you're more likely, even if you decide that you want to go back to Amazon for your next larger product purchase, you may search on Amazon. But then you may take that search off of Amazon too, to see is this brand selling elsewhere? Do they have their own site? What are people saying? And so, that type of research is quite common. And they might end up coming back to Amazon to make their purchase, but their research is likely going to involve something beyond just staying within Amazon, especially the bigger ticket the item is.

Brett:

Yup. It's so true. I love that. And I think that's been my experiences. Now, I'm very picky about what brand I buy on Amazon. And now I'm looking to, and I still buy a lot on Amazon, way too much, but I'm looking for trusted brands. And I'm looking for more than clearly just an Amazon only brand. I'm often avoiding that. And I think there are other people doing that, too. The other thing that I think is important to underscore here is that, Amazon's largest source of traffic is Google. And Amazon is the number one, the top spender on search ads for Google, which is interesting.

Brett:

And I just only share that to say, "Hey, there's also potential for your Amazon business by thinking about Google traffic as well." So back to titles and title optimization. So give kind of a few other tips that's round out that topic and then we'll move beyond titles. What would you do to optimize a title? And what's kind of finding the balance of, yes, getting the right keywords in there and the right keywords up front but without being completely spare me or this six line keyword laden title, how do you find that balance?

Emma:

So I like to go back to being a customer on a search results page and thinking about that experience, which is especially on Amazon more so than anywhere else, you are bombarded with multiple products that look exactly the same and have the exact same photos and the exact same titles and even similar amounts of reviews. And the prices are within a few cents of each other. It's kind of somebody that suffers from choice paralysis. It is their worst nightmare. And so, if you want to start to be thinking even as early on as your title, what is your differentiator and how can you make that clear to customers from the very beginning?

Emma:

So let's either do some search selling singular. Or your product is made of a material that the others aren't or whatever it might be. If you have a key differentiator, you want to make sure that that's early on in your title so that you're already helping people understand, this is the one for me. And this is how you can separate me out from the rest of the people that are looking nearly identical. And sometimes it may not even be that the product itself is that different, but it's just a feature that you know is very important to customers that the other competitors out there are not doing a good job of communicating in a very upfront way.

Emma:

And so, it can just be difficult even to find those basic pieces of information that you would say, "Oh, yeah, that's obvious." One of the things that I see all the time is with electronics, it's really hard to get a clear sense of what they're compatible with. So if you want to buy a webcam or an external hard drive, you may really have to do some digging to figure out whether it works with Apple or PC. It's kind of a mess. And so, figuring out what those important details are and what customers really want to know and putting that in the title, and then obviously continuing that on into the rest of the content of your listing as well.

Brett:

Awesome. Any tips on the A/B testing of titles? I love that Amazon allows that. Any parameters or advice you'd give around that?

Emma:

Yeah. So it's a little new and I haven't really seen many people that have actually been using it yet. I would definitely be the most interested in testing length. So going for the much more traditional title that may not even be keyword stuff, but it's really maximizing the standard 200 character limit versus one is much more pared down, which would be brand name, clear product description. And then just any of those few key details that you would need to know somewhere that would probably end up getting you around 80 max characters. Those would be the things that I would want to be testing the most.

Emma:

But again, if you're one of those products that you don't necessarily have strong key differentiators, you could even experiment with seeing, okay, if I make this detail more prominent does that get better clicks and the right kind of traffic or if I make this one prominent? So it's also sort of a case-by-case basis of both your product specifically, but also the ecosystem that you are competing in.

Brett:

Love it. So then moving beyond the title. What should we consider next as we're looking to optimize our listings and optimize them first for Amazon rankings, but then there could be some spillover to Google rankings as well. So what comes next step for title?

Emma:

So going back to thinking in the mind of your customers. Probably if you're selling on Amazon you've also spent some time shopping on Amazon. And what is so strange to me is the fact that Amazon has is huge marketplace. And yet, the way that the product pages are set up are so clunky and they facilitate something that, if you were making your own website, you would never set up a product page in that way. You would never have these really long bullet points. So thinking in terms of a customer and their experience and setting up for maximum skimmability I think is one of the most important things that you can do for your listings.

Emma:

So understanding that we all have key buying criteria when we are trying to make a decision, and helping the customer find that information as quickly and easily as possible is incredibly important. Because for most of us if it doesn't match that criteria, we want to move on. We don't want to invest a lot of time trying to figure out if a product fits our needs and then feeling frustrated when we can't find that information, or when we realize after investing 10 minutes in deep investigation that it's not the one for us. And so-

Brett:

Yeah. And one thing I'll just kind of underscore there on the skimmability concept. I remember learning about this first when I took a copywriting course years and years ago, and we studied long form direct mail, copywriting and stuff. Was really fascinating and it taught me a lot about the psychology of selling and why people buy and stuff. But it talks about how people don't usually just read from sentence one to sentence two and all. They'll scan first, right? And this is very true with a product listing. There's scanning looking for that compatibility answer or looking for that single feature that's most important.

Brett:

So shoppers are scanning first then when they confirm that that is either a fit for their compatibility issue or their feature needs, then they'll go back and read other details. Right? So it's rare that we're going to read the first sentence of the description then go from there. We're scanning first. Once we find that key piece of information, then we'll look at some other things too, just to make sure it's really everything we wanted. But yeah, getting that skimmability is so important.

Emma:

So that means everything from being really thoughtful about how many characters you're using to even just how you're organizing your product page. So when it comes to your bullets, using some all capitalized headers is a great way to focus customers around the different points that you're making. But what it also means is that let's say you have this all cap center that clearly distinguishes that this bullet is talking about materials. That means that halfway through you shouldn't start talking about something completely unrelated. If you're saying that this is what it's about, you should clearly communicate what that's about and nothing more. So make sure that you have really and that if a word isn't there either helping you from an SEO perspective or from a pushing the sale forward perspective, it really should not be there.

Brett:

Yup. Love that. Awesome. So bullets hugely important influence ranking as well. Where do we go?

Emma:

Yeah. So then you have your description, which you have your product description if you're not brand registered. Which it's very rare these days that I see brands that aren't.

Brett:

You got to be brand registered. You just got to be able. Yeah.

Emma:

Yeah. I mean, there's just so many privileges that you get as a seller. And Amazon is only continuing to add to those. So if your product description and then you have your A+ Content, hopefully, if you are brand registered which is a great place to really start to build up that branding piece. But it's also a fantastic place to think about where imagery and text can help to communicate things more clearly than just one or the other.

Emma:

So if you have a product that may be a little bit complicated to understand, then your A+ provides you a great space to be able to hone in on some of those individual details in a way that you have the visuals with the photos and then the supporting text to help really fully communicate that. It's also fantastic for the, one of my favorite modules is the standard comparison chart. So let's say that you have a product line and-

Brett:

So it's so easily skimmable, right? And again, you're going back to what does shoppers want? They want to see that side-by-side comparison. It's visual and it's instantly clear what's being communicated. So yeah, fully agree, they're awesome.

Emma:

It's so good. And it's great for a few reasons, which Amazon does not do a job of helping customers compare one product to the other. So a lot of other sites actually do a better job of that. Where if you have a few products that you're trying to weigh against each other, you can even click on them and then it'll generate a table. Amazon doesn't do that. So that means that every product that you're contemplating, you have to open up a new window. So you're having to click back and forth to say, "Okay, this does this, this does this."

Emma:

You really do have to invest some time in trying to weigh your options. But let's say that you want to make sure that customers are only contemplating your products. Let's even say that you sell microphones and you have five different microphones that each are best for different things. Are that sort of different grades that you have the entry level, more intermediate and then the very professional most advanced product. It could be difficult to understand what the differentiators are between those different products if you're looking at them one product page, one product page, one product page.

Emma:

But when you're able to create this chart, then first of all you're making sure that they're only compering you against you. But also, you're making it much higher likelihood that people are going to be purchasing the right product for them. So you're minimizing potential for returns and you're helping just make that a much easier experience for customers. So that's the one application of it, but then you also have the ability, let's say that you have a product range of things that would go really well with that product that people would want to know about. Then it's an opportunity to actually increase that kart value and maybe get them adding a few more of your products into, along with their initial purchase. So making that upsell which is a really important ability to be able to do when you are selling anything.

Brett:

Super smart. Yeah, I love this. So a couple of questions about A+ Content. And this is something that we've been digging into more and kind of coaching clients and helping them around. And feedback I get from my Amazon team is, hey, A+ Content at one point really didn't impact rankings directly other than if it helps close the sale and you increase your sales velocity, that can impact rankings. But it seems like that's maybe shifted, A+ Content does have an impact on your rankings in a more direct way from what I'm hearing. But what's your take on A+ Content? How important is it? What does it impact? And then any tips around it?

Emma:

Yeah. So if the text in there ranks with Amazon's algorithm, that's still a big question mark that I think a lot people have that's not totally clear. Now you do have your imagery which you have the ability to include alternate image in there. So just like we were talking about with the canonical URL, that's making your images textually searchable for search engines like Google. I don't know how much that really impacts things, but it is another place that you can kind of help yourself rank a little bit better organically off of Amazon.

Emma:

But what it does is it starts to help to address this issue that you've expressed frustrations with, that I certainly have frustrations with, which is that you don't necessarily know who you're buying from when you're shopping on Amazon. But the bullets and even the images on their own are not necessarily the most natural way to try to understand what a product is, but also who the brand is and why we should trust them to be providing this solution that we're looking for. And so, your A+ Content both allows for you to present things in a way that's just more natural for customers to want to see that information. But then it also is a great space to be able to build out that story a little bit and help communicate who you are beyond just a provider of this one product in particular.

Brett:

Yeah. That's fantastic. Awesome. So any other ranking tips that you want to talk about before we kind of dive into, how do we look at branding specifically within our Amazon listing?

Emma:

I would say the tip that I have is a little, maybe we've already addressed it, but I think it's really worth considering especially when we're talking to more traditionally Amazon businesses, which is this assumption that you have to have all of the keywords in the front end of your listing. Or that there's this special rule that, your most important keywords are in your title. And then all these other keywords have to be in your first bullet. And if you put them anywhere else then you're not going to rank for them and the world is ending it. It's such a simplistic way of looking at Amazon and how their algorithm functions.

Emma:

And I think that it's almost wanting to hold onto this notion that if you just insert these words in these certain places, then you can have a multi-million dollar business. And it's not like that. Even if you have the perfect keyword strategy, if you are not setting your product page up to be able to convert, then it's all for nothing. Amazon doesn't want page visitors, they want purchases. So if you're not selling, then you're not in a rank and the way that you need to, you're not going to perform in the way that you need to. And it's kind of a lot of effort that is not going to be realized to the fullest.

Brett:

Yeah. And I'll even take that one step further, Amazon doesn't want to just make a sale. They want to delight the customer, right? They want to make sure that customer buys exactly what they want and they get exactly what they expect and that the shopping process is good. The purchase experience is good. All of that is good. And so, if you're not helping Amazon do that you're you're in trouble potentially. And so, you gave several good examples as you and I were chatting kind of pre-show about several companies that really are branding the right way on Amazon and kind of blending this all together. We'll talk about a few of those examples and kind of what they're doing and why they're such a good example.

Emma:

Yeah. One of my favorites is Black Rifle Coffee Company, which I don't know how many of you are familiar with them. They're an e-commerce coffee company and they're a veteran owned business. And so, that's a really big part of what they do and how they present themselves. And what's really interesting is that when you look at their product pages on Amazon, their listings really don't spend that much time talking about the coffee. Their listings really put a lot of emphasis on their brand in particular. And the coffee space is a very competitive space. And you also don't have a lot of different things that you can do to really differentiate yourself.

Emma:

So you have whole bean versus ground, you have where it's sourced from, if it's fair trade and the roast flavor. I mean, there's not really that many things that you're differentiating yourself when it comes to the coffee specifically. And so, if you're just trying to compete on that, you're going to be fighting really, really hard. It's going to be very difficult to gain traction. And you're most likely going to have to be competing very strongly on price and getting as many reviews as possible. Whereas what Black Rifle Coffee Company is doing, and what I think is smart, is they're actually making the conversation about something more than coffee.

Emma:

And so, they're almost creating this new category for themselves. So they are a veteran owned coffee company. Well, there are not a ton of veteran owned coffee companies out there that they're having to compete against. And so, for the people that it's really important to them to be supporting those kinds of businesses, first of all, they may not have known that an opt-in existed for them to be able to get their coffee from a veteran owned company. And they're a US based company, so that's exciting for a lot of people as well.

Emma:

And so all of those things give people an opportunity to shop from a company that aligns with their values and is part of this story that they want to be presenting to the world. Because all of the choices that we're making they're just in our house. Our reflection of how we see ourselves and how we want other people to see us. And so, it's important to understand that and to understand the kinds of people that you would ideally hope to be selling to and figure out how to communicate with them in a way that is going to make them excited about bringing you into their story.

Brett:

Yeah. I love that because there are a lot of good coffee options out there, right? And there's a lot of people, a lot of coffee drinkers that honestly could taste lots of different cups of coffee and probably not be able to tell the difference to any great degree. Right? You got your coffee snobs, the want to know about all the nodes and the origins and the blends and all that stuff, which is really interesting to me actually. But that's not most people.

Emma:

They're probably not buying their coffee on Amazon also. Because they are going to the local roaster.

Brett:

Exactly. Because they are going to the local roaster. Yeah, exactly. And so, I love this because it's good coffee, right? It's quality coffee. But it also says something where, like the brand you set out on the counter at home if you have people over, although I know that's not happening a ton right now. But the brand you set out there, just the brand you feel you want to feel good about. If people were buying Black Rifle Coffee because they want to buy from veteran owned and it aligns with their personality and their values. And yeah, I love a great example, creating a separate category, not just great tasting coffee but it's all these things tied together. So that's an awesome example. What's another one that's doing great with branding on Amazon?

Emma:

Yeah, so e.l.f. they're a makeup and skincare company. I think they are killing it on Amazon and just in general. Their marketing has really stepped up a notch. They've been around for a long time and they're a very low price makeup company. And in the early days, their quality matched their prices. So they've really invested in creating much better formulas, but what's interesting is a lot of their products are successful because they're knockoffs of much more expensive products that other brands are selling that people either don't want to spend the money on or can't afford or just aren't interested in.

Emma:

And so, e.l.f. could kind of take the approach of being the knockoff company. And there are companies that do that and they're still successful. But they somehow manage to sort of be at the knockoff company while very much capturing their own unique identity so that it's not just the place to go to search for the lower cost option, but it is a fun place that makes makeup accessible for everyone. And so, they really mean for everyone and they communicate that through the visuals that they use. They're also seem to be geared towards a little bit younger customer. And so, their language is fun. It's very current as far as the types of words that they choose. It's just very much part of this aesthetic that, if you go on YouTube and search for beauty influencers you can find a million of them.

Emma:

And it's very much tuned in with that space. And it's not just utilizing the same tired language that a lot of other drugstore brands use. Because the higher end skincare and makeup, they understand the importance of branding and all of that because that's one of the main things that they're using to help justify 3, 5, 10 times the price. And so, it's not as common to see a drugstore, or I guess high street is how they would call it in the UK, line of products that is still understanding that branding is. And so, they've gone from having unattractive packaging and really not being much of anything to really carving a space for themselves online and in shelf spaces. And I think that they're just doing an awesome job.

Brett:

Great. That's an awesome one to pay attention to. So we're running out of time which is a bummer because there's a lot more that I'd like to ask you about and more questions to dive into. But that's okay, we can save that for a part two at some point. I want you to kind of tell the story though about, and I believe this is one of your clients if you can talk about it, splash ease or SplashEZ, don't I don't remember the name.

Emma:

SplashEZ.

Brett:

Yes, SplashEZ. So talk about just kind of quickly how you guys approached that launch of this products and how kind of the listing and the branding. And how all that tied together to really create some fantastic results.

Emma:

Yeah. So SplashEZ is a product that we helped launch in 2019 and they have achieved incredible success both in the summer of 2019 and the summer of 2020 because their product is, it's a kitty pool type product. So it's obviously has some seasonality to it. But on the surface you think, "Okay, it's another kitty pool. What is there to really be competitive about?" But what helped to differentiate them actually started before they even came to us, which was they made some subtle design tweaks to their product so that it wasn't just a kitty pool, but it was a pool that has... Well, is a pool but has different printed images on the pool itself that parents can help use to create educational opportunities and child childhood development opportunities alongside being a way to cool off and be outside and not be stuck indoors.

Emma:

And so, if they were just trying to compete, similarly with Black Rifle Coffee Company, if they were just competing in the sprinklers or kitty pool-

Brett:

Very random kitty pools, yeah.

Emma:

... it's going to be a competition on price. It's going to be a competition on size. There's just not that many things you can do. When you make little adjustments to the product itself, it's creating a whole new category of outdoor play things that isn't a fully matured category yet. Of course, now they have a lot of knockoffs and competitors that have seen good a idea.

Brett:

Only takes time. It takes a little bit of success for the knockoff artists come out of the woodwork.

Emma:

Yeah, exactly. But so then we understood that, okay, if this is a pool that is creating these educational opportunities, then it's really important that we think about what type of customer is going to be most excited by that. And then what are the other details that they would want to know? So of course, things like safety are really important, even material qualities. So they don't want plastic that has BPA in it because they care about only exposing their children to and certainly starting to understand who is that customer and how can you present everything in a way that's going to engage them and make them excited about this product and make them excited about the brand as a whole.

Brett:

I love it. And really that lines up pretty well with Amazon's approach and Amazon's ethos of customer obsession, right? They want to make the customer happy. And so, if you begin even the design of your products, starting with the specific customer in mind and then you build everything else around that from looking the way you look at your keyword strategy, to the way you optimize your title and bullet points and description and your images and your videos of all the things you build around the listing, thinking about the customer.

Brett:

And thinking about what they want, what they want associate with and what they want in their home or in their backyard, or what they want their kid to be in. That's when really the magic starts to happen. So Emma, this has been fantastic. This has been a ton of fun and hopefully really educational and inspirational for folks. So if people listening say, "Man, I need to talk to Emma and need to chat with them about my business. How can they connect with you??

Emma:

Sure. So our website is marketingbyemma.com or on Facebook at Marketing by Emma. We also offer free listing analysis. So if you're not sure if your listing is doing what it should be doing, or you're just kind of scratching your head because you've tried everything and it looks great, but you don't know why it's not performing. We would be happy to give you some free feedbacks. If you just go to our website there's a banner at the top, or you can go to marketingbyemma.com/freeanalysis to fill that out and we'll get back to you.

Brett:

Awesome, marketingbyemma.com. We'll link everything in the show, notes as well. So you can check that out at omgcommerce.com and then click on podcast or just Google e-commerce evolution you'll find it. But Emma, this has been a lot of fun. Thank you for taking the time. Really, really enjoyed it.

Emma:

Thank you so much, Brett. This was a lot of fun. I can't wait to do it again.

Brett:

Awesome. And with that, as always thank you for tuning in, we would love to hear from you. Reach out to us, let us know what you'd like to hear more of. Give us some show ideas. Let's interact on the socials or via email on the site. Also, if you have not done it, hey, leave a review on iTunes. Now's the perfect time to do that. It helps other people discover the show and makes us all smile here at OMG Commerce as well. And so, with that until next time, thank you for listening.

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Episode 146

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Ken Kline - VHC Brands

Handling Adversity, Setbacks and Constant Change in eCommerce

Few eComm and wholesale businesses reach the heights that VHC Brands has reached under the leadership of Ken Kline.

Few eComm and wholesale businesses reach the heights that VHC Brands has reached under the leadership of Ken Kline. You’ve maybe seen their home decor products in big retailers like Home Depot, Bed Bath and Beyond or online at Wayfair, Amazon and many more.

Also, few eComm businesses have faced the setbacks that Ken and team have faced. From a fire that completely destroyed their inventory in the mid 2000s to COVID wrecking their in-store retail plans in 2020 - they’ve faced some crazy times and come out stronger.

Here’s a look at what we cover:

Why over communicating is the secret to vendor, investor and employee relationships.
How they overcame a warehouse fire that likely would have destroyed most businesses (Plus the story of Ken’s Winston Churchill painting that miraculously survived the fire).
How to relay your road map to your team, make adjustments and celebrate along the way (even when things are bleak).
How to take initiative to help your retail partners in selling more of your stuff.
How to inspire and empower your team when challenging times hit.

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Mentioned in this interview:

Wayfair‍

Overstock

Houzz

Jack Welch

Ken Kline - Chief Dreamer, Founding Co-Owner and CEO at VHC Brands

Via LinkedIn ‍

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Episode Transcript

Brett:

Well, hello and welcome to another edition of the E-Commerce Evolution podcast. I'm your host, Brett Curry, CEO of OMG Commerce. I am super excited about today's episode and my guest today. I don't know about you, but I learn best from stories. I like to hear how people did things, why they did things. I love biographies. I love biopics, I think that's the word. Biopics, whatever. I love movies that are about people who have done amazing things. Today, you're going to get the inside scoop from a very successful e-commerce entrepreneur, entrepreneur in general.

Brett:

I'm delighted to welcome and introduce my guest today, Mr. Ken Kline. I love this title, Ken is the Chief Dreamer. He's also a founding co-owner of VHC Brands. Full disclosure, he is a client of OMG Commerce. We get to work together, which is fun, and that allows us to see the inner workings and to chat with him on a regular basis. Really, he and his parents started this company in the early to mid-90s and it has exploded. You're going to get to hear some of that success. A couple of really interesting things about Ken that I want to share before we dive in and before I let him actually contribute here too is, one, he did graduate from Pepperdine University which is in Malibu, California, one of my favorite spots to visit. I love Southern California. I'm a wannabe surfer, so Malibu is a great spot.

Brett:

He was an English major. So, we found that Ken's style of communication is very creative, and interesting, and fun. Maybe the most fun client to exchange emails with because it's like reading beautiful prose when you read Ken's emails. He is also a brilliant chef, and has taught me a thing or two about fine wine and about good quality food and plating, and things like that. So with that intro, Ken, man welcome to the show and thanks for taking the time.

Ken:

Well, thank you. That was quite an intro, Brett. Are we done now? That was awesome?

Brett:

Yeah

Ken:

I love it.

Brett:

..inspired.

Ken:

I feel great. Thanks.

Brett:

That's beautiful. In all seriousness, you're a creative guy and I think that plays into your ability to run an awesome company. Just really quickly, I think this will give people the flavor, and no real pun intended, although I guess so, you like to cook. So, talk to me quickly about what you like to cook, because I think is fascinating. You taught me this. We had dinner at your house not long ago, and you taught me about plating. Plating the food for your guests. What is that, and why is that important?

Ken:

It's a great question, thank you. I do cook to relax, and I do cook because in the back of my mind I'm thinking on CEO things or entrepreneurial things, but I'm not thinking them on the front plate. I'm thinking them on the back plate. It's like people that mow the lawn or go for walks, which I go for long walks also, it's just a way for me to kind of unwind and to exercise a completely different part of my brain, but I also have a passion for it so I just really enjoy it. It seriously allows me to turn off that part of my head that wants to think about e-commerce or think about logistics, or think about management or HR. It just totally allows me to switch gears.

Brett:

Probably some of your best ideas come to the surface when you're cooking, or at least gives you the release for those good ideas to come later.

Ken:

Yeah, I think that's true. I think it gives me, I can only speak for myself, it gives me a buffer where I've rested that part of my brain and things bubble up and I feel refreshed. Which, my wife would say, "I feel like you just worked a lot." I say, "No, I feel completely energized," which is kind of cool. I can stand in the kitchen eight to 10 hours at a time and not even realize it.

Brett:

Wow.

Ken:

Which that's kind of ridiculous, but I do that.

Brett:

Yeah, but the end result of that is a magnificent thing. Talk to us about this idea of plating and why you think it's so important. I think there's a couple of business lessons, and also it's just a fun way to start too.

Ken:

Yeah. Yeah. I'm really big on the presentation. I think that the presentation... First of all, people start with saying "Wow, this looks really good." When they say that, you've already opened them up for a really engaging experience. The idea there is to say, "Look, it's visually very appealing." For most normal people, that ends up being a function of the overall enjoyment. It's not something to your point that people think about. They didn't necessarily articulate that on their agenda of a great meal.

Ken:

If you go to any great restaurant and you watch any vlogs on cooking or whatever, any great chef, and I'm not supposing that I am, but any great chef is going to present the product extremely well. That's part of the review. I think of it as I am having people over for dinner. They may be close friends. They may be business associates. They may be family. But I'm going to treat them the same in terms of the experience that way. I like to do that for people. I like to see the expressions on their face. I like to see how they react. I like the questions that they ask.

Ken:

I really enjoy picking fresh herbs and placing them around the plate, or dusting it with a little bit of something maybe that's not in the dish but kind of compliments it really well. The plating part is... I actually, for example, you can take something like a risotto, but instead of just plopping it there where it looks like kind of a puck of goo or whatever, if you take a cup that holds a cup of water or a cup of flour, I tend to use those kinds of instruments quite a bit as well as melon ballers, the ice cream scoops.

Ken:

I use all kinds of things that give me nice shapes. So, just take the example of the risotto. You have a risotto that's relatively sticky, and then I spray the inside of the cup with olive oil spray and then I put the risotto in there, and then I put the plate on top of it and then turn it... It's upside down and then I turn it right side up, so the risotto would be like, for example, in the middle, but it would have a very nice shape. Then very simply, you just put a sprig of rosemary or a sprig or parsley, or I chop up some fresh chives or whatever.

Ken:

You've already elevated it. You haven't really done anything differently. I think the fun part, Brett, the consistent thing would be I will put something like that in the middle, not what we call the entrée/main course which is the meat in Western... In Western cooking,..

Brett:

Yeah.

Ken:

I tend to come at that a little bit differently, and it's really more about the artistry of it and the presentation. It's just fun. It's just something I've done over the past 25 years plus, really the past 20 years. That's just how I do it for that effect. Like I said, it's just a lot of fun. It's fun to me.

Brett:

I love it. What I think it does, and I think the lesson that the tie in this has... Well one, I think you're probably making people hungry so people are hitting pause and going to their favorite restaurant or whatever, or turning on The Cooking Channel or something. Or, this is like The Cooking Channel right this second. I think what's really applicable to e-commerce and the business is you care about the details and you understand that presentation, both the look of the food, but also the way it's delivered to the guests in the way they're going to consume it, all plays a big part in their enjoyment and their satisfaction.

Brett:

The same is true for e-commerce businesses, right? Packaging, the landing page experience, the checkout experience. All these little things that we may think of just being functional, utilitarian, that leads to the experience. If you put a little care, a little attention into it, you can make that a "wow" experience as well, which makes... I think you could argue it makes the food taste better. In this case, maybe it makes the experience up front will make someone enjoy the product better once they actually get it and things like that.

Brett:

It was fascinating to watch you in action on that. I appreciate you letting us take that little detour. Let's do this, tell people what VHC Brands is, what kind of products you offer. Tell us kind of the quick origin story of the business.

Ken:

Sure. We're an import distribution company for home textiles. We design all of our own product. It's all our own private label: VHC Brands, and then some sub-brands that we have depending on the look and lifestyle of the product. It's all home textiles, so think in terms of bedding, pillows, Christmas décor, Trim-A-Home, a lot of window treatment, a lot of rugs. It's all tactile, and it's all fabric, and it's all fiber or fabric. That's the business we've been in for 25 years. We started in 1995, as you said, so our 25th anniversary was this past July 9th.

Brett:

Congrats.

Ken:

Yeah, thank you. It's a family business. I founded it with my parents proverbially on their kitchen table. My dad retired very young from a Fortune 500 job that he had had his entire career at one company. He started low and ended very high, and then retired kind of young. He was pretty bored, so they had this idea for a business and they didn't want to grow it, and they didn't know what they wanted to do. None of us knew anything about textiles, and certainly nothing about importing. None of us had actually run a business. My dad worked at a large company, and I was out of college.

Ken:

We put our heads together and I said, "Lets kind of do this business," and they supported me wanting to kind of start a business. That's kind of how it started. We did that, and we started buying liquidations and cancellations from large textile importers that were getting left hanging by mass retailers. So, like JC Penny or another mass retailer would order several containers of a product and then cancel the last two. We developed a business model around soaking those up and then reselling those to smaller retailers as a kind of a go-between.

Ken:

It was an interesting model, kind of a strange model, this arbitrage kind of model. It was really strange. It was scalable up to a point, but then we found that we couldn't continue to scale it because the unpredictability of the supply chain.

Brett:

Yeah, yeah and inventory is so unpredictable in that arbitrage environment, right?

Ken:

Yeah. If it's a good year, everyone had a great Christmas, there's not that much inventory to buy that got canceled or whatever. That was the other problem. Then we switched over to designing product with importers, mostly China, then we switched over to just going to China and doing it ourselves with the factories. Then we established an office in China. Along the way, we also established an office in India, which now is the office we have. We don't have the China office anymore.

Ken:

So, we morphed over from being a liquidator and re-marketer to designing our own product, to working as a direct importer, and then we shift kind of upscale. There's a whole ecosystem in India for home textiles on the level of say a Pottery Barn or a Ralph Lauren that's kind of our niche, which is very different than say something that's $12.99at TJ Maxx or whatever. It's a very different deal. We kind of evolved the company, or changed the company over time to the current model as far as product and then we switched over from being a wholesaler to selling to small retailers.

Ken:

Then we started adding mass retailers. Then we started adding private label for retailers, which is still a big part of our business. Then we added e-commerce, and now we're switching over to a direct-to-consumer centric model on major marketplaces, along with having major business with some of the two rated closed loop marketplaces like the Wayfairs, and the Overstocks, Houzz.com. These are not opensource marketplaces in the way that Amazon is kind of uploaded in fee. Kind of. That's an over-simplification.

Ken:

You can't just go out to Wayfair and upload your product and hope somebody notices it. We've operated in that sphere for a while in terms of wholesale because it was a natural extension of selling at wholesale to retailers. That's the business that we've been in longer, but then we jumped into the direct-to-consumer, and we had a three year game plan that we accelerated approximately 18/19 months into the current year as opposed to 2021 because of COVID.

Ken:

So it's really been this transformation, but the common thread has been the product and kind of scaling the product, and scaling the ..

Brett:

Yeah, and I love how you took that progression. You did the arbitrage thing to figure how the business, I'm going to simplify a little bit, but you did that to kind of figure out the game and figure out how do we find other retailers to sell this product too. Then you realized, we need something predictable. We want to build a real brand here. And so you started developing your own goods. I love that you are multichannel, and you do that so well. I think this speaks to kind of your superpower, which we'll talk about in a little bit and talk about how you've adjusted to the pandemic and this other crisis that I think people would be really interested to hear about which we'll dive into in a minute.

Brett:

You've been very good at wholesale distribution to retail, and e-commerce, and now marketplaces and a variety of things. I want to key in on something for just a minute, because I think this will be either new to people listening, or people listening are considering doing this. So, your insights will be useful. You were telling me as we were kind of chatting offline, thinking about if you're selling to a big box retailer or any retailer for that matter, thinking how as a vendor, how do we support the retailer? How do we make this successful?

Brett:

Can you share just any tips, any insights on hey, as a wholesaler selling to retailers, how do we make the retailer's life easier and how do we position things for success?

Ken:

I know it'll sound self-serving, but in terms of e-commerce there's a lot of things you can do to manage a retail partnership with a mass retailer at the top of your game for your particular product or industry that frankly a lot of that got blown out of the water with COVID that's just different now. Like doing a great job at trade shows, or really engaging with the buyer team, or trying to present a nice roster of product in an environment that the buyer feels comfortable with. A lot of this is just-

Brett:

Yeah, it is gone now. Yeah.

Ken:

Yeah, it's just gone. I know with regard to selling on an e-commerce curated marketplace, you really have to really focus a lot on content and that is something that a lot of wholesalers, the challenge for them mentally has been, "Hey, I'm not the retailer, so that's not my job. That's your job. My job is to get it to you." We used to sell to Dillard's in physical stores. They had a home department, and we used to sell top of that to Dillard's under their private label. You think of Dillard's as a big mass retailer, and they are still, and so our job was basically design the product and get it physically to their giant distribution center. Then we'd wipe our hands and our job's done. That's how you think of it.

Ken:

In this new environment, that's not where it stops. You're almost completely responsible for the end user experience in terms of content and the level of content, and the amount of content whether it's the video, the imagery, the written content, the SEO-driven content, that's an extension of your product. You don't have a physical product and then somebody else does all that work. Now, you do all that work. A lot of wholesalers, they've had a hard time... I think in COVID, a lot of them are waking up to this that, "Oh my gosh, my content is terrible and I've got to actually write content, and I got to get up to speed on this."

Ken:

The best suppliers for say an Overstock or a Wayfair figured this out years ago, that it's not Wayfair's problem, it's -

Brett:

Wayfair's just the platform, right? Wayfair is just the platform-

Ken:

Right. Right.

Brett:

And the source of traffic, but you have to be in charge of the selling, and the positioning, and the content, and all that.

Ken:

Yeah, and you also have to responsible for refreshing it, because algorithms across the landscape, it doesn't matter if we're selling wholesale to Home Depot or wholesale to Wayfair, or we're selling direct-to-consumer on Amazon, it doesn't matter. All algorithms... In my experience, I'm going to get out of my .. I'll just say this one thing, all these algorithms appear to recognize newness as good. They all recognize that, which is really cool. So, if you're constantly tweaking it, it may not move the dial for that specific skew or product ensemble, but more often than not you'd be surprised that the Wayfair handler, I call our handler, our account manager or whatever, say "Hey, we really appreciate that you guys do that."

Ken:

So, when you guys have something to say, we're going to listen. I think just managing... As much as you can contemplate to manage and take control of, to position yourself the best on the digital shelf, you need to have that accountability in your mind that that's on you. It's not on them as the "mass retailer". Effectively, you're the mass retailer on the mass retailer, if that makes sense.

Brett:

Yeah, I love it. This reminds me of a book that I just absolutely love. It's called Extreme Ownership by a guy named Jocko Willink, and he was the leader of the Special Forces, the Navy SEAL team in Iraq back in 2006/2005. He talks about how really think about that everything depends on you. You're responsible for all of it. Of course, because pulling your team, and you end up maybe not doing all the work, but it's all... You're responsible. Extreme Ownership. I'm not going to leave my success in the hands of the platform, whatever retail buyer or something like that. I'm going to do everything I can to make their job easier, to make my product discoverable, to give the algorithm what it wants, to give my customer what they want. Take extreme ownership in this, because if you don't you're going to get beat by people that are willing to do that.

Ken:

Yes. Yes, 100% agree.

Brett:

Yep, awesome. Let's do a couple of things. I know you kind of laid out your product line and you also talked about just how things are changing rapidly. Now that we're in the midst of COVID, the holiday season is going to be interesting, and who knows what the future holds. I think the current environment and likely what we should expect for the next several years, is just more uncertainty. So, the ability to navigate uncertainty.

Brett:

I want to back up the clock a little bit and let you tell the story that I think will one, be fascinating and inspiring. Then we can also kind of tie this into COVID as well. One thing about your product, and this will seem like an odd segue, but your products are flammable. Do you want to talk about the event that really probably would have crippled and/or ruined lots of other businesses? Talk about that event, and then we'll kind of unpack how you came out of it.

Ken:

Sure. Sure. We've been in business 25 years, which statistically is longer than most businesses.

Brett:

Absolutely.

Ken:

That's a milestone, and that's been a lot of fun. It's not been all fun, but it's been a lot of fun.

Brett:

.. to put it, it's not all fun, but it's a lot of fun. Yeah.

Ken:

It's not all fun. Definitely, you wake up and look in the mirror and it's either successful because of you or it's a disaster because of you. I enjoy that kind of accountability at that level. There's been four major disruptions and/or pivots in the life of the company. I'm not going to deep dive, but the first one... We were founded in 1995. We were really hitting our stride in 2000 when 9/11 happened.

Brett:

Yeah. Yeah.

Ken:

Yeah, and I know that sounds like ancient history because I listen to a lot of podcasts be like, "I've been doing this forever." "How long?" "Half a decade." I'm like, wow, half a decade is like... You've been doing it as long as I've had rescue dog..

Brett:

Exactly, yeah.

Ken:

My dog is not that old. 2000 was like a major disruption where it felt like the world stopped.

Brett:

It did. It did. It did blew up the advertising world and I was selling radio at the time. It changed everything there for a little while.

Ken:

Yeah, so there was that short deep recession because everyone was like... To your point, there's a paradigm shift now. Okay, there's evil in the world that specifically is going to rough us up pretty bad. Okay, we really didn't know that. No. No. Next one was the fourth quarter of 2008 through 2009 was brutal. I mean, the beginning of The Great Recession, I remember the day, and it ended up being the same day that the Federal Reserve said the recession started, November 14th.

Ken:

I was walking around in the warehouse in the distribution center because our offices were attached to that. I go out there for a little mental break and walk around and see how everyone's doing. I came back in, I told my dad, I said, "You know, does this just not feel like fourth quarter to you for some strange reason?" He goes, "Yeah, it feels white." I'm not kidding, between November 14th and April 2009, six months later, the bottom had dropped out of everything. It was like retailers canceling orders, buyers being fired because the revenue had dropped so much. I mean, I had people tell me -

Brett:

It was nuts.

Ken:

It was totally nuts. There was this scary... It was like just dropping. So, addressing that new reality of this is the new level of where we are, our business dropped about 25 or 27% over a six month period, and it just dropped. You're not prepared for that. You're prepared to go the other way as an entrepreneur. You get up every day and you're optimistic, or you wouldn't be in this business.

Brett:

Absolutely.

Ken:

So, there was that. That was that. Then dealing around that and kind of pivoting through that, that changed the wholesale marketplace, how wholesale worked. That changed trade shows. That was the beginning of the consolidation that now I think COVID has really put some stuff on it's last leg. The next big one, obviously the one you want to drill down on is, we had a massive fire in October 2016. Massive on the scale of I had to deal with a State Fire Marshal in Missouri because it was a huge fire. We had a 36,000 square foot building that had two levels, so it was more like 42,000 square feet.

Ken:

We had offices. We had just completed a massive new corporate national show room literally 30 days earlier. We had tons of inventory heading into fourth quarter, and we had a big building. So yes, all of our product is textile, wrapped in plastic. And it's cotton, and has a lot of cotton batting. That destroyed 75% of our inventory, our brand new showroom, all of our corporate offices, everything we had, our server room was melted. The fire started on the afternoon of the 13th right when we closed that day, and it didn't stop burning for 10 days. It's intensity that evening was 1,800 degrees.

Brett:

That's hard to fathom.

Ken:

Yeah.

Brett:

That starts to melt steel and stuff, right?

Ken:

It literally did melt the giant steel building. What was happening was the steel garters and all these racks that you put product on, the forklifts blew up, and all the servers melted. It was a war zone. It looked terrible. But the building literally melted in on itself and there was so much concentrated activity in the product itself that they couldn't put the fire out. They just had to let it burn. They put a bunch of water on it, but there's only so much you can do. It really was this thing that, if I could show you pictures I'll send you some, but it was this thing that where you look at it, you're not just looking at a fire. You're looking at... It looked like a bomb went off.

Brett:

Yeah. Yeah.

Ken:

It was this crazy thing. I was out having sushi and just kind of celebrating the kickoff to a really strong fall wholesale season. We were running and gunning. We were having a fantastic year with Wayfair. That was our first big Christmas season, and fourth quarter with Wayfair we were gearing up for. At the time, we also had Groupon. We had some other things we were doing. So, we were totally gearing up for this massive great fall. The economy was growing, things were good. I was out at sushi with some good friends of mine in the economic development realm, regionally here, and I got a phone call. "Hey Ken, your building's on fire." I thought-

Brett:

What?

Ken:

"What? I have a fire alarm." Well, that didn't mean anything, unfortunately. By the time I got there, the building was blazing. It was already like 1,200 degrees. You're talking about a 42,000 square foot building that you're watching being obliterated in front of you.

Brett:

That would have had to been a totally surreal moment, right? It is business and not your home with people. God forbid, that would be a mess. That'd be unspeakable. But still, this is your business. You poured your heart and soul into this, and you're cranking, and you've gone through other problems. It's just things are happening and now you literally see it in flames. That would have had to have been totally surreal.

Ken:

It was. The interesting thing about it was, we started triaging in the parking lot with the fire blazing behind us actually. Yeah, that was interesting because like I said, I was at dinner with some close friends and the President of the Chamber of Commerce came out and he said, "Ken, we're starting to help right now," while the fire's happening, "We're going to start thinking about what we're going to do." We worked overnight on things to do. So literally Brett, the fire was October 13th, which is a Thursday evening. We had another small warehouse next door which is not connected. It's 25 feet away, so it didn't get burned. The funny thing is, that was all the inventory that's slower, so we put it the farthest away from the shipping place. So, we still had all of our slowest inventory that we didn't-

Brett:

The stuff nobody wants. We know all that, yeah.

Ken:

The stuff that nobody wants is in warehouse number two, and all the stuff that everybody wants is now gone. But literally, I had a meeting the next morning. I pulled the entire staff together at the... My staff, we met at Branson Chamber of Commerce 8:00 AM the next morning. I'd been up all night because the fire never went out. I said, "Guys, we're down but we're not out. We're beat but we're not broke. We're going to get through this."

Ken:

We literally opened a new office in Branson. The next Monday morning, my team for IT, they just really showed their superpowers because they came to the... We completely set up a whole new office and migrated over the weekend. So, we started taking phone calls and started taking orders on the 25% of inventory we still had. It put it e-blast and said, "Hey, we had a massive fire so that's a problem, but we're open for business and taking orders." Then we immediately started retrofitting the small warehouse for shipping and we were up and shipping 10 days later.

Brett:

That's impressive. So impressive.

Ken:

Yeah, and my whole team, really there's two things here Brett as far as lessons, like corporate life lessons. One is, I've got a pretty deep bench of team members that have been with me a long time. That DNA was there. So, team members that really... Like we're not missing a beat. We feel pretty beat up, but we're not missing a beat. Secondly, all of our systems and everything was already in the cloud. We had migrated everything over to the cloud about a year or two earlier.

Ken:

So literally up to the minute, invoicing financials, whatever records we had. We knew what we shipped that day. We knew what had not shipped and what's still sitting on docks that didn't go. There was that whole deal. One of the big takeaway lessons is, look, this is a part of your life but it does not define you. It's a lesson to be learned. It's a massive lesson to be learned, but it doesn't define you. There're things we can do, but immediately, believe me, this was one of the biggest fires of the month nationally. That's how insurance adjusters talk about this.

Ken:

They didn't just send the guy. They sent the guy from Chicago that's head of giant disasters regionally, talking to this guy, talking to the State Fire Marshal. They've got some pretty serious questions for Ken Kline because-

Brett:

Sure. Sure.

Ken:

What's in your building with all of those textiles that burnt down? What's the deal?

Brett:

Questions related to potential fraud or something. Something of that magnitude, you get all kinds of crazy questions I'm sure.

Ken:

Yeah, exactly. It turns out that we had installed video monitoring throughout the building prior to the fire, not just prior, but as part as security and just employee monitoring because we had a little bit of theft in the warehouse with some employees, unfortunately. So, we started monitoring outflow and workflow and things like that. We could pinpoint where the fire came from. What it was, and this is a very sad story, what it was, was we had hired a guy to do a little bit of remodeling for us. We decided to put new shelves in our conference room to merchandise product when buyers came in for small showings.

Ken:

We picked out a stain. So, we were just staining the wood and then we were going to hang it. A modern look. Well, every day he came in and he did the staining, and he cleaned everything up. He was super, super, super tidy. But one day, the last day, he was tired. He wadded up his stain rag and instead of dipping it in water and taking it out, he absentmindedly threw it in the trash. This is on video. Then that flame, two hours later when we closed, just started coming up out of the trash.

Ken:

It was also coincidentally a day that the warehouse crew didn't dispose of all of the trash, which was SOP. The one day that that trash can was filled up with wipes and stuff and hand towels, was the same day that he absentmindedly, and I accidentally threw that in there, and it literally started flaming up. Then from there, it shot across the roof and the whole thing was like poof.

Brett:

A couple of things I want to mention here. One, we're all going to face situations like that, not to that severity and hopefully not massive fires, but we'll have these potentially business-altering events. COVID is one of them, and we'll talk about in a minute. If you are lucky enough to be in business any length of time, you're going to have situations like this that bring you to your knees, maybe even just mentally or whatever, but that you have to work through.

Brett:

On the other side, you could come out stronger and better, or it could destroy you. A couple of things you said that I thought was really powerful, you mentioned that this mentality was already in your DNA, that you were getting the office put together over the weekend, you were making phone calls or taking phone calls that next Monday. You're back in business. I think that is key. You got to build your culture, and it starts with you as the business leader. You got to build that culture to say "We're going to be ready for anything as much as possible. We're not going down easily." You got to have that in your DNA because you can't wait for a crisis for things like that to come out.

Brett:

It's got to be in your DNA pre-crisis in my opinion.

Ken:

Yeah.

Brett:

Yeah. Do you have something you want to say on that?

Ken:

Yeah, I agree. I think that part of the deal is... One of the points I was going to make is what's the business lesson for the listeners and other business owners and entrepreneurs? One of the big rock, rock business lessons out of this is first of all, be present and over-communicate, and over-communicate that there is a plan and we're moving forward. If that's your choice. That was my choice that we're going to overcome this and we're going to move forward. There's a basket of stakeholders that I had to treat as if they were investors, so to speak.

Ken:

Now, I had the insurance company on the hook for almost $10 million. I really cultivated a strong relationship with the head insurance adjuster from day one. Literally from day one, I was walking him through the building and it was still smoking. I was walking him through the financials. I was walking him through the inventory levels. I was walking him through the basic operations from memory. I'm going to treat you as a partner in this, not as an enemy in this. You're my partner in this.

Ken:

Yeah. Same thing with the Fire Marshal, same thing with the investigators. Listen, we're partnering in this discovery. I'm just as curious as you what happened. So, let's get to the bottom of this. Then I really tried to be a better leader for my team of employees and saying, "Listen, first of all, everyone has a job. Your job-" recognize this, which applies to COVID by the way. Hey, one week after COVID hit there was a roster of employees that had a very different job. I said, "You better check what you thought your job was, because your job just changed."

Brett:

"You'll have a job, and that's great to lead with that, but your job is changing."

Ken:

Yeah. Yeah. There's two things. "Everyone in this room, all of us here gathered post-fire in this conference room in the Chamber of Commerce, you all have a job that's full-time, but it's going to be different. Here is what I'm assigning you. Here's what I'm assigning you. Here's what I'm assigning you. And here's what I'm assigning you. Now let's go. This is what we're going to do." My job as CEO just changed because now I have to over-communicate with the insurance company. I have to over-communicate with my bank. I have to over-communicate with my vendors in India.

Ken:

There is a level of... Part of if you're going to accept the mantle of leadership, you have to accept this idea Brett. I'm a big believer that you better be a communicator. You better be a communicator. That's not an option. You better over-communicate. I don't-

Brett:

Over-communicate, 100%.

Ken:

Yeah. That was really the deal, like how do I make this path very smooth for everyone where... I learned this lesson from my dad, because he went from working a low level desk job all the way to reporting to the Chairman of the Board of a publicly traded company and running the... He ran the stockholder meetings, and he ran the Board of Directors meetings, my dad did. He was not on the Board, but he ran them as one of the Chief of Financials.

Ken:

He told me, "No surprises from major stakeholders. Just remember that as a lesson, you should never surprise anyone. That means early distant warnings on problems. If earnings are going to be off, early distant warning." I've had my bank tell me more than one time, I've got a fantastic bank out of Springfield that's a big regional bank, they said, "Ken, you probably communicate more than the average publicly traded company. Nevermind the fact that you're a family-owned business with just a bank. You really try to give us the full story. We never have a question because it's laid out."

Ken:

I think that's just so, and I don't want to over-emphasize that, but it's just so important to do that because what you're doing is you're filling in a lot of gaps. People are afraid to ask. They don't know what to ask. They don't know how to articulate what to ask. So, you're filling in a lot of that vacuum for people, which to me is a kind of a style of leadership. I don't know if that makes sense, but that ties into being an English major and messing around in Pepperdine.

Brett:

It does, but it's so important. I love that early distant warnings, like if you see rumblings then communicate with your stakeholders, then communicate early and often with employees, and over-communicate. That brings trust and it helps people feel like a partner. They feel vested. Then they want to stand with you and fight through the difficult times. It's so important. It does take work, but I think in the end it makes things smoother and easier. So, it's totally worth the investment to over-communicate.

Brett:

Any other, and I know we could talk much longer on the fire. There's probably questions people have about it like, how did you survive? Because the rebuilding process, just having the right mindset and rebuilding your office that's one thing, but getting vendors, retailers to trust you, getting all that to happen. Major uphill battle. Any other takeaways from that? Then I want to transition to COVID here in just a second.

Ken:

Yeah, I think tied to over-communicate or attempt to over-communicate, is focus on where you're going. I think if you can visualize first of all for yourself, and then give that vision to other people that "Hey, the exciting thing about this guys, is we don't have a warehouse, but we're going to have a brand new warehouse in eight months. The exciting thing is this allows us to rethink some of the things we were doing that we... It's an opportunity to redraw the map. It's an opportunity to layout the warehouse more effectively. It's an opportunity to re-up on some new equipment we probably needed."

Ken:

So, if you try to put a positive spin on things and focus on where you're going, and kind of give that "There's a road map. I have a road map. I'm a communicating road map, and I'm asking you to be part of the road map." That's kind of the idea, which is kind of like the over-communicate but a little bit different because there's an end game here. There's a goal in mind. Like Jack Welch said, who's now discredited but he said a lot of great things, "Look, and celebrate along the way. Hey, the red iron's up. Yay. Hey, we're receiving our first inventory post-fire. Yay. Hey, we're opening our new so and so," whatever, "Our new forklift got delivered. Exciting."

Ken:

Those sound like dumb things, but in business, when you work all day with people and you spend 40+ hours a week with them, you got to kind of talk about that kind of stuff.

Brett:

Yep. Yep. You want to celebrate those milestones, and it feels like progress. I think people can endure a lot if they feel like they're making progress. Celebrating those milestones really allows you to do that, which is super powerful. It's so interesting how well this ties into COVID, but I want to talk about you guys were selling in a lot of brick and mortar stores. You kind of alluded to that. You had started selling in some marketplaces like Wayfair and others, but talk about some of the shifts you guys had to make in the early days of COVID.

Ken:

Okay, so it's very similar to the fire. It's very interesting because first of all, for just broad philosophical comparisons, one was a disaster on a very personal level that could have taken our business out. The COVID is similar, but millions of people are kind of experiencing... Millions of businesses experiencing all this unknown and turbulence together. What's interesting is the idea that "Hey, this is a very turbulent fluid environment, and we probably are going to have to pivot and do some things differently. So, let's just be mindful that we're going to have to be open-minded about this, guys."

Ken:

I can tell you what we did post-fire was, we sold to a lot of retailers that couldn't toggle on and off, or just run with it on autopilot like Wayfair, or Overstock, or whoever. So, we leaned heavily into e-commerce post-fire because it was up to us to have the listing correct as opposed to talk to a buyer that "Hey, I don't know if you're stable because you went through a big fire. I don't know if I feel good about a vendor that-" I mean, there was those conversations that we had to say, "Wait a minute, the Wayfairs and the Overstocks, and the Zuillillies are really agnostic as to what inventory we don't have. They just care about the inventory we do have."

Brett:

Exactly. Exactly.

Ken:

We pivoted heavy into wholesale e-commerce. We were leaning into it, but we pivoted very heavily post-fire. The parallel here with COVID is, now we've built up those relationships over the past five years on a wholesale level. We're doing a lot of that, and we're very happy with that channel of business. It's quite large between the Wayfairs, and the Overstocks and all that. But then COVID, we pivoted immediately. Starting in March, I took a bunch of staffers, probably 25% of our staff, and I said, "Look guys, you're going to have a new job starting in April. March was an absolute disaster. Revenue dropped 55%-"

Brett:

Crazy.

Ken:

Oh, it was like a jumbo jet. It was just... I said, "Guys, we're going to completely pivot to our plan for direct-to-consumer. We're going to completely overhaul our eBay and Amazon stores. We're going to upgrade our stores. Plus, I'm assigning 12 staffers full-time to this job now. Your job is now direct-to-consumer retail support: content, images, videos, scrubbing the deck, whatever. This is what we're doing starting now. Starting this week. That's what we're starting to do right now. Heavy pivot, guys. So, forget what you thought you were going to do this month. Forget what you thought you were going to do this quarter. It's a heavy pivot. The ship is pivoting." That was a very similar talk. By the way, the cool thing Brett, the cool thing is how many employees I have that remember that same talk.

Brett:

Yeah. Yeah, and I'm sure they love it. That's something they will remember forever: you giving that talk, and then the way they responded to it. They'll remember that forever.

Ken:

The other thing is kind of cool. It was kind of like a Marvel cinematic moment where we're like, "We've been here before, guys. It sucks that we've been here before. It sucks that there is a giant fire-breathing dragon in front of us, but we're going to win."

Brett:

Yep. Yep, and it just pulls something out of you that just normal everyday activity doesn't. Yeah, you guys have done so well. I think what's interesting, this ties to both The Great Recession back 2008 and '09, '10, and then the fire, and then COVID is, you were starting to lay the groundwork for things. You were looking ahead, visionary, thinking about what's coming in the future. You've been laying some groundwork for things. You also had this DNA built into the company. They will do whatever. "We're never going to quit. Never going to give up," which reminds me of the Winston Churchill story.

Brett:

We'll maybe wrap up with that, that'll be kind of fun. You've got this DNA and you're laying the groundwork. Then when the stuff hits the fan, you're ready. You're ready to do a hard and fast pivot and just go much, much quicker on that groundwork you were already laying. I think there's a lesson there too of be looking ahead and begin planning. You had already transitioned to retail or to e-commerce quite a bit, and I'm sure that made it way easier than to go full speed into e-commerce post-COVID.

Ken:

Yeah, absolutely. No, exactly. That's the thing. I think here's the deal, I think sometimes people, maybe a lower level of business, I know I talk to people that don't have businesses as large as ours and I talk to a lot of CEOs that are kind of mentors to me that have businesses at much greater scale that they have been direct-to-consumer or have been exclusively direct-to-consumer for a much longer time. I know talking to people with smaller businesses, there's a lot of confusion around having a plan and that plan may not go perfectly. That doesn't mean you just sit it out in reality.

Ken:

The point is, you had a plan. You didn't have to adjust. We already had a plan. We just had to pivot and move some of the parts around and the timing, but we had a plan. Here is the deal. This is, I'm going to give you one quick example. My go-to who's on the calls weekly with OMG, Lindsay, for our product development, she's the head of our product development under myself and my wife, Julie. We book ended content management last year onto if we were going to launch a product two years ago, part of the product development cycle is the end of that..

Ken:

Physically, once we go into production, the final phase of your job is to make sure we're drafting the content and getting the imagery , right? So, we just added that to the product development cycle. I told Lindsay, I said, "Lindsay, COVID's going to be bad for at least six months. We're not developing a bunch of new product. We don't need a spring launch based on how things are going. Your entire job is content overhaul now until further notice. And, I'm assigning all these people under you. So, we don't need to worry about launching a bunch of new product in this wacky retail environment, but we need to worry about a complete overhaul of all of our content. So, that's really kind of your job."

Ken:

I took other people and gave them their job that, "Look, your job's adjusting. I don't know if it's three months, six months or nine months, but your job's adjusting. Here's what we're doing." Those are kind of the big takeaways. I think you guys have a big enough organization at OMG where I'm sure you've had things where you said, "Look, I know that we hired you for this, but this is your job now. Or, I'm changing your job."

Brett:

Yeah, absolutely. Re-deploying people and re-deploying assets based on what the marketplace gives you, based on what's needed. Yeah, we kind of did something similar in COVID when a lot of our Amazon clients, Amazon stopped delivering their product or stopped receiving their product into the warehouses. So, Chris Tyler, who you guys work very closely with, he and I were chatting and then he rallied the Amazon team. They're like, "Well, we've never done fulfilled by merchant, but let's coach our clients through that. Let's make calls to a bunch of our network and figure out how to guide our clients through this."

Brett:

So, we started doing things that were outside of our norm to help clients succeed. In some ways, it was kind of a fun time. It was also painful, and I wish we could have avoided it, but in some ways there was also this element of "Wow, I'm proud of the team. I'm proud of what they accomplished."

Ken:

Sure.

Brett:

We're kind of up against the time, although I'd love to chat for another 30 minutes or an hour here, but we're kind of up against it. I mentioned the Winston Churchill quote, "Never give up." I love Winston Churchill. That guy is so inspiring. We could talk at length about him as well. Talk about the Winston Churchill painting, and how that kind of relates to the fire, and we'll kind of wrap up with this.

Ken:

Yeah, and hopefully what I shared with you, I sent you a -

Brett:

Yeah, I'll put the picture in the show notes. So, check it out at OMGCommerce.com under Podcasts, or you can Google Ken Kline, Episode E-Commerce Evolution. You'll find it. I'll put a picture of that in the show notes.

Ken:

Yeah, so the cool thing is, I attended the Ramsey Solutions, which is Dave Ramsey, which has a very successful business where Dave Ramsey is the product and then his product is also expertise and managing personal finances, and trying to be successful. I attended Entrée Leadership, which is a week-long deep dive that... I think one of the last classes was the one where he talked personally was the one I attended, which it was like 2015. So, like a year before the fire.

Ken:

Part of the deal is, when you go through these five day intensive discussions with Dave Ramsey about not only running a successful business, but running a very profitable business. Then he's an extremist. I don't mean that in a bad way. He's a purist, I should say, that not only does he have a massive business at scale with 600+ employees, $200 million, he doesn't have any bank debt. He doesn't use banking for that. The only thing he does with the bank is park all his money. So, he runs it totally on cashflow and it's very inspiring.

Ken:

The Entrée Leadership thing, part of the deal is at the end they have a ceremony. They kind of say, "Hey you guys are part of this graduating class," and then Dave Ramsey personally gave each of us a signed lithograph from that artist that says... It's Winston Churchill, "Never give in."

Brett:

I just found it, so watching the video, you should be able to see it now. I'm sharing it on the screen.

Ken:

Cool. Thanks for putting that up. It's actually framed in a really nice frame, but I did the cam scanner and it cut the frame out and gave you Winston, which is fine. The funny thing is, or the interesting thing Brett, is I was very inspired by this. I have a whole notebook of notes from Dave Ramsey, and all the talks, and the dinners and everything. I took this, and I had it framed in a very nice frame, and I hung it at the front entrance of our office. It's just really interesting Brett, that that was the only wall that didn't get destroyed, and this painting, this lithograph framed had a little bit of smoke damage but it was one of the only things that didn't get destroyed.

Brett:

That's so crazy. So cool. It's so symbolic. It's just really adds to the story. I love Winston Churchill. Never give up. Never give in. It's such a powerful way to live life and your business. As we all try to conquer unchartered territories and either compete with Amazon or partner with Amazon, or once the pandemic is over and we face the next set of challenges, we need that mindset. We need that never give in, never give up attitude. So, I'm really glad to tie that into the story. It's such a great way to end that discussion, and also kind of wrap up the podcast.

Brett:

Ken, for people to check you out more, because I always recommend, "Hey follow good marketers. Pay attention to what other good e-commerce brands are doing," how can people kind of discover VHC Brands, and then how can people connect with you either on social or elsewhere?

Ken:

Yeah, the funny thing is Brett, that's where I'm anti-social. I actually don't participate in any of that.

Brett:

Awesome. I love that.

Ken:

It's KKline@VHCBrands. Because I write 1,000 word emails that probably make everybody roll their eyes because I'm an English major, I like -

Brett:

Your team shares them in the office. "Check this out. This is amazing."

Ken:

Yeah, I like getting and receiving emails, which is really old school at this point. I appreciate that my team is like, "Please be on Teams and just chat." So like, no I want to write a long email and you have to read it. KKline@VHCBrands.com. I don't know of other good ways to reach me. Maybe-

Brett:

Yeah, that's fine. People can reach -

Ken:

Yeah, reach out to OMG and then OMG will find me.

Brett:

Exactly.

Ken:

Maybe that...

Brett:

OMG will... Yeah, we'll track Ken down for you, but you have VHCBrands.com. Also, you can check him out on Amazon doing some great things there as well. Ken, hey this has been a blast. This has been inspiring to me, and educational. I really appreciate you taking the time and opening up for us.

Ken:

Yeah, thank you. I appreciate the hour, Brett. It was really wonderful.

Brett:

Yep, absolutely. Absolutely. As always, you can find all the details in the show notes. Reach out to Ken and give him a thank you for this episode. As always, we'd love to hear your feedback. What would like to hear more of on this podcast? And, if you haven't done it, we would love that review on iTunes. That helps other people discover the show. It makes my day as well. With that, until next time, thank you for listening.

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Episode 145

:

Jared Mitchell - Skincare by Alana

Overlooked Growth Hacks (How to NOT be a One Trick Pony)

Jared Mitchell has a unique perspective on the eCommerce industry.

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Jared Mitchell has a unique perspective on the eCommerce industry. He and his wife, Alana, run two ecommerce sites - skincarebyalana.com and alanamitchell.com. He’s also the lead eCommerce consultant for Neil Patel and he runs an eCommerce training group at beefysites.com. This guy has forgotten more good eCommerce ideas than most will ever learn.

Jared is also a close friend and he’s my surfing mentor. We do take a very brief detour to talk surfing on this episode, but mostly we talk about overlooked growth ideas!

Here’s a look at what we explore on the podcast:

How to NOT be a one-trick pony. And many, many successful eCommerce businesses are far too reliant on just one traffic source or one product.
Why Jared recommends at least 10 sources of sales and what channels make his top 10 list.
Push notifications - how and why they work and why you shouldn’t over-think them
Phone sales - customers who buy over the phone often have twice the average order value of other buyers.
Postcards - how Jared and Alana sold almost $30,000 worth of product on a simple and cheap postcard.
Live video - what to share in a live video, how to broadcast your video and how to repurpose your video once it’s complete.

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Mentioned in this episode:

eE Episode 35 with Jared Mitchell

Amazon Web Services (AWS)

Subscribers.com

PushCrew (Now VWO Engage)

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Jared Mitchell - Owner at Skincare By Alana

Skincare by Alana - Buy Skin Care Products

AlanaMitchell.com

Neil Patel

$97 e-Comm Help Club

Beefysites.com

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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, CEO of OMG Commerce. And today, this is going to be a treat for you and I'm really excited about it for a couple reasons. One, this is a return guest so that's an elite club there. There are a few in that club but it's still elite. So this is a return guest, and this guest was a personal friend of mine. So he's somebody that I look up to, he's extremely bright in business, but we're also buddies. This guy is my surf instructor, so maybe potentially more on that in just a minute.

Brett:

I'm excited to welcome to the show Mr. Jared Mitchell, he and his wife Alana are owners of Skincare By Alana, also alanamitchell.com. And then Jared, has the distinct privilege of being the lead e-commerce consultant for none other than the world famous Neil Patel. And so, Jared, has this really unique perspective where he's running e-commerce businesses, but then he's also consulting with e-commerce businesses all the time. He gets to see the good, the bad, and the ugly. And so today we're going to be talking about growth hacks that you're likely missing, and subtitle, how to not be a one trick pony. So with that, Jared, what's up man, welcome to the show and thanks for coming on.

Jared:

Thank you for having me. You absolutely crushed that intro.

Brett:

Thanks, dude. Thanks. You're an inspiring guy.

Jared:

Gosh! Thanks for all the compliments. That was the best podcast intro I've ever heard.

Brett:

Cool, I'll take that as a compliment. That is my goal. I think a good intro just sets the stage. If someone's getting up on a literal stage to speak, you'd have a good intro. If you're podcasting, you'd have a good intro, because I've heard some bad ones. I've spoken at different events and I've heard some really bad intros like, "I think this guy's name is Brett, I think. Who knows, hope you don't fall asleep. Okay, take it away Brett." Like the good ones.

Brett:

So speaking of which, you are my surf instructor. I think this would be good to just have a quick diversion for those out there that aspire to surf. I'm a Midwest guy so I'm not talented or skilled in any way, I'm also tall and not super skinny. So it's like I'm not built like a surfer but you've helped me surf, and so you want to give people your surf background just real quick?

Jared:

Surf background. Geez! I started surfing when I was, man I think in the fifth or sixth grade, and just surfed on and off till college when I came back to California and started surfing every day again. But it is my favorite thing to do, and right now I can't really connect it on this or not, I have not been able to search since pre-COVID because I broke my eardrum and I need surgery.

Brett:

You told me about that. It's terrible. And we surfed this summer a little bit and you were still not fully in commission then which is a bummer but, yeah. I look like a Midwest guy trying to surf, Jared, looks like he's been surfing his whole life because he has. So if you want the full scoop on Jared's background, go back and listen to Episode 35 of this podcast, eCommerce Evolution podcast episode 35. You'll hear the whole backstory of Jared Mitchell, although we didn't talk surfing, so I'm glad we threw that in on this episode. But let's dive in. So Jared, kind of sum up what you do for... What is it that you do around here both for your stores and then for Neil? Just talk about some of your... things you do and the kind of what your secret skills... What am I looking for here, your secret abilities are there.

Jared:

Was that an Office Space reference?

Brett:

I think it was it an Office Space. Yes. Good call.

Jared:

Oh, it was such a good movie. Unbelievable. We have the poster in the other room.

Brett:

Is it good for the company? Is that the poster?

Jared:

What would you say you do here Bob?

Brett:

That's...

Jared:

So appropriate. So I think you asked me what I do for Neil, basically he ask me to jump, I say how high. But really, if there's a client that comes through the funnel that is e-comm and they need a little consulting, I sort of lead the charge there in general, although he does have an agency now that's awesome, that takes a lot of those leads too. And then recently, I've helped him write some digital products, and then it was really a lot of fun one morning when I got a call and he invited me to be in one of his digital products.

Brett:

Nice.

Jared:

So I went up to Hollywood, this is pre-COVID, and I didn't know anything about what was going on. He just said, "Hey, can you be on some film I'm doing?" I was like, "Of course, sure." And I just love to hang out with him. And I showed up, and it was like a big fancy Hollywood studio with 15 people there, including attorneys. They put me in the makeup chair. I had never even read from a teleprompter. And I was so freaked out and he's over in the corner, and I'm trying to do this. I'm just horrible. And he's over there laughing. He thinks it's hilarious.

Brett:

I bet in the end though you pulled it off. I'm sure it was very successful at the end of the day?

Jared:

I think so. I think I did. And then the other part of the problem is I'm literally twice as big as Neil. The joke is when we hang out I tell people I'm his bodyguard.

Brett:

Yeah, yeah.

Jared:

And So that was just funny to see us on camera and some of the differences there.

Brett:

That's awesome. What a good experience. But yeah, there's a lot of pressure. When they apply makeup, they put you in the chair, and the lights and the makeup, there's a lot of pressure. You feel like, "I've got to perform now. I'm going to be a rock star now." So we'll have to check that out. I'm excited to see the end product there. So we talked about as we're kind of prepping for this show, we talked about this idea that there's a lot of e-commerce businesses out there, even those that are mildly successful or quite successful, but you might still label a one trick pony, right? And you said, as you dig into Google Analytics and you're helping a consulting client, and you're trying to walk them through what they should do next, and how they should grow, a lot of times you find they're a one trick pony and they're then surprised to hear that. What do you mean by that and what are some of the common scenarios that you run into?

Jared:

Well, first of all, nomenclature is important to me. So I tend to go with the phrase, one trick dream unicorn.

Brett:

What do you mean dream unicorn?

Jared:

That's like...

Brett:

Yes, I think that's much more appropriate. And why do you choose this nomenclature?

Jared:

It goes over really well in the boardroom with these rough and tough CEO types. But I'll eventually sit them down and I'll bring up data onto my screen so that... It's hard to argue with that, right? And I'll be like, "So what I've discovered is at the end of the day, you exist because you sell one product on Amazon, so you don't even own your business or your customers."

Brett:

Right. Are we still friends?

Jared:

Yeah.

Brett:

I did call you a dream unicorn though. Your business is a dream unicorn not a pony. So you got that going for you.

Jared:

And so I watch their faces go. I'm like, "Sorry, here's the data." So that's where we're at. But yeah, I'm sure you've run into this before too. I am just shocked at the amount of businesses that I dive into that are structured that way. And what I'm finding is it's harder and harder to scale, survive, and thrive, if you're kind of running this one trick unicorn or kind of fake brand business these days.

Brett:

Yes, yes. And it's one of those things where I think the environment lends itself well to potentially having one product really hit, and do well on Amazon, and then rank and then get a lot of momentum, and a lot of sales because Amazon is huge, or one specific paid channel really explodes for you. Maybe you got in early on Facebook ads, or there's just something they clicked for you. And so that's great but then you never grow beyond that. And so I think that this whole idea is, yeah, you don't want to be relying on just one product, or one traffic source, or one marketplace, or really one anything. If you are, if you are a one trick dream unicorn, that's a really dangerous place to be. That's a really dangerous place to be in and makes it hard to scale. So what I thought we would do, you talk about this idea of, "Hey, you should have 10 sales channels ideally," right?

Brett:

So you talked to a lot of people that maybe find out, hey, 90 plus percent of their sales are from Amazon. If that's the case, it's okay for now, just you don't want to stay there. Right? So 10 different sales channels. You want to talk through at least some of the ones you look for and or recommend, and then we're going to look at some unique growth hacks as well.

Jared:

Yeah, I think that's great. I'll tell you which ones I look for. They're not in any particular order because it really just depends on the audience, and the product, and how you're positioning it. But in general, I look for the following . So the first is just your regular store whether it's Shopify, Magento, BigCommerce, whatever. Having your own direct consumer channel is where we usually begin. From there, I usually look at Amazon because that's where half of the US hangs out during holiday season and things like that ..

Brett:

Yep. Half of all e-comm in the US is Amazon, and I've seen those numbers as high as 52 to 55%.

Jared:

Yeah.

Brett:

And, yeah, in this holiday I'm sure it'll be at least that much.

Jared:

Oh, my gosh, it's grown every year. And every second that their website goes down, Jeff Bezos, loses $2500.

Brett:

Wow.

Jared:

Yeah. Yeah, that was pre-COVID. I bet just more now.

Brett:

And what is interesting about that, though, is I never heard that number before but that's the reason Amazon developed AWS, right? They developed AWS for amazon.com. They wanted to control their own environment, their own hosting, because they didn't want to be dependent on anyone else. They're scaling so rapidly, they built this environment, and then started to realize, "Hey, we can build capacity here, and oh, hey, this could be a service." And then for a while AWS was the most profitable part of their business. It still probably is although advertising may be just as profitable. But yeah, anyway, that's a little tangent but still so related. So you got your own store, got Amazon, what else?

Jared:

Yeah, usually you go into a client and they've got one of those set up, and you sort of start the process of setting the other. And that's kind of where you start. But from there, we of course, and you're going to love this one. Look, look at Google and YouTube. And I do list those separately. And I do recommend OMG no matter what podcasts I'm on number one, because you guys crushed it for there. And then of course, Facebook, Instagram. I do group those together because how the analytics..

Brett:

It's the same ad platform.

Jared:

Yeah. And then I think these days you got to be doing something with influencer marketing, which is a passion of mine. And then I have a grouping where I throw in the Walmarts of the world all in this one group.

Brett:

Other marketplaces.

Jared:

Yeah. Other marketplaces. I think if you set up your data feed correctly, it can be something as easy as flipping on a switch in most cases. And then one that people... I don't know why they don't this because it's free, is just in general PR for your business. It's literally about sending email out to producers or editors, and it's ask not have not. And that's a big one for us. The problem is it can't be tracked all that well, but you can see the effect on the bottom line for sure. And then lastly is wholesale.

Brett:

Yeah, trying to get in. By that you mean getting into physical retail stores or selling to someone else who's going to resell your product.

Jared:

You got it. Building that army, that ground army. And it can still be done even in the COVID era. It's a little different now but that that alone... Wholesale alone is some company's entire strategy when they come to me. They're like, "We need to start direct to consumer." And a lot of brand owners just don't think it's for them, or this or that, or think that it's going to be invalid after COVID. And it's here to stay, it's just going to look different.

Brett:

Yeah, and I think for a lot of businesses just going D2C isn't the greatest long term solution and probably won't fully get you where you're going. I think you have to look at marketplaces, which I know some people could categorize that differently. But then also the wholesale thing, I think that's... A lot of the people we talk to, and I'm sure it's the same for you, completely overlook wholesale.

Brett:

So I want to get into some kind of unique growth hacks and some things you do that are different. We've had several podcasts about Google and YouTube ads, and Facebook ads, things like that. So I want to get into some things that are kind of unique or that people are probably overlooking, but before we do, I want us to talk a little bit about wholesale. So what do you recommend there? How should someone get started? I know we could have probably an entire podcast about wholesale so but what are just a few things people should consider and maybe how should someone get started there.

Jared:

Just to get started in wholesale, if you're just starting point blank, fresh, I would definitely hire a brokerage firm to help you because they're going to not only act as a consultant to help you get your brand ready and positioned for wholesale, they're also going to introduce you to those key relationships.

Brett:

Buyers and other retailers and things like that.

Jared:

Yeah. But taking a step back further, you really got to evaluate your margins and make sure they're there because generally, you'll have to keystone your products to wholesalers. So if you're selling a face cream for 30 bucks, you're going to need to offer it to wholesalers most likely for around 15. So just making sure you got margins there.

Brett:

Yep. Do you still margin if you offer your product at about 50% off of what you sell D2C.

Jared:

Sure.

Brett:

Yeah.

Jared:

But keep in mind in general, they're buying in bulk. And one main mistake people make is they think I've got this amazing product here, I've got to go straight to you Albertsons, or some Kroger, or some huge chain of stores, Whole Foods or whatever. And they go for the juggler. And in my opinion, that's not the best way to get started unless you're someone that already has huge coverage, maybe unlike one of the advertising platforms and huge brand awareness. I recommend starting with smaller mom-and-pop, more brick-and-mortar smaller chain stores, and sort of building your way up.

Brett:

That's great. And one added benefit that a lot of people don't think about, when you're wholesaling, when you have your product in physical stores, is that will lead to increased online sales as well. So just the idea that likely you're not going to have your whole product line on the shelf in a physical store, you can have just select products, as people try that out, and they're introduced your brand, they will shop online. We see that a lot with larger retailers where... And we work with some retailers that have physical stores of their own and they sell online. And their online sales are always biggest, where they have physical source, right? So it's just one of those things that the two really do work hand in hand, and I think that's something people overlook. So...

Jared:

Yeah. There's a part of that you got to consider advertising, right, and awareness.

Brett:

Yes. Yeah, exactly. Yeah. So you're giving up some margin, but people are buying in bulk, and you hit that shelf space, and that is indeed marketing and awareness with really not a lot of risk, right? And so I think there's just lots and lots of reasons to consider that. So, okay, cool. Well, let's dive into a few topics that maybe people don't always think about. And so I'm going to kind of go through these and not in any particular order, and some will just kind of go through quickly, others will dive into a little bit. So I know one you're a big believer in, which I have very little experience and so I'm excited to talk to you about it is push notifications. So just briefly describe what push notifications are, I think most people will probably know, but a few might not, and then we'd love to hear how you guys at that that Skincare By Alana are using it for sure...

Jared:

Awesome, yeah. And it's so funny because when I hear push notifications, the first thing I think of is annoying.

Brett:

Yeah, yeah, me too.

Jared:

Yeah. But it's like everyone goes and shops at the grocery store different. I go in, I'm barreling through there, I grab my product and get out as soon as I can, and my wife Alana, she likes to bring her coupons, and she looks up here instead of down there and goes trying different aisles. And that was the idea behind us setting up push notifications on site. And if you've never seen them, it's kind of this pop up that appears on your site at some point, usually on the homepage, or on any page on your first visit and just says, "Is it okay for XYZ site to notify you?" And you either pick yes or no. And a lot of people really like this. This is how they want to keep in touch with your brand. Don't ask me why it's not my preferred way. But-

Brett:

Yeah. I see those things and I'm like, "No, I don't need any other message." Yeah. But if I talk to a lot of people, and you are your business is not unique and then you're not alone. This works for a lot of e-commerce businesses. There're people that like to get push notifications, so let them get them.

Jared:

Absolutely. And then when it comes up, it's usually a bottom right hand side little pop up that comes up and notifies you, and you can put pictures in there now, links, and... Some of the rules change here and there, but what people usually don't do is push it to the level that we have, and they don't even know it's available. We've been doing this a really long time. So our list it sort of builds up like an email list, and anytime you have to make an announcement, maybe some new blog article, a new product, a sale, you just send out a push notification. But what we do is you can actually segment those lists now, and you can set up drip campaigns through the push notifications. So the more..

Brett:

I did not know that was possible. That's fantastic.

Jared:

Yeah, it's crazy. I actually set everything up, and then I handled it to my marketing team, which is common, and then when it came back to me they're like, "Oh, yeah, you didn't know we set up all these drip campaigns, we segmented..." I was like, "I didn't even know that existed." They showed me. Dude, this is awesome what they're doing with this. And it's just like people are leaving this hanging around, and I'm like, "Hey, man, at least part of resistance, they're already on your site. Let's figure out a way to do this in a non annoying way and start capturing some of those people."

Brett:

Yeah, that's fantastic. So talk a little bit about how are you segmenting? So you mentioned you let people know and use a push notification for new blog posts, and sales, and new product launches and things like that. So you segmenting by, "Hey, these are people that interact with the blog so we're going to let them know about every blog release, these are people that bought this product so we're going to let them know about a complimentary product" or something like that. How are you guys segmenting?

Jared:

Basically, we'll work backwards and look at the sales and people that actually click versus who's shown the little notification. And you said it. It's basically new product releases is one segment, one is people who like to read or blog articles, and we have one big one for sales, and there's probably a few more. But essentially, we segmented it that way and we were careful to clean our list as well, there's people that are just shown to that aren't interacting, we'll remove them on a monthly basis.

Brett:

Okay. And you're doing that for what purpose? Just because one you don't want to annoy people, but as... Is almost like email deliverability rates where as the deliverability rates are better that that works in your favor?

Jared:

It kind of. Yeah, yeah. It's more quality of a program, and you'll get shown a little bit more and... because some of these browsers will block them too. Right?

Brett:

Got it.

Jared:

Yeah.

Brett:

Yeah. Any special insights? And if there aren't any that come to mind, that's fine. But what are you doing with the actual push notification? Do you always include an image, is it more just an image in a headline, or is there a big chunk of copy? What do these look like? Because I say no to all of them. So I guess I should say yes just so I can sample these things, but makes you look like...

Jared:

Say yes to ours. We'll tell you about every single lotion that comes out.

Brett:

Yes. I need some anti-aging anymore, I need more moisturizing, I need to buy one of your new rollers that I'm really excited about, so yes, I will do that after this episode.

Jared:

Images tend to work really well for us. Not all browsers allow them, but in turn we can do any sort of provocative image, meaning model pointing at-

Brett:

With your shirt off or what did mean?

Jared:

With my shirt off, that sort of thing.

Brett:

Yeah.

Jared:

But basically, what we did is we took what was working well with email and copied and pasted it, literally.

Brett:

Nice.

Jared:

Well, what was working well with our on site homepage banner, copy and paste. It doesn't need to be a new creation, it can literally be recycled and that's the beauty of it.

Brett:

Yeah, I love that so much. So push notifications. Last question related to push notifications. Do you have a favorite tool or a couple of tools to recommend? And I know that's always a tricky question because the best service provider, best tool today may be gone tomorrow. But just at the time of this recording, what do you recommend?

Jared:

Yeah, I think it's subscribers.io is the one that we use, and it's the one that Neil, makes.

Brett:

Cool.

Jared:

There's also PushCrew. We've used.. We might still use them as well. And there's one other that I'm forgetting, but you might know some too.

Brett:

Yeah, actually, I don't. And this is one of the areas where I'm clueless on this topic. But...

Jared:

Yeah.

Brett:

So check it out. Push notifications, super exciting. Okay. So let's transition to another growth hack that I think a lot of people are missing. And that is live video. So live video. And you guys, you want to talk just a little bit about the skincare business, because again, just a little background on that would be good, and then talk about how you use live video.

Jared:

Yeah, man, man. So we heard about live video and its effectiveness early on. So we started messing around pretty early with it. My wife and I own two skincare businesses together. And one is a retail store that retails over 300 lines of other people's brands, and then one is our own skincare brand, which is basically just her name, Alana Mitchell. And we decided, "Hey, let's check out this whole live video thing." And so we started early with trying to figure out what networks we could go live on. And a lot of people don't know the following that you can actually pre-record a live video, and then upload it like it's going live on 15 to 20 different platforms all at once. Not only that, you can broadcast live to your personal Facebook profile, your business page, and any groups that you own, all the same video all at once.

Jared:

Now, it took me a long time to figure that out. You can even do Instagram at the same time. But through a lot of trial and error and testing, we figured it out. And early on, we started doing this and just practicing, and it was so archaic, but that I used to have six iPhones at the same time. I just had to figure it out. And we were invited early on by Amazon corporate to be one of their testers for live video, because my wife is very good at it, and she's known in the skincare industry, and it was an honor. And that was fantastic. If you don't know about Amazon Live, you should probably check it out. It's been a little bit..

Brett:

It actually appears on the home page of Amazon, right? I've encountered it somehow on the Amazon app and stuff, and it almost looks like... For those who haven't seen, it's almost like QVC, right? It's like QVC home shopping network type thing but on the Amazon app. It's fascinating.

Jared:

You can advertise there too. And we all know they have a lot of traffic. What they haven't figured out yet is the right format and presentation. So it's definitely starting out QVCish, but from what I can tell, they're going to need more fat a little bit to make it consumable and actually work for their platform. But for now, you can go live, you can share what products you think people should buy, and people are watching it.

Brett:

Yeah, so interesting. So I've got a ton of questions it's a live video. I'll try to narrow it down to the most important and I think the questions that most people will want to know. First of all, what do you say in these live videos? What do you do? And how do you know if you should do live video, because as an example, me I'm an ad guy, so I can think of YouTube ad ideas all day long, or even use Facebook ad ideas even though I don't run Facebook ads. I can think video ads. That's a clear structure in my head. But live videos, what do we do? What does a good live video look like, and who do you think live video is appropriate for?

Jared:

Who do you think it's appropriate for to do live videos or ..

Brett:

To do live video, yes. So what type of products should you do live video for?

Jared:

Oh, okay.

Brett:

Maybe it's all e-commerce but I'm just curious if you have any thoughts there.

Jared:

Yeah, yeah. Awesome. Well, the first time we went live on Amazon, I spent $0 in ads, and we had 30,000 views.

Brett:

That's pretty good. That's pretty good.

Jared:

It was crazy. And what I learned from this is that it was a good thing that we looked a little mom-and-popish. It's obviously a great thing when your wife is the hottest woman in the world, which totally is ..

Brett:

Hope you're listening Alana, Jared, gets extra points for this. Good job, Jared, way to go.

Jared:

And then we had our kids in the video. It was chaotic, we were making jokes, everyone is running around, Eli, my five year old takes his shirt off in the middle of the video, starts flexing. It was hilarious and-

Brett:

I was joking about you taking your shirt off, but he actually did.

Jared:

No, he did.

Brett:

And also for those that are not watching the podcast, and you may not... You're not watching the video, you're just listening, Jared, looks a little bit like Jacob Black. And I'll probably need to put the show notes, the actual picture of you in the Nacho Libre setup. Yes.

Jared:

You need to put that in there.

Brett:

Yeah, yeah, yeah. That's fantastic.

Jared:

I've got my COVID 15 or 20 back on me and so I'm starting to get there where I feel I could probably do it if I grew up my hair again.

Brett:

Beautiful. Beautiful. And so these videos then if you're going live, is this strictly product demo, are you using this to release a new product, or just to show some tips on old product. What could this look like?

Jared:

I think that people need help with gift ideas.

Brett:

People a lot. Just the part not the gift part. Yeah, that's cool.

Jared:

Yeah. Yeah. And they don't really want to be sold to they want to be helped, and they want to be done in a way that's entertaining but also realistic. And I think where we've done some damage there is by putting our hearts on our sleeve. I'll literally be behind the camera, Alana, will be up there and she looks presentable, but we got kids running around, we got... I'm throwing props at her, I'm interrupting her and be like, "Hey, we'll talk about this." And it seems like this lady is in her home, and she's really helping me explain how to make my skin better, or, "Hey, I've got some really great holiday gift ideas that you've never seen before." Some of them are my product lines, some of them are others, and really gets into that and helps people. And then the key is asking questions straight. Please chat below to ask your question. Please comment below to enter our contest. We'll announce the winners towards the end of the video. And that engagement, that build up will help you get syndicated more mid live broadcasts.

Brett:

Awesome get someone engaged, get them to stick around to the end. I love that. And I think that is the perfect way to frame it. Right? Think about it for this perspective, people need help buying the right products, they need help buying gifts, they need help knowing in your case with skincare, am I using the product properly, should I use it in the morning or at night or how should I prep my skin before I use it? All these things. People have questions, and so if you answer those, and if you're helpful, and if you're real and not sound like just a pitchman, I think people will really resonate with that.

Brett:

Now talk through briefly and then we'll kind of wrap up on my video. What's the tool you use, or how do you stream to all these variety of places, and now you've kind of gotten away from the six iPhone thing. What is your tech setup right now and what's this tool you use?

Jared:

It's kind of back to the software caveat, there might be more now as it got more popular. But back then, it was a software piece called restream.io.

Brett:

Restream.io. Okay.

Jared:

Mm-hmm (affirmative). And it helped you basically take your one camera feed. There's a few extra pieces of software, but it was really no big deal. They were really helpful, and they had live chat, and it basically took your feed and you typed in all the little networks, and groups, and things you wanted to show on and hit play. And the missing element that I found that helped me... But you have to mention a piece of software called CommentSold. There's also some others out there. Yeah. But if you can use that in unison with live video, people can basically comment and make a purchase pretty easily over the network they're commenting on, so that sort of makes it a little bit more accessible.

Jared:

And then lastly, if you can figure out, this was kind of the Golden Nugget bomb that'll drop. If you can figure out how to simulcast, how some social media platforms will let you do joint live videos with an influencer to sort of help you along with your live video. It's a little tricky but if you can figure out how to do it, obviously you have access to a much broader audience and they're more willing to mesh with yours, and listen to you, and listen to your influencer.

Brett:

So that would be where maybe you and the influencer are on a Zoom call and you're sharing that, or where you're just broadcasting your content on an influencers YouTube channel as an example.

Jared:

if you want to do pre-recorded, you can do it any way you want, with Zoom.

Brett:

That's a good point. Yeah.

Jared:

If you want to do it live, there's features on Instagram and others where you can request to join someone's live video.

Brett:

Cool. That is so cool. I love that. And then just like you were talking about before, where you're taking your email copy or homepage copy, and using that for push notifications, you can also take these live videos and take segments have these live videos and use them in your video ads, use them for YouTube content to get to rank, put it in a blog post, we found that in some of our most successful blog posts, we include video in the post, so we have the written post and you have a video there. So use the live video as a way to create video, and then even if you don't have a ton of people tuning in live, repurpose it and use it, and leverage it to the hill. So love that topic.

Brett:

Okay, awesome. So another thing that came up as we were doing our prep that I am confident most people are not using is phone sales. So talk about how you guys use the phone to sell because you're all e-commerce, I know you did some wholesale too but e-commerce, how do you use the phone to close more business?

Jared:

I kind of group in postcard mailings, snail mail for wholesale because there're separate sort of topics for me, but it's like, "Why not kick it old school?" So what would it look like if we actually encouraged people to call us? Because no one wants them to call them, or if they do, they want them to speak to the representative that lives in India, or Thailand or something. So I really delve in our analytics early on and I realized that our average order size was almost 2X when we got someone on the phone, because I have really good sales skills. Yeah.

Brett:

Yeah.

Jared:

Yeah. And our business started with Alana and I are doing the ..

Brett:

Yeah.

Jared:

And let me tell you, your boy here can sell some lotion. Okay?

Brett:

I believe you. You've got that charisma, you've got that charm. I would buy a lotion from you.

Jared:

Yeah. So if you discourage phone sales, I would at least encourage you to run a test. Most business owners don't have people available to answer calls. We do. And once we realize that ALS was doubled, and not only that, the customer attention was way, way percentage higher than people that just purchased online because we had this connection. We started pushing it. And we started in all of our headers, "Call us for any help. Call us to order." Calls, calls, calls, calls on mobile, very important phone number top along with your search function, but push the call on mobile obviously, and same with app. So it's very easy for customers just to push and call you. It was a real game changer for us and helped us really build our business long term.

Brett:

How often or what hours do you have phone staff available, and is that something... What should people consider as they look at maybe building a phone sale staff?

Jared:

Yeah. We recommend having people in house doing it, which is just painful for a lot of owners to hear. People that their native language is English if you're in the USA, it's real people down there selling your products. We have them available roughly from 8:00 to 5:00, and then after five o'clock, I like to redirect all the phone numbers to one of my friends cell phone numbers just a mess with them.

Brett:

I can totally see you doing that.

Jared:

And you're next.

Brett:

That's hilarious. Why do people keep calling me about skin care? Love you buddy. Yeah. So that's fantastic. Yeah, when you realize average order value is 2X for a phone sale. When you also if you were to look at and you're used to a consumable, I don't know if... Than all this data may be kind of hard. But LTV let's have value, also probably significantly higher for a phone order. I know for us we were just shopping for outdoor furniture, and we shopped a few in-store places, and these are just those places who are starting to open back up again after the lockdowns, didn't find anything we like. We just found stuff that was not nice enough, for stuff that cost 30 grand. I was just like, "You're crazy." And so then we found this company called Yardbird, and they were not local though. So I called them, and man they were helpful.

Brett:

The lady I talked to her name is Jen, she was telling me the ins and outs, and then piecing of the furniture. And I ended up spending a lot of money with them, but I probably wouldn't have if I hadn't been on the phone with them. Because I needed some assurance, and I had some questions, and it was a big purchase. So consider the phone I think for a lot of businesses, it could be a secret weapon that you're missing. So in any other final thoughts on phone sales?

Jared:

If they work well, you got to try postcard mailing.

Brett:

Postcards. Yeah, yeah, yeah. Yeah. I saw you guys using postcards because this is another thing. And just a little bit of background, I think I mentioned this on a few of the podcasts but it's been a while. I used to do a decent amount of direct mail. So back in the day I did TV, radio, print, but I still love postcards. And I would do lumpy mail and all kinds of creative stuff for direct mail. But not many people run postcards or mailers of any kind. So how do you guys use postcards?

Jared:

And we've been doing this for almost 15 years now. And it just started with me just trying to think differently. And I just was like, "Well, how are people actually going to pay attention to an offer?" And we had email marketing up and running and some other things, and I thought, "Well, wait, they're already on my list. What if I take those people who didn't open the email or take advantage of the sale, and sort of customize a postcard for them and mail to them, and put a code on there that only they can see, so that I can track the sales back to that code." And so, we did and it was terrifying because I sent out 1000 postcards. And I forget how much it costs, but it was a big expenditure for us at the time because we bootstrapped everything. And it was something like $25,000 in sales came back from just this one mailing. It was psychotic.

Jared:

But the key is to really segment that list and customize, and have a really good offer, and then be able to track it. It goes back to my earlier analogy, everyone goes in the grocery store differently. There's people that will never read your emails, never read your push, they don't like looking at online ads or whatever. But the postcard, they get it..

Brett:

Just love that postcard. Yeah, yeah, yeah. Yes. It's so fascinating. I think it's just something to remember. This is a good entrepreneurial principle in general. Not everyone is like you, right? You and I were both talking about push notifications. I don't like them, but who cares. They work. Right? You may not like postcards, but some of your customers will totally respond to it and love it. So you need to do different things. And this goes back to that initial point you made of, "Hey, you need to have at least 10 sales channels," right? And then some nuances there. You have to do a little bit of everything, right, to be really next level, to have a business that's scalable, maybe one day sellable if that's your goal. You need to do a lot of different things. And so, that's fantastic. How often are you mailing, and then any tools, services, resources you'd recommend for direct mail?

Jared:

I do one a quarter. On Christmas we do more than a postcard. Now, we do a Trifold Mailer and that's about it. We'll do, I think I said once a quarter, and I use a company called GotPrint, G-O-Tprint.com. They're the best price service full color, front back, that I have found. It's less expensive than you think, and it is just so rare that we tried with a client and it doesn't come back profitable.

Brett:

Yeah. And we've actually used... I've used GotPrint, they've been around a long time, great company. So check them out, try some direct mail, I think you will like it. So last topic. And this is kind of been the theme of the show, right? We've been diving into these unique things that could be their own episode, probably but it's kind of fun to do rapid fire through these. This is something that we're big believers in going full funnel. What advice would you give on full-funnel? Maybe just how should people think full-funnel, and what's been your experience. I'm guessing a lot of people you talk to are not thinking full-funnel, but this full-funnel spectrum, what would you say about that?

Jared:

Man yeah. So I look at my website or someone's website is like a ship that technically is always going to have leaks. But I want to figure out the places where I can make the biggest plugs first, where I'm losing people the most. And obviously, you can get a lot of that data from Google Analytics and see where people are exiting your pages, and at what steps they're exiting your checkout. And that's how I kind of started thinking about this process. And it all started with me shopping on Vistaprint for something rather around 15 years ago. And they had a... It wasn't a quite a post purchase upsell, but it was a thank you page offer. And I think I've talked about this before, but I basically was like, "Well, why can I put an offer on my thank you page?" And so we did, and we started selling more products right away. Not only that, it was one out of every 10 people that reached my thank you page took me up on my offer. Then I realized, well why am I so my own brand there because it's my space. It's another.

Brett:

Yes. Yes.

Jared:

Yeah.

Brett:

Yes.

Jared:

So if you have the ability, Shopify is regular plan, they don't let you customize very much. I think Plus does. But whatever platform you're on, we're on Magento for one of our stores. It's very easy to throw a graphic on the thank you page. That's a really easy way to garner some more sales because the customer they already got their wallet out. And they just bought something and now they hit your thank you page, and they see this crazy 50% offer, "You'll only see it here. You have to checkout within the next five minutes," some scarcity there and they're like, "Okay, I'll do it."

Brett:

Fear of facing out scarcity. Yeah, it's such an interesting thing. And you're right. Once someone makes that initial commitment to purchase, their wallet is out. Figuratively or literally, they're saying yes to purchase, and then they'll say yes to an additional item, especially if it's a good deal and a limited time offer. There's going to be a certain percentage that take it and it'll probably surprise you how many, and it'll be just a nice little bump in revenue and profits.

Jared:

Totally.

Brett:

So it's been fantastic man, so much good stuff. I think people may have those of us a couple times to get all the goodness out of it, which is great. But in addition to running two amazing skincare products, you and your wife, and even an amazing team, we work with your team, we love working with your team. In addition to that, in addition to working with Neil Patel, you also do some coaching of e-commerce store owners. So we'll talk a little bit about your e-commerce club. I know that may be closed right now I'm actually not sure, but you want to talk a little bit about that?

Jared:

Yeah, it's always open. It just is. It's canceled any time. I think that it's important that I market it that way. I don't really... I'm probably supposed to do it differently but I want people to feel comfortable. And there's two ways I do it. Number one, it's the person who either has no store and wants to build one, or is just starting. I have an online course that basically is called how to e-commerce. And you join this club for 97 bucks a month, and you're in the club, and I feed you a new lesson each week and you learn basically how to do exactly what we did over the last 15 years just in a much more efficient way.

Jared:

I offer the how to build a Shopify course for free. I offer that as a free course so if you know of anyone who is looking to just build a store, I teach you in just over an hour how to build a killer Shopify store with some good marketing right out the gate. And then the last thing is I do offer coaching, consulting for brands that are doing some volume and want to scale. And so I have some different packages available, stuff like that. But it's really a no pressure thing, and it's something that I really enjoy and consider a passion project.

Brett:

Yeah, and you're very good at it. And I think that's going to be obvious as people listen to this podcast. First, you guys run two amazing businesses. And I've seen the insides of those, and seeing the numbers, and you guys are crushing it, which is awesome. Which also just have this desire to help. You love finding ways to improve and grow a business, and digging into the numbers and finding the story behind those numbers, and then you're really good at clearly laying out ideas. So highly recommend it man, if you want to join that club, or get some one on one coaching with the Jared Mitchell. Maybe he'll even if he asked nicely, throw in a little surfing tip or something like that. I think that'd be great too. So that'll be fun.

Brett:

Awesome, man. Well, how can people learn more? So one thing we talk about in the podcast a lot is, "Hey, go find other good marketers and just follow their stuff." So join their email list, join their push notification list. So talk about your skincare, how people can find your skincare businesses, and then also how can I find your club and coaching.

Jared:

Awesome. Yeah, you can find the club and coaching with beefysites.com, it'll tell you everything you need to know. But if you want to purchase some lotion, let me tell you, go to skincarebyalana.com, our brand is alanamitchell.com, sign up on our email list and we'll send the emails until the day you die and that sort of thing.

Brett:

What I wanted to hear. I love that. I'm sold. I'm in. Send me more emails. I need them. That's awesome. But really you guys are crushing it and kudos to you. And also, awesome job on the podcast dude. You brought the A game.

Jared:

Really? You think so?

Brett:

Oh, yes. Yeah, absolutely.

Jared:

There's so much more I wanted to explore but we only have so much time.

Brett:

We only got an hour so we'll have to... I see what you're doing here, Mitchell. You're trying to come on for round three. And fine. All right. Well, we'll consider that round three with Jared Mitchell, I'll let you be the judge listener. You let us know if you want round three with Jared Mitchell. I bet that's a possibility so we'll look at that.

Jared:

Maybe we can get Chris, aka the unicorn Brewer on here.

Brett:

Chris the unicorn Brewer. I think we need that. We need more Chris Brewer, in this podcast. He and I are recording one in a few weeks. But yeah, Chris, would be delighted to hear you say that.

Jared:

He's got that sweet Southern drawl. You know what I'm saying?

Brett:

He does. He sounds a little bit Southern. Yep. Yep. He's living in Missouri but also Louisiana, so he's got this good mix of both Louisiana accent. So, Chris, if you're listening, you're welcome. Well, this is little Chris Brewer segment. So that's awesome. Jared, thanks again man. It's been a ton of fun.

Jared:

Thanks for having me. You're the man.

Brett:

Sweet. Thanks. All right. And as always, we would love to hear from you our listeners. Hey, what would you like to hear more of? Maybe it's just a simple, we need more Chris Brewer, or round three with Jared Mitchell, something like that, but do let us know what you'd like to hear more of. And then also if you've not done so, leave that review on iTunes, that does help more people discover the podcast and that would make my day as well. And so with that, until next time, thank you for listening.

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Episode 144

:

Chris Brewer - OMG Commerce

Cyber 5 2020 Recap

Here are five key observations, so far, for Holiday 2020.

Cyber 5 Recap

While holiday shopping is still in full swing at the time of this writing, we do have some preliminary numbers for the Cyber 5 2020 (Thanksgiving Thursday–Cyber Monday) and an early look at how Holiday 2020 as a whole is shaping up. Here are five key observations, so far, for Holiday 2020.

We’re breaking every ecommerce record and it’s not even close. No surprise here, but this year marks a record for online sales for Thanksgiving, Black Friday, Cyber Monday and the entire Thanksgiving weekend. Adobe Analytics was predicting two years’ worth of growth being packed into this Holiday Shopping season. So far, we’re on track.
It’s less about a single day, and more about the weekend. This has been the trend for the last few years where retailers and shoppers alike view the Cyber 5 as one big event rather than just the individual days of Black Friday and Cyber Monday. Cyber Monday is still the largest single day, with Black Friday coming in second place. However, Saturday, now dubbed Small Business Saturday, isn’t far behind. In fact, Thanksgiving this year was only 8% larger in total sales than Small Business Saturday. Here’s a quick look at how the Cyber 5 performed. A lot of this growth has come at the expense of in-store shopping. CNBC estimates that Black Friday in-store traffic was down 52% year over year, while curbside pickup is up 52%.

Shipaggedon is real. I first heard this term on one of my favorite podcasts—the Jason and Scot Show (Episode 245). Basically, it’s the idea that delivery networks were already strained due to the pandemic-induced boom in online shopping before the holiday rush. Now, with a record-breaking holiday season on top of a strained system, something has to give. It’s no joke, and it will be interesting to see how it impacts the rest of holiday shopping. Both UPS and Fedex have recently announced they are cutting some retailers off from being able to ship more packages. This will likely mean early cut offs for guaranteed delivery before Christmas. It could also mean a lot of packages just won’t make it in time for Christmas morning.
Costs are up, but performance is up more. As a digital advertising agency working with some up-and-coming ecommerce brands, we get an inside look into both ad spend and performance across Google Ads, YouTube Ads and Amazon Ads. While numbers aren’t finalized yet, we are seeing that costs have indeed gone up from last year, but conversion rates have gone up even more creating really nice year-over-year growth in total sales and total ad performance. Early analysis shows that CPCs are up nearly 20% year-over-year, but conversion rates are up over 50%.

Predictions for the remainder of the holiday shopping season. With more cities across the US seeing surges in new cases of COVID-19, it’s unlikely to see a material shift from online shopping back to in-store shopping. We should see this record breaking pace continue for the rest of the holiday season. The wildcard is shipeggedon. My prediction is that we’ll see a fair number of digital gift cards purchased and printed off, as well as pictures of gifts that are in transit, but won’t be under the Christmas tree. Online shopping likely won’t slow down too much. Fingers crossed that shipiggedon won’t be as bad as we’re expecting.

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Mentioned in this episode:

Prime Day 2020 eE Episode

Thanksgiving Day Statistics

U.S. Census Bureau Statistics for Q3

Jason & Scot Show

TrueView for Action

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Episode Transcript:

Brett:

Hello and welcome to another edition of The E-Commerce Evolution Podcast. I'm your host, Brett Curry, CEO of OMG Commerce, and hey, we are smack dab in the middle of holiday shopping and we just wrapped up the Cyber Five, and so we thought we'd come to you with this special edition, kind of a brief show looking at, how did things kind of play out? We'll look at some global numbers, we'll look at some of our client data, so some inside info on some OMG Commerce clients.

Brett:

Hey, Brett Curry here. I've got an important question for you. Where will your next big idea come from? Where will your next big breakthrough come from? Or, where will your next little tweak or little improvement come from? I have a suggestion. Check out our guides and resources at OMGCommerce.com. Are you looking to enhance your YouTube ads game? We have two of the best YouTube ad resources that are completely free. Our YouTube ad examples and templates guide and our guide to getting authentic video customer testimonials. But it doesn't stop there. We also have guides on how to maximize sponsor brand video on Amazon, and Amazon DSP, and Google Shopping, and a variety of other things.

Brett:

So get these free guides, give them to your team, even share them with your agency. Just take advantage of these resources and up your game. Let OMG Commerce help. And now, back to the show.

Brett:

With me today is a very esteemed guest. He's the most popular guest on the show, the most frequent guest on the show as well, although it's been too long since he's been on here, but of course, the guest I'm referring to is my business partner, the co-founder of OMG Commerce, Chris Brewer. Chris, what's up, man?

Chris:

Doing great. Great to be here. It is a rare appearance because you're churning out the podcast episodes. Seems like week after week, they pop out into my email inbox. But it's variety, so I guess they do add up, appearances. I'm happy to have that designation.

Brett:

You are the most popular guest, the most frequent guest, all of the above. And yeah, the podcast is on fire here. We've got new shows coming out, which is a ton of fun. So let's dive right into it, Chris. We're going to look at some global numbers, some global trends, and we're just, all of 2020, we're crushing all kinds of sales records for the Cyber Five. We'll talk about what that looks like globally for all of E-Commerce, and then we'll also look at some of the things we're seeing because we manage a fair amount of E-Commerce clients ourselves, and give kind of an inside scoop into some of their data. Obviously, we won't talk about any specific clients, but we've kind of aggregated some of our own data that we'll talk through here in a minute.

Brett:

But before we do that, let's just talk about shopping in general. So sounds like-

Chris:

Two guys talking about shopping. That should really make people listen.

Brett:

Yeah, yeah, yeah. Exactly. And so, it sounds to me like you took advantage of some Black Friday and, or Cyber Monday deals. What'd you do and how'd it work out for the Brewer household?

Chris:

I did. I was licking my wounds a bit because I totally missed Prime Day, which I do think was kind of easy to do this year because the date got kicked forward and there was a lot, I know, discussion on our team, "Are they even going to have it? Can they have it?" All kinds of issues there with getting , so I missed it. I was kind of bummed at some of the deals I missed out on, but on Monday, I definitely took advantage. So we've got a little place here in Florida where I'm recording today, and one of our TVs was too small in the main living area, so I was shopping televisions, which, I think it's a guy thing. I know it's 2020, but TVs, my wife said, "Honey, we need a bigger TV." So I used the little put-it-in-the-room function, so I actually-

Brett:

Some little virtual reality or augmented reality route, where you can see? Yeah.

Chris:

Augmented. Yeah. So I was lining up the wall, and then I got a 55 inch in different spots, like, "Eh, it's just not big enough." So I ended up with a 65 inch, which is kind of an odd size, but I grabbed one. Sony television, arriving mid-December. Brett, I liked this .. They had a bundle, which you know Amazon likes to do, add this or add that.

Brett:

Sure. If you had a mounting bracket, you're going to need the special HDMI cables, you're going to need some of these cool things. Yeah.

Chris:

Yeah. The TV was $798 on sale. With the mounting bracket, I went to checkout, because I'm like, "Oh yeah, I'll add that mounting bracket." All of a sudden, it was $1200. They wanted $300 for the bracket.

Brett:

It's the gold plated mounting bracket. When you use that, the reception is just outstanding.

Chris:

Yeah. So I managed to find an Amazon's choice mounting bracket for $35.

Brett:

That's about right.

Chris:

And save about 310 bucks.

Brett:

You know what's interesting, Chris, is we actually, I did not miss out on Prime Day, I was paying close attention to it, but it was interesting. It's usually in July, this year it was in October, and it really did, go back and listen to the episode that I recorded with Chris Tyler from our team, Prime Day really did mark the kick-off of holiday shopping for this year for a lot of people. Oddly enough, we bought a TV as well. We bought a TV on Prime Day, I got a killer deal. We just, and I've talked about this on the show a couple times because it's been the never-ending project, built a deck, couple of levels, and on the underneath side, we're going to have a roof and we're going to mount a TV so we can watch games out there in the spring and summer and stuff like that. We'll bring it inside when it's raining.

Brett:

But anyway, bought a TV on Prime Day, got a killer deal. So I actually kind of sat out Black Friday and Cyber Monday because I had done all my shopping on Prime Day. So I wonder how many people did that. I will say, though, looking at the data, not a whole lot of people. I think a lot of people were shopping on Black Friday and Cyber Monday, which is interesting.

Brett:

So this year, we've touched on a couple things, Prime Day kind of kicked off holiday shopping for the first time ever, we've got unprecedented E-Commerce growth this year over years past. During the stay-at-home orders back in March and April, E-Commerce was up, it was like 40% of retail. So depending on the way you slice and dice the numbers, it was five or 10 years worth of E-Commerce growth compressed into the two months. It was crazy. And that's when we had delayed shipping and Amazon doing only essentials and things like that. It's leveled out, but the E-Commerce growth for the year has still been phenomenal. We've still seen most of our clients having record months.

Brett:

There are a few categories, and I think it's probably worth pointing this out, a couple of categories that are struggling nationwide and we're seeing it, too. Apparel. Traditional apparel. We've got some specialty apparel that's potentially doing okay, but apparel and accessories. Those areas are kind of, eh, they're pretty soft. We're not getting out as much and apparel has actually been on the decline nationwide for a while, and then COVID just really sped up that decline, for sure.

Brett:

But other than those categories, our clients are mostly up, just mostly crushing it, month after month. Especially if you're doing a year over year comp. Let's talk about a couple of things. Let's just look globally for a minute, Chris, at what we're seeing with Black Friday and through the weekend, and then I want to talk about some other kind of interesting trends that we're seeing, and then we'll look at some OMG Commerce data as well.

Brett:

So this year, Thanksgiving was an interesting day because ... Are you guys, Chris, at the Brewer household or some people in your household, do they shop, do you guys shop on Thanksgiving historically? Are you in-store Black Friday shoppers or no?

Chris:

Historically, I sleep. The ladies, including my daughter, are up at ... I remember one year, we were in Branson, staying at a condo or a cabin or something, and they went out at 3:30 in the morning.

Brett:

Got it.

Chris:

No. No, I sleep.

Brett:

So you skip that got you. Well this year-

Chris:

I skip that, but my wife and my daughter, they hit the stores, typically.

Brett:

So this year, you couldn't hit stores on Thanksgiving for the most part. Walmart, closed. A lot of other major retailers, closed on Thanksgiving, which, I kind of like that trend personally. I love Thanksgiving. I think it should be about family and focusing on that.

Brett:

Also, we're in the E-Commerce space, so if you can't go into physical stores, that's going to boost E-Commerce sales for Thanksgiving. And no surprise, record breaking day for Thanksgiving online sales today. According to Adobe, Thanksgiving Day was up about 21% year over year, so very much accelerated growth over years past. And then, Black Friday was just a complete monster. $9 billion in sales online on Black Friday. But oddly enough, record Black Friday for online sales, but it did not eclipse Cyber Monday of 2019. So interestingly enough, Black Friday did not eclipse Cyber Monday.

Chris:

But retail still got hammered. I mean, the retail numbers on Black Friday were immensely down, right?

Brett:

You're talking about in store?

Chris:

In store. Sorry, I say retail. In store. Yeah.

Brett:

In store numbers were definitely down on Black Friday, without a doubt. Yeah. If you look at total retail, though, I think total retail is going to be up because that's what we're seeing so far with Q3 data, if you look at the US Census Bureau numbers for Q3, in store, brick and mortar, down for sure, but E-Commerce is actually up enough to compensate for that, so that, overall, retail numbers are up. So yeah, in store Black Friday, abysmal. But I still think retail for Black Friday, and we'll see, those numbers haven't been fully impact, the Black Friday total retail should still be pretty good.

Chris:

We've done this enough, I knew when I said retail and I saw the look on your face, I'm like, "What did I just say that was wrong?"

Brett:

I'm like, "What you talking about?"

Chris:

Retail is everything.

Brett:

That's awesome.

Chris:

Yeah.

Brett:

If you're just listening only, maybe you could hear it in our voices, but go back and watch the video, you'll see my reaction.

Chris:

Yeah. I will say, the in store, my son, who's an avid gamer, he actually camped out, he started Wednesday night for a Friday morning opening at Game Stop so he could get one of two of the PlayStation Five's, and he ended up recording a TikTok video that's, I wouldn't say it's viral with 82,000 views, but respectable.

Brett:

That is definitely respectable. And it is interesting, we'll talk about some of the more popular items, and in fact, let's just break away to the popular items just really quickly because this is fun. You've got a couple things going on right now, which will influence, potentially, not necessarily Cyber Five, but influence the holiday time period. You've got the new iPhone, iPhone 12, which I did upgrade to the 12. It looks like this may be what they call a super cycle, so a lot of people upgrading to the 12, which will be interesting. And then you also have the new gaming console, right? The PS5, which, those only come out, what, every couple of years or something like that? It's not the same cycle as phones.

Chris:

Yeah. PS4 to PS5 has been a long time.

Brett:

I think it's been, like, four years or something. We're obviously not gamers. So that's going to be a huge bump. But some other interesting trending items, just to kind of show what's going on this year, the number one, this was all Adobe data, we'll link to this in the show notes, but on Cyber Monday, the number one selling product was Super Mario 3D All-Stars. No idea. AirPods, which I will say, I was kind of late to the AirPod game, I've only had mine for a couple months. Fantastic. I don't know what I did without those. V-Tech toys. We own a lot of V-Tech toys from having lots of kids. This kind of snuck up on me. HP and Dell computers. Okay. Cool. And then number five, Chromecast. So those were the most popular on Cyber Monday.

Brett:

Now, if we back up to Black Friday, couple of interesting things. Lego sets, you've got Samsung 4K TVs, there you go, TCL TVs, Apple Watch in there. Actually, I'm sorry, that was Thanksgiving. And then Black Friday, Hot Wheels, AirPods again, Apple Watch. So it's going to be a good year I think for Apple, which is super interesting. So yeah, aside from crazy people like your son who, he's a highly entertaining dude, camping out for the PS5, not a lot of excitement in store, and with most places nationwide being restricted on the number of people they can have in the store-

Chris:

It's kind of nice not hearing news stories about people being trampled as the doors open. With all of the craziness in 2020 and the protests and just all the violence and all that, and it was a lot quieter season, but it was nice not to hear those kinds of stories this year.

Brett:

For sure. Yeah, definitely quieter. So online Black Friday was huge, but it still did not eclipse Cyber Monday of 2019, interestingly enough. And actually, this is just a fun bit of trivia. Do you know why Cyber Monday is a thing, Chris? Do you kind of know why it originated back in the day? Why Monday instead of some other day?

Chris:

I'm not even going to make a feeble attempt.

Brett:

It would have been probably entertaining. So here's the skinny on this. Back in the day when deals would be in store on Black Friday and then you'd kind of wait, you wouldn't do online deals over the weekend because a lot of people were at home, and back in the early days of online shopping, we were all on dial-up, so our internet speeds were slow. So what retailers found was people wanted to shop on Monday when they were back at work so they had the faster online connections, and then, shopping at work I guess is fun for people. So it just kind of stuck. And then once online retailers started having big sales days on Cyber Monday, then it became a thing. Now we're shopping all the time anywhere we want to, but Cyber Monday is still a thing, which is cool.

Brett:

Couple of other things that are interesting. Curbside pick-up or BOPUS, buy-online-pick-up-in-store, up huge. Up 52% year over year on Black Friday. So that's also probably where a little bit dollars went.

Chris:

Brett, hold on a second. You just casually slid in a very fun and fairly new E-Commerce acronym.

Brett:

I did just throw it in there. Yeah, yeah, yeah. You want to unpack that for a second?

Chris:

You're so fly like that.

Brett:

Mm-hmm (affirmative).

Chris:

E-Commerce has a lot of fun acronyms, ROAS, ACOM, you've got these kind of cool sounding, and then you've got-

Brett:

The advertising cost of Zales there. ACOS? ACOST, whatever. Yeah, however you want to dial that up, it's all good.

Chris:

Don't be a BUFOS. Sorry. Yeah, we'd better not go ... So BOPUS. Buy-online-pick-up-in-store.

Brett:

Buy-online-pick-up-in-store. It actually counts as E-Commerce revenue, but then someone is picking up the item in the store, either curbside or going to the counter and picking it up.

Chris:

I have yet to do any curbside. The whole pandemic, no curbside.

Brett:

I can't say that I have either. Maybe..

Chris:

I've done the Walmart, but I was doing that before.

Brett:

Yeah. You should do the Walmart delivery, dude. It's amazing.

Chris:

I will say, just as a quick side note, for me, and I think most guys can ... Do not ever give me a grocery list. I'll go to the grocery, but I'm in, I'm out, and I don't like searching because I don't go to the grocery that often, so I don't like searching.

Brett:

I love that you call it the grocery. It's almost British. Not grocery store. "I like going to grocery."

Chris:

Whatever. But what I really like, I've loved about Walmart, and Walmart's digital platform for years was not great, but I mean, I love opening up Walmart and going into their shop grocery button right there, and I don't have to search for the bananas. I know that's an easy spot. But I don't have to search for the bananas. I just type in bananas, I click it, and then I do my whole list, and then anything that needs to be substituted, I got it, I show up, they put it in the car. It's amazing.

Brett:

I totally agree, and I found, and this sounds very similar to what you're describing. I'm definitely, I'm the most inefficient in store shopper you've ever seen. I'll go to the back of the store and grab something, then go all the way to the front of the store and grab something, then realize there was something I needed in the back of the store. If someone looked, it's like I was totally lost or need help. I've found I want to just search for something when I'm in the store. Can I just have a search button where I can just type it in here and you'll tell me exactly where the item is? I think that this is a thing, right? There are people like you and I who just prefer to shop online and that number was growing, and then you have people who were just forced to do it because of stay-at-home orders and things like that. All of it is pointing towards just a huge trend in BOPUS, buy-online-pick-up-in-store, and curbside, and delivery, and all of these things, which is super cool.

Chris:

I will say real quickly, since 1998, my wife tries to not take me with her in stores whatsoever because that's the year my daughter was born and we went shopping for furniture shortly thereafter, and I got distracted looking at furniture and I left her in her carrier in the back of the furniture store just sitting on the floor, and then migrated. I know, you've known me for years, you know this is definitely accurate. Migrated up to the front of the store and Jenny's like, "Where's Avana?" And I was like, "Oh crap."

Brett:

She's just doing the shopping, I gave her the list. She's in the back.

Chris:

It was my firstborn, so no worries there.

Brett:

You got better, right?

Chris:

I did. She actually let me go with her for the first time in 20 plus years to Rooms to Go. We went in retail and actually bought a new leather couch for our place here. So anyway, go on.

Brett:

Yeah. Congratulations. It's good that you're back in the game now.

Chris:

Back in the game, even though it probably wasn't the best buying experience for her there either, but oh well.

Brett:

That's awesome. So we did have, then fast forward to Cyber Monday of this year just a couple of days ago at the time of this recording. Online sales, $10.8 billion, again, according to Adobe, we'll link to all this in the show notes, so that's a 15% increase in year over year sales for Cyber Monday. And Cyber Monday broke all kinds of records last year as well. Now I will say, the Adobe numbers are pretty representative of the entire market, but we'll also look when the US Census Bureau data comes out. It maybe will show slightly higher numbers, maybe a little more favorable. But usually, Adobe is pretty close.

Brett:

So you may be saying, "That's interesting. So Cyber Monday grew 15%, but we were up 30%, 40% earlier in lock downs." So what I would say there is Cyber Monday was also already massive. It's hard when you have these global gigantic numbers. It's hard to keep the same percentage year over year growth, so 15% year over year growth for Cyber Monday is still huge.

Chris:

I mean, you still have a lot of people unemployed or low employment in terms of they're not getting the hours they were. I think that's what I've been fascinated by, and I mentioned this to others, is that the total number, you mentioned the 10 year growth in a short timeframe, the amount of people that have come in with purchasing power I think has made up for those that are not able to buy, maybe at the levels that they were previously. So that's been fascinating to me, that the numbers were still as high as they were.

Brett:

For sure. For sure. So here's some other interesting things here as we kind of wrap up some of the global trends, and we'll talk briefly about some OMG things and then leave it at that for this episode of the podcast. So we've been having shipping issues, right? And we all experienced this, or a lot of us did, during the initial stay-at-home orders that, hey, we're making our order, whether it's Walmart Delivery or it's from Amazon or whatever and we're getting notices that, hey, shipping delays. Everything is backed up, there's a ton of demand thrown into the system that nobody was ready for, you've got COVID outbreaks at different distribution centers and third party logistics companies and stuff like that. So it just threw multiple wrenches into the system, so it caused delayed ship times.

Brett:

So that kind of primed us, got us ready for, "Hey, you know what? This holiday shopping season may be interesting." So we're already at record breaking online shopping numbers without holiday, and then we throw holiday into the mix and this Cyber Five and all this crazy stuff, now you've got a system that was already kind of overwhelmed, and now it's overwhelmed even more. Back in August, I was talking to a friend of ours who drives for UPS here in Springfield, MO, and he said, "Everybody's working 12-hour days. Everybody." And this was in August. August is not a good retail time and that's usually a slow time for the delivery companies. So they're already overworked, and then we throw all this additional volume into the system, so I've heard different people say that, "Hey, for all the carriers to get caught up on even just Black Friday deliveries, it may be December 10th or even later." Potentially. For all that to be delivered.

Chris:

We ordered a large item here and this happened a couple times where the FedEx or UPS truck shows up, the guy comes in and says, "Well, it says it's on here, but it's not on the truck." And they drive off and occasionally, Amazon has canceled that as undeliverable and just sent it back. But the guy this week came in and we had the same thing, item didn't show up, then later that night, the manager of the entire facility had taken all the heavy items and was delivering all the large items out and he and my wife chatted for a while, and he just said, "I'm having to help all my guys out because we don't have room on the trucks with these large items because of the masses that we're trying to deal with." Yeah, I'm seeing UPS and FedEx up and down the street here seven days a week. It's crazy.

Brett:

Yeah. It is truly insane. And it makes it clear why Amazon has been on this path to doing their own delivery. Not just because they want to compete with UPS and FedEx and USPS, it's that the system can't handle the growth that Amazon is experiencing now, especially in a COVID-19 world. So it's been super interesting to watch that. But here's what's crazy. As we look at previous years, last couple years, and we can link to this report as well, but there were six days in previous years in December that actually were bigger online than Black Friday. Black Friday is a good day. Black Friday is a huge day, not as big as Cyber Monday, but in recent years, there have been up to six days in December that had total online higher sales than Black Friday did for online.

Brett:

It's interesting, and I'm really fascinated to see if this is going to hold true this year or not. Largely because last days to ship. So last days to ship, I remember back in the early days of E-Commerce when we were kind of just getting strong in the game, maybe eight years ago or so, the last day to ship would maybe be December 15th or something or December 17th, just because the whole system wasn't really up to speed. Well, it's gotten later and later. Now, sometimes it's December 23rd or if you're in certain areas and you've got next day Prime, it's literally the 24th. But curiously enough, it's going to be interesting to see what that's like this year. I would venture to guess it may go back to more like it was before, like the 17th, 15th, something like that being the last day to ship. For some merchants, it's going to be earlier. I even heard one merchant, I don't remember the name of the merchant, but saying their last day that they'll guarantee ship times for on time Christmas delivery is December 4th. Like, wow. Okay. Crazy.

Brett:

So it'll be really interesting to see what happens next. Already a record year for E-Commerce sales, Black Friday was the best Black Friday ever, Cyber Monday this year broke all previous records. I'm really curious to see what happens for the rest of December. Any thoughts or speculation on that, Chris?

Chris:

No, I would definitely, for those listening to the podcast, I know most of us listening are in the business, but do not wait this year. Especially if you've got kids and you're trying to get that special item. It's not just shipping, I mean, it's inventory affects that as well because inventory gets strained with maybe sales days that they didn't expect and then you've got shipping cut-offs. So I would just say don't wait, don't delay. I don't know when this podcast is going to air, but you may have learned your lesson by then.

Brett:

Yeah. So a couple things, and I think this is a tip that would apply both to you as a consumer and you as an online retailer. Think gift cards. This is something that our Google rep has been talking about. Another podcast that I love that I've recommended a few times is The Jason and Scott Show, they've got a great podcast on Shipageddon and a few things. That's just what they're calling the shipping issues, shipping delays. So what they've talked about, our Google rep has talked about it, a few other people is, look at digital and gift card.

Brett:

So once we start nearing that time period of, eh, going to be hard to guarantee delivery by Christmas time, start talking about gift certificates because you can sell gift certificates where someone downloads the gift certificate, prints it off, hands it out. Something like that. Think about the digital delivery of whatever it is you sell. And also, hey, if you procrastinate, I'm a notorious procrastinator in terms of buying gifts, although this year I'm on top of it, if you wait late, you may have to buy a digital gift for the people that are special to you. So be thinking about that. Think about some promos that you can do around gift cards with your email list. Think about banners on the site once we get past that shipping cut-off, so that's something to consider as well.

Chris:

I think that in terms of, I really like that gift card idea because you can even, if you know you're going to miss it, screen shot the item and use that as your gift and let them know that, "Hey, this is what you need to buy that particular item." Those are great tips and ideas.

Brett:

Yeah, it's on the way. And I think this will be the year, we're all going to probably be a little more forgiving and a little more understanding. Like, "Hey, I didn't get the gift on Christmas, not a big deal. It's coming in the next few days or even next week or whatever." So yeah, I think that. Digital slash gift card slash picture of item that you ordered, that's all stuff you can certainly think about.

Chris:

Gatherings are going to be smaller.

Brett:

Exactly.

Chris:

We had a smaller Thanksgiving gathering. Our family is debating, in our family we celebrate Christmas, so we're debating even moving it. My mom said, "Hey, as long as you still come, we'll wait as late as February 1st."

Brett:

They're going to keep the tree up, keep the presents under the tree until Valentine's Day.

Chris:

My parents are in their mid to late-70s. They've been staying locked down. And I've got kids that are running all over the place. So part of that discussion has even been, they think they might be able to get the vaccine before the end of the year, and by early February, they'll be good to go with everything.

Brett:

Right.

Chris:

So I think there's going to be a lot of ... It will be interesting to see how deep into December and even what happens in January, because usually it falls off. There may be a little bit of an impact with delayed gatherings.

Brett:

That's really an interesting thought. How will this play out? We've got shipping madness and potentially early shipping cut-off dates, that could cause people to order early or maybe stop ordering. But then, yeah, because it's not a normal year, maybe the 25th doesn't matter like it used to. We're not gathering on the 25th, maybe we're not gathering at all, or maybe we're gathering in January. Yeah, it's going to be unusual and that could extend some of the shopping, too. So it's going to be really interesting to see how the rest of holiday plays out. And obviously, it's not going to be like traditional years to a large degree, but that is an interesting point, delayed gatherings, how will that impact shopping? Super interesting.

Brett:

Let's do this. Let's kind of wrap up. We'll talk about some of the OMG Commerce data, some of our clients, and we work exclusively retail. If you've listened to the podcast for long at all, you know we've got the Google and YouTube division of OMG Commerce, the Amazon division. We talked about Amazon and Prime Day in a recent episode with Chris Tyler, go back and check that out if you haven't seen it. Here, we're going to talk about YouTube and Google search, Google shopping trends.

Brett:

So let's start with YouTube first. YouTube is a very interesting channel. It's something we're known for. For agencies our size, we're one of the top spenders on YouTube ads, and this has been a crazy year for YouTube. We saw in the early months, again, of the lock down, that viewership on YouTube channels was up 100% to 200% because more people were at home. And what else are you going to do other than watch YouTube? Also, YouTube viewership on TVs, watching with the YouTube app on a smart TV, that's been up 80 plus percent in recent months. And even as things have opened up in some parts of the country, now they're closing back down again, the numbers have still stayed elevated. YouTube consumption is still way up, so what that's done is it's increased new ad inventory and it's made CPMs, or cost per thousands, actually go down a little bit on YouTube or at least stay steady and has just created immense opportunities.

Brett:

So what I want to do, though, is talk through a little bit of the YouTube data that we're seeing. So with YouTube ads we run, we're running TrueView for Action, which those are the, love them or hate them, those are the skippable, pre-roll commercials that pop up before the video that you went to YouTube to watch, you can skip it after five seconds. We're actually charged by the view with those ads, so you're paying a CPV, or a cost per view, but Google will calculate all the numbers for you. They'll calculate your effective cost per click, and we're mainly measuring a cost per conversion or a cost per acquisition, CPA, they'll obviously measure that for you and stuff.

Brett:

So let's just kind of look at what we have seen. Typically, as you get deeper into holiday shopping, especially with Cyber Five, what happens? Well, more advertisers enter the auction, which causes cost to go up. CPCs go up, CPMs go up, everything goes up. But with that, people are also in buying mode. Cyber Five, we're shopping. We want to get the deal now. So buyer intent goes up, conversion rates go up. Often, our majority value goes up as well because we're buying and potentially loading up a cart as we're buying gifts. But for sure, conversion rates go up. So the whole thing is, yeah, hey, if conversion rates go up in step with cost per click and things or if conversion rate goes up in excess of what CPCs go up, then you're golden because your return is great.

Brett:

So here's kind of what we saw. CPCs, this was looking at just this year's data, so the first of November, November 1st through 25th, and then compared to the Cyber Five, CPCs went up about 28%. That's pretty healthy. That's a pretty good increase. Not abnormal or unusual. As we hit Cyber Five, come out of the wood works, so the CPCs go up. Conversion rates went up about 26%. 26%, 27%, so not quite in step, but CPAs actually only grew about 20% for a lot of our clients. So it was interesting. AOVs did grow as well, grew about 8%. So overall, for most clients, it was still a very successful holiday shopping season. Still, the Cyber Five was up over years past and it was interesting as we kind of watched the data, and we'll have a full report of this that will come out later, but we definitely saw with our clients, just the numbers played out globally that Cyber Monday was bigger than Black Friday. We saw that as well. And in fact, with some clients, Saturday and Sunday were bigger than Black Friday as well.

Brett:

I think part of that depends on what kind of offer you structured, how long did it last, when did you have different promotions going on, as far as email blasts and stuff like that? So really interesting to watch. Any other things you noticed, Chris, as you were watching internal teams talking or looking at any data on your end?

Chris:

Yeah. It didn't bother me much to see where the CPCs were going because we've been seeing a trend over the last several years of CPCs going up anyway, and then if you think about how a lot of folks actually, when the lock downs were happening and lots of small businesses were pulling out of the auction and things like that, we saw CPCs go down, I would say, temporarily. So I think they've fully recovered. And then you have a lot more sellers, I believe, E-Commerce sellers, entering into the auction, which can cause those to elevate. But I would say that, I mean, call this a plug, but I was very pleased to see how our team was handling things. RUE, Cyber Five, and I know you and I, co-owners of the agency, something I know that we're both proud of is if you see these teams and how we used to handle Black Friday five years ago or six years ago.

Brett:

Yeah, little bit of chaos in there. Yeah.

Chris:

Yeah. And people trying to wear a lot of hats, and now you've got conversion tracking specialists and you've got a shopping person helping out, and we've got a great Google team that helps out, Google being responsive with things. So I just think that's something that, whether it's OMG Commerce or whatever agency you're considering, even as you think about for next year, really watch how responsive was your team. Even your in-house team. How did they handle the ups and downs of the weekend? And we'd love to hear what challenges you guys faced with Google support or anything else, things that you ran into.

Chris:

So I think overall, like I commented to you before we started, I was very pleased with just how smooth things went overall for our clients.

Brett:

Yeah, it did go well, very well, really top to bottom, and what was interesting, and I think this also probably played into the fact that I shared a minute ago where, for some of our clients, they had record Saturdays and Sundays, specifically Sunday. And I think probably what happened, if you go back to the idea of CPMs, or cost per thousands, or cost per click, they were at an all time high Thanksgiving, but especially Black Friday. That's when all the big advertisers are pulling in. Some of those big advertisers pulled back out until Cyber Monday, and so I think that's another thing you have to look at.

Brett:

We work mainly with growing E-Commerce companies, so typically those that are $100 million in revenue a year and smaller. Some clients that are bigger, certainly, but we've got to be kind of nimble and look at, "Hey, if we have just a Cyber Five deal, it may make sense, we can go hard on Saturday and Sunday because it's less competitive and our dollars go further." Whereas, on Black Friday, it's pretty saturated. CPMs go up maybe 25%, 30% or more, so then it's a little bit harder to compete.

Chris:

I did notice a couple of things in slack channels, and I think us agency folks, we get a little laugh out of this, but it's not that funny, really, and it's where sellers can really, E-Commerce sellers can really help their agency out with these kind of things is, I saw some of our people, "Hey, I noticed so-and-so client is running this promo on Facebook." And we knew about their promotion they wanted to give us for Google, but they got nimble themselves, so just make sure, whether you've got a Google agency or a Facebook agency, if you and your team come up with a brilliant idea Saturday night, let the team know so that we can plug that into the things we're already doing.

Brett:

Yeah, we saw a great one where one of our rockstar AMs, we'll brag on Nicole for a second. We had a promo all set up for a client, won't mention the name. They're an awesome client. But I had the promo all set up in Google, and then she gets an email from the client, because she's on the email list, keeping tabs, and she was like, "Wait a minute. The promo code in the email is different than the promo code they gave us." We reached out to the client, the client said, "Oh yeah, sorry, we gave you the wrong code. The code in the email is correct."

Brett:

So we quickly pivoted and got it set up properly on Google and all was well, but it's just one of those things. I mean, there's always going to be some craziness, but try to coordinate top to bottom, internal team, agency, try to get that all buttoned up as best as possible, for sure. Nothing can spell holiday frustration like, "Hey, you've got a great ad and you're actually managing decent CPCs, but oh, then your conversions drop because you gave the wrong code out."

Chris:

And gosh, guys, keep your promo codes simple. We got a couple that the code the client had to put in was a sentence.

Brett:

So either keep it simple or put it on the page where people can just easily copy and paste or add it. Yeah, you've got to do one of the two, for sure.

Chris:

Right. Yeah.

Brett:

So yeah, awesome. Well, hey, this actually went a little bit longer than I anticipated, but good banter, good discussion, really cool stuff. And again, hey, we're still kind of mid-deal, so some of the data is still coming in, some of it will come to light further. We'll kind of update our blog posts and some other things with some of the most recent data as it becomes available, but overall, just an amazing Cyber Five, and it's going to be really interesting to see how the rest of holiday plays out. Chris, as always, great to have you, man. Thanks for coming on.

Chris:

It was great. I had to mute because the UPS guy showed up and my dog started barking. Finally.

Brett:

Perfect timing. Let's go see if actually he's there being like, "Guys, sorry, it says it's here, it's not here." We'll see if you actually get your delivery. But with that, we're going to wrap things up. As always, thank you for joining us, we'd love to hear from you. What would you like to hear more of, less of on the show? Things like that. Please, chime in. If you've not done so, leave that five star review on iTunes, it helps other people discover the show, it makes our day as well. And so with that, until next time, thank you for listening.

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Episode 143

:

Colby Bauer - Thread Wallets

Building & Protecting Culture - The Story of Thread Wallets

Colby Bauer has personality. He’s a half-pipe skating, snowboarding, former collegiate athlete who turned an idea into an eComm business.

Colby Bauer has personality. He’s a half-pipe skating, snowboarding, former collegiate athlete who turned a simple idea into a thriving eComm business. He and his wife McKenzie started Thread Wallets with just a single product idea. Simple, functional, minimalist wallets with personality. That initial product took off and Thread quickly grew into a team of 22 that now boasts an expanding product line including lanyards, phone cases and more.

While there’s a lot to be impressed about with Colby and McKenzie, and their team I really wanted to key in on Thread’s culture and the unique steps they took to grow. I think you’ll find a ton of good lessons here:

How the key to scale might be engaging in activities that DON’T scale
How financial intelligence (or lack thereof) can make or break startups
How to hire for culture first and is the “hire slow, fire fast” mantra really the way to go
How installing a half-pipe at the office lead to a fight amongst the thread founders, but lead to mental health as a focus for the company
A good CEO is a non-busy CEO…what does this mean and how is it the key to effectiveness

‍

Colby Bauer - Co-Founder and CEO at Thread Wallets

Via YouTube

McKenzie Bauer - Co-Founder and CMO at Thread Wallets

Thread Wallets - Slim Wallets with Style

Mentioned in this episode:

Brigham Young University

Purple Mattress

George Costanza Wallet

War Room Mastermind

Ryan Deiss

Peter Drucker

The Effective Executive

Jeremy Andrus

Traeger Grills

‍

Episode Transcript:

Brett:

Hello, and welcome to another edition of the eCommerce Evolution Podcast. I'm your host, Brett Curry, CEO of OMG Commerce. Today, I am delighted that we have a very successful e-commerce merchant joining us on the show. He's going to tell a little bit of his story, how they got started, what they did well, what they maybe should have done differently, things they had done sooner. It's going to be a lot of fun. We're also going to dive into what has become one my favorite topics, and I think one of the most important topics regardless of what your business is right now, whether you're a service provider, or an e-commerce brand. That topic is culture. How do we define, shape, protect culture. We're going to dive into that in just a little bit as well.

Brett:

I am so excited to welcome to the show Mr. Colby Bauer. He's the co-founder and CEO of Thread Wallets. What's up, Colby, how are you?

Colby:

What's up, Brett? Thanks man. I appreciate it. I'm just stoked to be on the show.

Brett:

Yeah. We had great times with prepping and chatting. Of course, we were geeking out a little bit about some e-commerce tactics and.. Then we landed on your research talking about culture and I was like, "Wow." We've really invested in culture over the few years at OMG. We thought, "Man, that would be a really good topic to talk about on the show." We're going to get into that as well. First of all, where are you hailing from? You're in one of my favorite states, although I've not visited the state more than just a couple of times, but where are you physically located?

Colby:

Yeah, we're in Utah. We're just at the base of the Rockies in a town called Provo, Utah, which is home of BYU, Brigham Young University. There have been, I swear, a million different startups coming out of BYU. The entrepreneurship program at BYU just breeds entrepreneurs. Utah has become such a big playground for entrepreneurs.

Brett:

It's a great little startup community, and yeah, so many awesome brands, Purple Mattress, and I know lots of others that have come from Utah. It's a hot bed, man. Hot bed of entrepreneurial creativity, and you are part of that community as well. Let's talk a little bit... It's always fun to hear the story and the background of what your company does, how you got started. Give us the quick rundown, the quick back story and then we'll dive into some questions.

Colby:

Yeah. Thread Wallets, we're starting to now brand ourselves more as Thread, today we offer wallets, of course, and wallet accessories, so lanyards. We have just recently launched a chopstick holder, which has surprisingly done tremendously well, phone cases. We're launching few new products. I actually can't stay it right now, but just stay tuned in the next month. We just launched cross body bag, so we're getting into the bag category. But it started as this really dumb elastic wallet idea. I was out in Hawaii in 2014. I was actually playing soccer at both BYU, and BYU Hawaii. I would transfer back and forth because there are different seasons.

Brett:

I can think worse places to go to school and in Hawaii.

Colby:

Yeah, really. Oh, dude. Yeah, it was epic. I went out there the first in 2013. I had lost my wallet to the ocean because I was just an amateur of being around the ocean. I'd gone then with my wallet, I lost it.

Brett:

The ocean will grab Apple watch.

Colby:

It's relentless.

Brett:

It's relentless.

Colby:

I know. One of these days we'll drain the ocean, we'll get all of our sunglasses, and watches, and wallets back.

Brett:

heard of it, this is totally off topic, I've heard of divers... and we live in Lake region where we are but there are places to cliff dive in and the lake's around us. I've heard of there are scuba divers just going finds all kinds of stuff. And actually I mentioned an Apple watch because this Summer we went cliff jumping with some employees and I did indeed lose my Apple watch.

Colby:

No. Such a bummer.

Colby:

Every now and then the ocean will gift back though. One of my buddies, we were just sitting on the beach and a GoPro washed up shore, and it worked and everything. Every now and then you'll get it back. But anyways, after I lost my wallet, I started the search online for a new one. And the wallet I had previously was very minimalist, it was just a leather wallet, I found it at Goodwill. Started looking and typed in, "Wallets." And it just was that never ending scroll of the same wallet pretty much that George Costanza-

Brett:

George Costanza.

Colby:

... fat, bifold, or trifold, black or brown. I just started looking at the category.

Brett:

And they will back problems if you sit on this wallet.

Colby:

Exactly. I started then typing in minimalist wallets, and I actually found a few. They were brand new on Kickstarter. You had to wait for them. And I ordered one, but in the meantime, I wrapped my cards in a rubber band, and actually fell in love with the functionality of a rubber band. Just as slim as you could get it. It got me thinking I just needed a little bit more security with that rubber band. So I actually went to a fabric store called Joanne's Fabric and just sewed up with my then girlfriend, now wife, in her childhood bedroom with her childhood sewing machine, I sewed up a better rubber band for myself. It was just a white sleeve. That's it.

Colby:

Then I started thinking, if I love this thing so much, maybe other people will. I also noticed at the same time that most wallets like I mentioned, were very just boring. And my personality and my style, fashion choices, and the brands that I love are very expressive. And so I thought we could probably start to, if we could find a way to put on some really fun prints and colors I think we have a category here that just sitting there ready for innovation that we could actually start getting our foot in the door with.

Colby:

There's a local company here in Utah called Beloved. And what they did was they printed on shirts, they would have like a full... the whole shirt would look like a pepperoni pizza or a big sloth face or something crazy. And so I was so curious to how they printed because they could print any color. There was no limit on number of colors, and that was my biggest... my biggest thing was, I didn't want to feel limited on what I could put on the wallet. I actually just... I bought more of that fabric from Joanne's and I pretty much walked into the headquarters here and I seriously, unannounced, just walked in and there was one of the interns was actually... it's a heat press that allows you... It's called sublimation printing.

Colby:

He was there at the heat press printing these shirts and socks and things. And I asked him if I could try printing on this lastik. And he's like, "Sure, go ahead." I was like, "Well, before I do, I have no idea what's going to happen. Like maybe this elastic melts all over your heat press." He's like, "Dude, just go for it." And I was like -

Brett:

It's like, "I'm an intern."

Colby:

Yeah, he's like, "Dude, I'm gone in a month anyway."

Brett:

Yeah, I'm out of here. That's awesome. And so to explain this just a little bit. I've mentioned on the podcast before, I coached basketball, I'm retired now but I learned about sublimation in ordering uniforms, and shopping for uniform. So the difference is sublimation prints in the fabric. The printing goes into the material, whereas other types of lettering for uniforms or whatever just sticks on to the material. So sublimation gets into the fabric.

Colby:

Exactly, yeah. I went in without that knowledge, just wondering what was going to happen, and we pressed it and it came out perfect. I was stoked. And I used just one of their one of their prints they had. It was a one of those poop emojis, the smiling poop emoji and it was just like a repeating pattern of that. And so I was like sick. I went home, sewed that up and that was my wallet. I remember on my way back I had a business partner at the time and I called him on my way back, and I was like, "Dude, this is it. This is the solution to making the minimalist wallet fun and expressive." That's where we fit. That was where our product market fit. Was functionality, and combined with expression.

Brett:

Personality.. Do you know what happened to the intern? Is the intern still around?

Colby:

He's gone, dude. No, I don't know. I have no idea.

Brett:

Thank you, intern for-

Colby:

Yes, exactly. I should have hired him right on the spot. Anyways, yeah. So that was when I would say the doors flew open as far as like me being able to see this vision for what Thread could become. I knew that we were always going to start with wallets and that later on, we would expand that product line. But it started with that wallet, and it remained just that Wallet for two years. My wife and I did the production in house, we did the fulfillment in house. And then not until about two, two and a half years, we launched a second product, which was not a wallet, surprisingly, it was a lanyard.

Colby:

It was a complimentary product because we saw most of the females that were rocking our wallets were wearing a lanyard, but they were using one of those crappy lanyards from a convention they got. And so we wanted to make it matching and a little bit higher quality. Started selling those, and now that's our top seller. But yeah, over the past five years, that's in a nutshell. There's a lot of other micro stories there. But that's pretty much how Thread got started.

Brett:

I love it. It's a great product. And just like with all good e-commerce stores, and good marketers, I encourage everyone to go check out site, see how they're positioning products, and how they're marketing it. They really are some fantastic, functional, fun, personality driven products. Let's talk about a few things. As you look back at how you get started and what you got right? What are some things that either by dumb luck or by choice, what are some of the things that you got right? Some of the things that worked just really, really well, in terms of driving traffic, and getting sales or website designer or any of those things?

Colby:

When I was deciding on a product, I had racked my head around... I was an entrepreneurship class. I loved entrepreneurship, and so I was constantly thinking of ideas, I'd come up with multiple product ideas a day. And one of the things that I put through the filter was, is it small? Is it easy to ship? Is cost of goods low, is margin high? And can I sell this to business to business, and direct consumers? So those are the filter that I put it through. I think I lucked out on some of that, I think I'm giving myself maybe too much credit there on being so intentional with the product. But ultimately, those are the, now when we look at new product, we think those things.

Colby:

I think choosing the right product, as far as the silhouette is so important. But then also the category specifically because if you look at most 100 million dollar D2C brands, they're based around one category that has an opportunity to grow into a bigger category. Where we started was not where I envisioned it to turn into. I always wanted it to be backpacks, and duffels, and phone cases, laptop cases. I wanted to own the carry category. Carry and carry accessories. But in order to get there, you can't compete against the millions of other backpacks in the world. That's not going to happen. So you have to find your foot in the door.

Colby:

For me, that was wallets, and I think that's something we did really well. And we captured that market. I remember early on, we named it Thread Wallets. That's the actual legal name of it. One of my buddies was like, "Well, dude, why are you going wallets if that's your vision? If you want it to be something else where you're going wallets?" I thought, strategically, we need to keep wallets on there because that raises our hand above the crowd. This is what we focus on. This is our niche, we own it. And there's no ambiguity of what we do it's just very clear. "Okay, that's what they sell."

Brett:

It's your company. What is it? Yeah. I think you're spot on. If you look at other really successful direct to consumer brands, let's take Bonobos as an example, they started by perfecting men's khakis. They had similar experience to you in that most guys khakis don't fit right, and you look like an old man. Khakis don't work, and so they developed a better khaki and they did really, really well with it. And then of course that lended itself well to designing shirts and getting into women's jeans and other things, but to begin with, it was just men's khakis. I think the same thing can be said about something like Warby Parker where you're just like-

Colby:

Oh, dude, yeah.

Brett:

Direct to consumer, eyewear now that you, of course, all kinds of eyewear and other spin offs, and things like that. I think it's really smart. I like that criteria. No, that's not the only way to find a winning product, right? But some of the criteria laid out totally makes sense. Easy to ship. Lightweight, good cost, good cost of goods. So all those things really, really important. What about from a marketing standpoint? What did you guys do well? Sounds like there's a lot of grassroots stuff in the beginning, which is really fun. But what else did you do well from a marketing perspective?

Colby:

We start early on, Instagram was very new in terms of influencer marketing. And we rode that wave so hard. Before you saw a sponsored post, every freaking post, it was very far and few in between. And so people didn't realize that it was even sponsored to begin with. We rode that and I think we-

Brett:

.. your product photographs well, and you use at the beach or whatever, it fits into that aspirational lifestyle photography.

Colby:

Absolutely. Yeah, I think that it starts there. Is the content that you're putting out there. Our society became very photo heavy, very photo centric. And at the time, it didn't really matter how quality it was, but the fact that you're putting out content consistently made sense. We would outsource, basically, photographers through trade. We started just sending product to every influencer and photographer we could find, and then we started getting a ton of content. And so now we had this just a plethora of content to be posting. Our content marketing was strong, our influencer marketing was strong.

Colby:

And we started doing things that maybe aren't scalable, but it needed to happen in order to get the ball rolling. And that would be that will pop up shops at random coffee shops and other restaurants, or on campus or whatever else. We started doing those things, and really starting to build kind of more of a local community. But that community helped grow a larger community. I think we're fortunate enough, because at BYU in Utah, it's kind of a melting pot because it's a religious school. It's not like, the majority is just Utah based it actually you're getting people from all different states. And so when you build that local community immediately starts to expand out of your state. And we did some of that intentionally. We started to build that local community, but I think-

Brett:

.. very quickly, because it gives you mentioned, and I don't want this to slip away. Sometimes to scale, you have to do things that are not scalable. And sometimes activities that are not scalable, fuel things that are scalable, and that's where like that pop up shops, going to events, meeting people in person, which I know is difficult now, but.. But doing those things that don't feel scalable, they fuel things that do scale. A lot of people skip that because they just want to go... And I'm an ad guy. I love ads, and so we .. They will just want to focus on the scalable stuff, and they miss out other big opportunities.

Colby:

Yes, I would agree. And sometimes, like you mentioned, the things that you're doing that aren't scalable, aren't necessarily for scale, or even for a return on the spend, sometimes for us, what was kind of unseen was doing those things in person gave us that face to face feedback, and that interaction with our product in person to learn what people wanted, and why they wanted it. And so then we could take those learnings, we could adapt the styles, the art that we put on the design, maybe even the product itself, the way we messaged on ads. We started to learn our customer, and that is, I would say the most valuable thing you can learn before you can scale it.

Colby:

You need to understand who's buying and why they're buying it, then when you take it to say ads, digital ads, that is scalable, you can do that quicker, you can do that just more intentionally. I think that's some some of the things we did well as we started to learn who our customer was because I'm not the... I would say we're 80% female right now, I'm not that 80% female. My wife was, and is and so it became natural. Our marketing of pushing this lifestyle of like on the go, freedom chasing, fun having, surfing, skating, snowboarding, those types of outdoor activities, that's what we did, and still do, and that makes sense. It's easy. When you're trying to fake it, people can see through it. I think that's probably the key ingredient to any marketing is just understanding who, and why would they would even buy.

Brett:

Absolutely, I think one of my favorite marketing quotes and it's pretty old now, but it still applies, again in Gary Bencivenga, as someone who's a great copywriter. He said that free is no longer the most powerful word in advertising because for a long time it was like, "Hey, use the word free, that gets attention. And it's the most powerful." But the word for, F-O-R, is the most powerful. Meaning really your job as a marketer is to say, "This is for you. This was designed with you in mind, and your personality, and your needs, and everything related to who you are, this is for you." No one cares really about free, and maybe they like free, still cool, but totally lines up with knowing your prospect, delivering what they want, communicating in a way that's authentic. Really powerful.

Brett:

Let's talk about a couple of things you wish you had done sooner? We'll chat about this for a minute and we'll get into culture. But what are some things you... either mistakes made, or just things that like, "Man, if I'd known that from the get go, we could have grown quicker maybe."

Colby:

Oh, dude, that is such a good question. If I could go back in time and tell myself, "You need to get production off of your plate right now, outsource it, then I would have saved myself a lot of stomach aches, and a lot of years. I'm actually ironically sitting in the office at my in-laws house that it actually began. I'm looking over here at the the wall, I actually put a hole on the wall with one of the machinery that we were using to produce. I look at that scar and like, "Wow, we've come so far. I'm so glad I don't have to do that anymore." But that one-

Brett:

your in-law's cool with leaving -

Colby:

It's behind the door, he can't see it.

Brett:

It's awesome.

Colby:

Anyways, yeah, outsourcing production, that one seems like it's a no brainer, unfortunately, people are forced to outsource production. But that one we held on for way too long. We also held on to fulfillment for way too long. We held on to bookkeeping for way too long. I was stressed wearing hats that I didn't actually feel qualified to even wearing, and honestly, me doing the bookkeeping while we couldn't really justify affording a bookkeeper at the time. Now I'm looking back and I'm realizing I can't afford to not buying an outsourcing bookkeeper because me doing it got us into bad holes, and bad habits. And it took a lot of time to get out of that hole.

Brett:

There's a right way to run your accounting, following things like GAP, generally accepted accounting principles, and other things. Also, if you're ever thinking about keep and maximize value. There's a right way, and a wrong way to look at accounting. Even something like cash versus accrual accounting, and accrual accounting is the way to go for e-commerce in most cases. Even just having some of those things, I 100% agree. And I'm talking like I'm an accounting wizard, I'm not..

Colby:

But you know how important it is to give it to somebody who is, right?

Brett:

Yeah. Because you have a couple years of really bad books and really shaky. It takes a couple years to recover from it in some cases.

Colby:

Totally. Yeah.

Brett:

So very much worth it. Absolutely.

Colby:

Yeah, we lucked out. I didn't put savings aside for our at the end of the year. And I looked at our tax bill, and it was like we didn't even have the money in the bank to pay. We lucked out so big, we went to a holiday market, and we made within $10 of the amount that I owed. It was divine, for sure.

Brett:

Absolutely. But not everyone -

Colby:

Those are the holes that I lucked out getting out of. Sorry, go ahead. What was that, Brett?

Brett:

I'm just saying not everybody can do that. And so that just underscores so cool that you guys had that experience, and were able to recover from, but not everybody can do that. It just underscores get your financial house in order. Cool. Other things you wish you had done or learned sooner?

Colby:

Yeah. I would say one more. There's plenty, but the one big one is we hired an ad guy. We called him our ad guy, and he was working a corporate job, and he would come home at night and work on Thread for us. He in his corporate job he spent millions of dollars for a big company here in Utah called Viven. He got to learn spending millions of dollars on this account, and then apply his learnings to Thread. We structured a contract with him that incentivized him to make us money, profit. And I think that was crucial in our success because we didn't have capital, we didn't raise money. We had to be profitable.

Colby:

I think I waited a little bit too long to really get him on full time. And we gave him equity in the company. I would do that again, and again, and again. Because when you have somebody who's invested in your company long term running ads, they're spending your money as if it's their own because technically it is that their own as well. That alignment of goal for the long term play was so crucial in our success early on, I would do that again. If I could go back in time in the... I hired him, I think our third year, the beginning of our third year, I would have hired him... I mean, I didn't know him, but I would have looked for a ad guy, "ad guy" in the first year because that ads strategy in getting-

Brett:

..incentivize in the way you did where you're really focused on profitable growth.

Colby:

On profitable growth.

Brett:

They're incentivized to hit that profitable growth. Yeah, why not start sooner?

Colby:

Yeah. I think that's the one we lucked out on big time. I listened to a million podcasts and read a million articles, I'd wake up at 5:00 and do that whole thing. But I didn't know what I was getting when I got... his name is Logan. I think I just lucked out big time, which is finding the right guy who's passionate, and smart, and trustworthy. Those things that you're looking for in an ad person, or just a business partner in general, and/or agency, if you're looking at like an agency. Those are the things that you should be looking for. They should be aligned with your long term goals, and not just a short term play, and they make a quick, quick buck, you make a quick buck, that never really works.

Colby:

I think, your partner, you have to really fill it out and make sure that they're aligned, and that you guys are just on the same page. Yeah.

Brett:

100% agree. I think this is so important in every position, and especially on the marketing side, whether you have a freelancer or someone that you make a partner, or someone that you hire as an employee, or as an agency, how do you structure the deal so that everybody's incentivized towards the same goal? And if you can line that up, beautiful things happen. I think it's a great point to kind of pivot in the discussion, and let's begin on that path of talking about culture, and team, and even kind of life as a CEO. We'll see how much we have time to get into, but you have kind of a unique philosophy in terms of equity, and how you share equity with some of your executive team.

Brett:

This is one of those was really interesting topics. I'm part of the war room that Roland Frasier, and Ryan Deiss run. They talk about there's strategic ways to use equity, and some people are very much anti, non avoiding any equity. Other people see the value in partnerships. I'm more on the value partnership side of things. But how do you look at equity, and why do you think it's a good idea to consider equity for your executive team, at least?

Colby:

I've always said that you want the Forty-Niners on your team, not the football team, but the actual Forty-Niners during the Gold Rush, the Forty-Niners were the people who actually got to the gold. They were on the site the first, and they ran and they didn't look behind and they just went for it. Those people, the Forty-Niners were in essence, entrepreneurs. They didn't go through this A plus B equals C route of life. And they instead they were searching for their own goldmine. To me, I've had opportunities in the past to work at my dad's financial advisory firm, I had opportunities to play professional soccer and then I had this stupid wallet idea that for some reason I wanted to pursue, and I wanted to find walls on one hand sitting on a goldmine being able to take over my dad's firm, something about that was just not fitting with me.

Colby:

I thought I wanted to go find my own gold mine, I didn't need someone to tell me, "Here's the gold mine. Here's the shovel. Now you just got to dig." I actually liked the adventure of finding. It's not even just about the gold, it was more about the adventure to find it. I guess back to your question, you want people like that on your team, especially your founding team, or your executive team because those are the types of people who are problem solvers. They're leaving behind a traditional lifestyle for something out of passion and not just money. Giving them and rewarding them with equity, in my mind is giving them exactly what they want, and what you want. And that's somebody who's invested for the long term play. Somebody who's willing to take a lot lower of a salary for the trade of doing something they love, and that's creating something, and working together doing it.

Colby:

When I think of equity, it's less about a portion of my business, it's more about obtaining the Forty-Niners, and getting a founding team that I can trust that now it's not just my own mind, I'm not just relying on my own skill sets and mind. Now I'm being able to trust a team that's in it for the long run and for the benefit of the whole company, to make decisions and see it from all different angles. I think equity in our culture is oftentimes just looked at like a chunk of money and I think it needs to be looked at as like, a trade of getting the right people on board. And you can see really clearly when you put equity on the table, how someone responds to it, and then how they negotiate from there.

Colby:

That they're in it for the right reasons, they're in it for the wrong reasons. They're willing to make sacrifices early on, or they're not. I started early on, fortunately, I was forced, because I couldn't really pay high salaries that I had to use equity anyway. But that's my philosophy even if I had a million dollars to share amongst my founding team. I would still say, "Are you willing to take a lower salary for an exit in two, three, mean, eight years, whatever it is. And let's build this thing together?" And if they say, '"Let's do it, I'm on board." That's my team. I just use equity as more of a strategy to vet people out, and I landed on some really, really solid people that I just trust so much.

Brett:

That's awesome. I love it. I think if you look at it that way, that we're using equity as a tool to vet and find the right person also, to incentivize the right person, and to keep them with you I think that's the proper way to look at it. I think sometimes we get hung up on percentages. This business is our baby, we started it, and we get hung up on percentages. And percentages don't mean much really, it's the value of those percentages. And so if you can get the right people doing the right things and properly incentivize, you'd be way better off to have 90, 80, 70, 60% of a company that's just like a rocket ship versus something that you own 100% of and one of the things you said too, I think you have to balance these two.

Brett:

Sometimes we can get so focused on, "Okay, well, we're not hang up on percentage now, we just want to maximize value. And so I'm going to use equity, and I'm just going to try to get players that are incentivized by equity." That can be okay. But you can also run into issues. You talked about getting the right people and how fun that is. I think you have to look at it that way too. Are we attracting somebody that we want to work with, and that our values are aligned, and where this is going to be fun to stick with this person and be in the day to day grind for five, six, seven years, eight years. You have to think about it that way as well. I think that culture piece kind of helps balance just the financial piece.

Colby:

Yes, I agree. Yeah. And I think the first step to creating a good culture is, and you mentioned this before our call, Brett, was hiring smart. People say, hire slow and fire quick, I would just change the word hire slow to hire smart. And then and not fire too quick, and maybe give people just some time to get into a rhythm because if you fire a quick, you might be firing some of your best employees. In fact, I've come to find that while being somewhat patient and putting some resources to developing somebody has proven for us to watch somebody bloom and step into a position that I probably would have never been able to find someone as good for.

Colby:

You might be firing someone too quick. But hiring smart is the first step to developing a great culture. And so it our process, I could walk you through our process of hiring, it's kind of boring... it's all that tactical stuff can get boring, but ultimately, you have to be intentional with how you're going about hiring, whether that's interview process, I think you mentioned a few things too. But we do like a three month trial period where we just see how they meshed with the team and how and on a personality level and also on just the workflow level. There's rules and things you can put in during that hiring process that will ensure a good culture that instead of hiring the wrong person, which you're going to inevitably do that it's really difficult to try to fix a mistake than it is to just do it right the first time. I think that's the very first time.

Brett:

.. first place... where's the place to identify culture, and culture fit in the hiring process? We wanted to walk through the whole process because that can be hard to just listen to without seeing something visual, but what a few of the things you do to spot culture fit?

Colby:

One of the things that I do is first... I mean, we have a relatively small team or 22 people. But I interview every person that that comes into Thread, but I never look at their resume first. There's the two part interview process. One is from the department head. So whoever that is, they interview, and they can look at the resume if they want, I encourage that because there's something to say about skill sets and experience. But I don't personally Look at that. When I when I interview, I'm not looking at skill sets that should already be checked off. What I'm looking at is our core values, the number one core value, and the overarching characteristic amongst everyone on our team is humility.

Colby:

With humility comes everything else in my book. If you're humble enough, you're going to learn, you're going to put in the work to figure out. You're going to be ambitious, you're going to be a problem solver, you're going to be proactive. You're going to be apologetic, and take responsibility. And so humility is at, I would say the core of hiring. And so those are the things that I'm looking for. And you can sense humility in somebody, it's somewhat hard to fake humility. When I ask questions, I'm asking them stories about their life. I just want to hear them talk about their accomplishments, and their life, and their family, and what's important to them because that gives me a good sense of, are they humble?

Colby:

Also, like I mentioned, another characteristic is Forty-Niners or we just call entrepreneur, they're entrepreneurial. So they are ambitious, they're goal-oriented. They don't need their handheld, so they're self motivated. If they if I wasn't to micromanage, which I can't do, and nor do I want to do, they would get their crap done. And that's another, I would say, the next biggest characteristic. They're honest, that's another one of our core values. I look for honesty, and that's when I call their referral... what do you call that? The background check and their referrals.

Brett:

References.

Colby:

Yeah, the references, thank you. I the term. I call the references and just ask about is this person honest? And how did you enjoy working with them? I look at those core values before hiring. I think that's a trick that I learned from the founder of Stance, his name's Jeff Kearl, he said, "I never looked at the resume, I don't care to look at that. I'm looking to see if there are cultural fit from a personality standpoint, and a character standpoint." I think that's really important because too often I think companies are hiring solely off of experience and resume.

Colby:

In fact, I've heard companies hiring without even meeting them. And in this day and age, sometimes you have to do that virtually, but without even interviewing, they just look at the paper and they go, "Oh, cool. This person went to Harvard Business School they've worked at Microsoft, done." And they're, on board, it's like, so they have no idea about that person, you have no idea who you're hiring. I think that's the number one step in our process.

Brett:

That's awesome. I'll outline a few of the things that we do at OMG because I guess would be good to interject here, and just good for people because I don't talk about this a lot on the podcast, but we're a team of 42, 43 right now. And so we were talking before we hit record about how do you keep and maintain culture, and especially if you're growing rapidly. The tendency is for culture to shift or change, or you lose you're who you are. We do hire for culture first, but our processes... And we look for talent skill, of course.

Brett:

But we have someone thought application, of course, but also they do a personality survey using this tool that I can talk about later. It's fantastic. We also have them do an exercise. We get these exercises, whether it's Google ads, or the Amazon side of our business. Someone has to go through this fake project and tell us what they would do to grow this client, we have an exercise that we review. Then we have a team member who used to interview for the school system, and she does like the initial interview. She's just got a real sense for who's a BSer, and who's got a good attitude, who doesn't, that's the first. Past that, and everything surveyed, everything's good, then our COO interviews, and she's got a real knack.

Brett:

And if it looks good, then I interview, and then kind of the final step is we have a team. We bring in the team that's going to work with this person to interview and what's so interesting is, occasionally, and this happened recently, where someone got through all of it, even my interview, and I was talking to our COO, Sarah, after my interview with this candidate, and I said, "I think she could do the job, she's really good, but there's something about her. Just like a gut feeling, something about her." So anyway, then the interview with the team happens. I kid you not, where there's like eight people in this interview, which can be overwhelming, but I think the truth comes out of those situations.

Brett:

Someone asked her about like a previous bad experience. And she's like, "Well, I was in this last job where half my job was babysitting millennials." And then she went on this rant, and we're like, do you realize that 95% of people in the room right now are millennials? It's just one of those things where totally to your humility point. Okay, it was clear, this is not a humble person. This is a babysitter of millennials. Anyway, but that didn't come out until that team interview.

Colby:

Yeah, right.

Brett:

We could have sensed things along the way, but then it finally came out. That's why you need to outline process, and really.

Colby:

Yeah. Another part of our process really quickly is, like I said, we don't hire immediately, we just say this is a three month trial, and they're still paid and all that. But that trial, I think, lends itself to an easy layoff, or an easy hire. If it makes sense, it makes sense.

Brett:

I love that. A good friend of mine who runs another company with a development company does the same thing. And they reposition it from, "We want to make sure you're happy too. You need-"

Colby:

Exactly.

Brett:

" ... try us see if we're a good fit for you."

Colby:

Absolutely. Right.

Brett:

But it does... It create... and we don't actually take that exact approach. But I do like it. It also it creates an easy conversation. And everybody knows, at the end of 90 days, we're having this discussion to see, "Hey, is this working, or is this not working?" It's a really good setup. I like that a lot. What are some of the things you do... and we have five or 10 minutes here left. What are some of the things you do to make your culture unique? You've kind of shaped this company that really fits your personality, your style, and you're attracting people with similar values and stuff. But what are some of the unique things you do to maintain culture?

Colby:

Well, aside from work, which there's plenty of that. We, my wife, and I had a pretty gnarly argument last year about whether or not we should put a halfpipe in our office or not.

Colby:

And it was an ongoing argument.

Brett:

... and halfpipe. I think..

Colby:

Yeah.

Brett:

Gnarly.

Colby:

Yeah, it was gnarly, for sure. And it was ongoing. I couldn't figure out why I wanted it so bad, because, obviously, I think it'd be cool. There's a cool factor to it. I freaking love skating so that makes sense. But she had this argument that... and I think the reason why it pissed me off so much was because she was right. I was she was like, "It's not necessary." And I'm like-

Brett:

..lawsuit. It would be a lawsuit, yeah.

Colby:

Yeah. I'm so like, how do I work around that? She's right, it's not necessary. And it got me thinking like, "Why do I want this thing? What is it that it really... Why am I getting so pissed off? Why am I fighting for it so much?" And it got me thinking more. And I think what it comes down to is mental health. For me, I've suffered through quite a bit of a addiction runs pretty rampant in my family. My mom's now since I was born. And my dad also is just out of rehab. With that comes along a lot of like emotional roller coasters. Not to mention, when we started Thread we were newlyweds. So there's a lot of stress related there, and then you starting the company, and then now we have two little girls.

Colby:

You tack it on a lot of a burden. And so for me, my outlet is luckily not drugs or alcohol. It's skateboarding. And it's sports. And it's friends, and it's outdoor activities. For me skateboarding over the last six years has become more than just the sports become a therapy. I spend late nights, our office skateboarding with friends. There's community around the sport, there's creativity, there's this outlet that I don't have to think about work when I'm skateboarding, and that's what I need. I need that release because otherwise, as an entrepreneur, every entrepreneur knows, you're pretty much thinking about your business 24/7. Being able to have something where you don't think about your business is actually very needed in your business.

Colby:

What the halfpipe has become as a symbol of mental health because day in day out, I go on the ramp, whether it's for 10 minutes or not, I just get a reset. Step up from my desk, I go skateboard for 10 minutes, and I come back and that's what I need. And so me as a CEO sitting-

Brett:

That actually is still productive, I mean, some of the... and you're 100% right, I'm thinking about the business all the time. Sometimes you want to try not to, but sometimes the best thing you can do for your business, is to not think about your business. And it's also good, you got to prioritize mental health. I'm glad that mental health is a discussion that it's okay to have right now, that there's more talk around mental health, but it's been in the workplace as well. Really, really excited you're doing that.

Colby:

Yeah. And now it's got me thinking... one of my wife's had their arguments was, "Not everybody's skateboards, what are you going to do then?" And I'm like, "Yeah, and I'm not expecting everyone to skateboard, but this is for me, this is my mental health. And there's plenty of skateboarders in the office that will love it. And not only just in the office, but our ambassadors and our customers and things that could come in." Anyways, because I landed on mental health now we've put in... we buy ski passes for our whole team every Winter. And so wherever they... or we get them money if they don't-

Brett:

I wish we could do something like that here. That's awesome.

Colby:

Yeah. If it's a gym pass membership, then we fund that. And we put mental health as a priority because we know, first off friend a friend, we want our friends to be happy and healthy. They're more pleasant to be around. We just like to see that. But also from a business standpoint, when they come in and they're set, and they're happy. And they're taking care of themselves physically, and mentally, they perform better. We don't have office hours, nobody's required to come into the office ever. In fact, if you want to leave midday, and go mountain biking, do it, and we encourage it. When you can structure this like work life balance being so intersected, I think that's when people find mental health because they're not so compartmentalizing or segmenting their life that it's imbalanced, and you're constantly trying to find the balance of work and life.

Colby:

Instead, work in life should be so interweave. I'm just, for my own personal needs, Thread has become that. I'm grateful because I think... and I just did a survey with our team and asked them what they think of culture, and everyone minus one said 10 out of 10, the other one put nine out of 10. And it's funny because he's my brother in-law, that's why I'm laughing. But anyways, I just-

Brett:

Colby could be way better.

Colby:

Yeah, right. But I think that's so needed now. Is at least having that conversation that people are suffering from anxiety, depression, addiction, other personal issues that they don't need to be openly talked about in the office setting. But at least we need to be aware that people are going through those things and providing resources. And being sensitive to them, I think is so needed now.

Brett:

What's so cool, and we don't have a halfpipe, I am jealous of that and ski trips. But we do some similar things. And we do have office hours, we're pretty flexible. We have like... where we put a cap on PTO. And then some of the things that are kind of unique, but here's what's... Some of that stuff sounds scary, right? But here's the way this plays out. If you're hiring for culture first, and you're hiring those entrepreneurs as Forty-Niners as you talk about them, whichever like that. And then you create this environment where you're caring for them. And you've got some fun mixed in, and of course, it's challenging, e-commerce is challenging. Running an e-commerce agency is super challenging.

Brett:

Let's talk about we're a fun place to work, we're not an easy place to work. This is challenging work. But it's supportive. People really will thrive in it. The right people, the right people will say, "I love it here." I talk about this a lot where because I'm thinking about the business a lot, I'll sometimes drop into our internal Slack into a client channel and pop in an idea, or a question, or something. Sometimes that'll hit me at like 9:30, or 10 o'clock at night after we put the kids to bed, and I'll pop in a question. It's pretty frequent that somebody will answer me right away. And I've told them like, "Hey, if I put a note in here way after hours, don't feel compelled... You don't have to answer. I'm not expecting an answer." A lot of times they do. Just because they want to, because they care. I'm not going to stop you, but I am telling you.

Colby:

Yeah, right.

Brett:

Sometimes it's scary to have these kind of open, free, or freer. I know, with some companies, once you get to a certain size, you have to have certain protections and things in place. And certainly I get that, but I think giving people more freedom, for the right people usually pays off in the positive direction. We're out of time, but I want to close with a thought, there's someone mentioned to me, as we were chatting a few weeks ago, and I really like it and I've been pondering it a bit. But you said that... I don't remember if this was your quote or you read it somewhere, but the best CEO is a non-busy CEO. Do you want to talk about that just a little bit? I've got a couple thoughts there as well.

Colby:

Yeah, like I mentioned, with skateboarding, sometimes the best thing to do for your business is to just not think. But then a lot of what your business needs is for you to think because if you're not thinking then a lot of times people are so in the weeds that they can't think. What I mean by that being the best CEO is a non-busy one is a CEO needs time to think. He or she cannot be so in the weeds that they can't like really look at the problem or the future, and just let your mind think. I think that's where it roots because in the... actually still right now I'm doing things that are somewhat mundane. And I'm trying to delegate those things, because I know that there's other bigger fish to fry that I'm not getting to. I need time to just... and even though it might not look like I'm doing anything, sometimes that's all. I just need to sit down, think whiteboard, and not be so busy that I can't make the wisest decisions. Anyways, that's really what I mean by it.

Brett:

Yeah, I love it. And I just finished the book. It's a classic, written by Peter Drucker who arguably the best management thinker of our time or all time, but book called The Effective Executive. And it's a little dated in that the examples are pretty old, because the book was written in the 60s, I believe, late 50s, maybe. But it's a fantastic book. And it talks about uninterrupted think time, and blocking how you manage your time, and blocking it so that you can focus on something, the highest and best use of your time. What does the organization need, and you as the leader, as a CEO focus on the highest and best use of your time. I also love something that he says in the book that the relationship or the ratio between the top executives performance, and the rest of the team's performance is constant.

Brett:

So if you want to elevate everyone else's performance, elevate your performance, like that's the best thing you can do. I've actually been going through that, and I've been... Sometimes I get in the weeds too. Like I still love getting into some client work. And I'll never give that up fully, but I'm having to step back a little bit more. Remember, it's been a while now. But I was talking to one of the agency directors at Google, brilliant man called Reynolds Richie. We were talking about clients, he came to our office to visit with us. He said, "I'm surprised by you, Brett." He said, "You are in so many details with your clients. When do you find balcony time?"

Brett:

I said, "What? balcony." "When do you have time to just step up and observe, and think, and look?" And I'm like, "You're right. I need more balcony time." I think that's where some drivers, some Forty-Niners we incredibly full plate. But sometimes the best thing we can do is just back up a little bit, and think.

Colby:

Can I just share one more thing before we end?

Brett:

Please.

Colby:

Something I learned yesterday, a guy named Jeremy Andrus, he's the CEO of Traeger Grills.

Brett:

Yeah.

Colby:

You know Traeger grills? Yeah.

Brett:

..by Traeger Grills.

Colby:

Oh, cool. They're massive company. They're doing 700 million this year. He as a CEO, he said everything important happens before 8:30 AM. And I like that because his morning routine he set eight years ago and hasn't strayed from it at all. And that's something that I need, because like I mentioned, throughout my day, I'm doing some things that are still in the weeds. I don't really have the ability to think like I need I should. But he wakes up at 5:00, and before he does anything, he flips his phone over so that he can't see it. He doesn't want to know any of the text messages. Any of the Slacks, any of the emails or news articles that came out through the night.

Colby:

If he looks at those, he says it's game over, because the next thing he steps into is he drinks a big glass of lemon water. And he goes in prays and meditates. That time that he gives himself 30 minutes to just think and pray, that's his time. The world is slow, it's early in the morning. He's flipped over his phone. And now he's just thinking, and so he had to create time to think for himself. That was as really good for me to learn because I don't really have the greatest morning routine right now. Actually on my to do list today is to come up with what my morning routine is. And so I think, we try to justify and say we don't have the time, but in this example from Jeremy, he created time, and it's not distracted time. I love that.

Colby:

And he goes on, and he eats breakfast, he works out, takes us to the school. And then he's at work, and he goes through his work schedule. And then when he gets home, the first thing he does is he puts his phone up on a shelf, and he doesn't look at it or touch it until he puts his kids down for bed. That time with his family is also so important. So he created that time to be uninterrupted. I just thought those great examples of somebody who was so regimented, and is why he's doing so well. That's-

Brett:

Able to handle that kind of pressure. And that kind of growth, and all the things that come from running a $700 billion a year business. Yeah, I love that. I love that so much. I think one thing you mentioned, you struggle with routine, I definitely did as well, got better over the years. But I think there may be some people on the podcast, I think you and I are similar in some respects where I've got a bit of creativity in me. I'm not necessarily an artist, but I'm creative. And I used to just create variety. I had to have variety, like I couldn't even drive home the same way. I needed variety. But then I realized that in inside of schedule, and routine, you have more room to be creative.

Colby:

I love that. Yeah, it's so true.

Brett:

Yeah, put in that structure shows, "No, you can be more creative. You can think more." Get a little bit of structure. That was kind of a game changer for me. But it's a constant process. Just like looking at managing culture, it takes attention an effort. It's the same way like managing yourself, and your own time, and those things. Well, Colby, this has been a ton of fun man. I've thoroughly, thoroughly enjoyed this. For people that want to learn more, where can they find out about Thread Wallets? Are you active much on social media? How can they connect with you online?

Colby:

Yeah, for Thread, go to threadwallets.com, and Thread_Wallets, on Instagram. And then for me personally, and for my wife, who's my co-founder and CMO, we're both pretty active on LinkedIn, reach out to us there.

Brett:

Awesome. Colby, great job, man. It's been awesome.

Colby:

Thanks, Brett. I appreciate it, man. Seriously, I had so much fun.

Brett:

Yeah. Awesome. As always, we appreciate you tuning in. And hey, we'd love to hear from you. What do you what do you think about these podcasts? What are topics you want us to dive into? And if you've not left a review on iTunes yet, what are you waiting for? We would love for that as well, and helps other people discover the show, and it would make my day also. With that, until next time, thank you. All right, that's a wrap..

‍

Episode 142

:

Phil Roireau - Gorgias

Turning Conversational Commerce Into a Competitive Advantage

Conversational commerce. What is it?

Try Gorgias today and get 2 months free by mentioning OMGCommerce. Get started here!

Conversational commerce. What is it? Basically, it’s taking the in-person shopping experience of asking questions and talking to retail sales staff and moving it into multiple online channels seamlessly. Today shoppers want to interact with you in a variety of ways and they want near-instant feedback. Messenger. SMS. Chat. Facebook comments. Your customers expect you to be everywhere they are when they need you.

In this interview, Phil and I talk about some of the foundations of conversational commerce - both strategies and tactics. This will help guide all of your conversational commerce efforts. Here’s a quick look at what we discuss.

What components of conversational commerce should you consider?
What impact can conversational commerce have on conversion rates?
How to look at the dashboard and KPIs related to conversational commerce.
How this impacts your paid acquisition efforts.
Lots of real-world examples
Plus more

Mentioned in this episode:

‍

Gorgias - Customer Service Made Easy for Online Stores

‍

Phil Roireau - Executive of Partnership and Business Development at Gorgias

eMarketer Amazon Prime Day
Statista Amazon Prime Day‍

‍

Episode Transcript:

Brett:

Well, hello, and welcome to another edition of the E-Commerce Evolution Podcast. I'm your host, Brett Curry, CEO of O-M-G Commerce, and today we're talking about conversational commerce. What is it, how to form a strategy, how to execute on that strategy, and really how to make this count as we prepare for holiday/post-holiday/next year, all of these important events. How do we use conversational commerce to form better customer relationships to increase sales and to grow the business?

Brett:

I am bringing on the show today an expert in this topic, and he's with a company that is really leading the way in innovating, in a lot of ways, around conversational commerce. I'm talking to Phil Roireau. He's the Exec for Partnership and Business Development at Gorgias. And, so, with that, Phil, man, welcome to the show and thanks for coming on.

Phil:

Yeah. Thank you so much, Brett. Pretty excited about helping brands use conversational commerce in order to grow theirself. That's, really, the bottom line of it.

Brett:

Yeah, me too. I'm excited to talk about this. This is not one of the areas of e-commerce that I deal with on a day-to-day basis, but it is growing. It's extremely important, and, so, I know that the topic we're going to talk about today will really help our listeners out.

Brett:

Now, I was first introduced to Gorgias, I believe, a few years ago. I was at Sellers Summit. My buddy, Steve Chiu, runs -

Phil:

Yeah.

Brett:

... out of it, and you guys were there. You were maybe speaking there. I know you were exhibiting. I thought the name was cool. So, that's how I think I first got introduced. And, man, you guys have just been blowing up. I'm hearing about you... Like you, I'm part of several e-commerce groups on Facebook. People are talking about you. So, you guys have really made a splash on the e-commerce scene, which-

Phil:

Yeah.

Brett:

... I want to applaud-

Phil:

Thanks for that.

Brett:

... you for that.

Phil:

Thanks for that.

Brett:

Yeah.

Phil:

We came a long way since we first met a few years ago at Sellers Summit. It was a different level of company back then. But, a lot of things in the Shopify ecosystem moves really fast.

Brett:

Man, that is so true. Everything in this industry moves fast, but, yeah, the Shopify ecosystem... It moves about like their stock prices, really fast. It's like three years ago the stock was nothing and now it's like blow-your-mind..

Phil:

Yeah, yeah.

Brett:

... type of growth.

Phil:

And we're September 4th when we're recording this. They're down 10% today.

Brett:

Yeah.

Phil:

I'm sure they're going to have those nights more, but I love moving fast like 10%.

Brett:

Right, right, right. So, yeah, and by the time this comes out who knows what the stock will look like. But, it's been a crazy ride-

Phil:

Yep.

Brett:

... over the last several months and crazy growth over the last several years, for sure.

Brett:

So, let's do this, Phil. Let's sight in and let's just explain... Because I think once we break down the components, people will be like, "Oh, yeah. I'm thinking about some of those things," but maybe this idea of conversational commerce may be a new concept for people.

Brett:

So, first of all, what is conversational commerce?

Phil:

Yeah, so, conversational commerce is really about helping buyers make their decision through one-on-one realtime interactions. It follows your marketing strategy. So, where are you going today to engage with potential buyers? And, then, it's really about having those conversation channels behind those marketing channels open for your clients to get in touch with your team and, at the same time, your team needs to be hyper-receptive with different type of messaging depending on where the clients are interacting.

Brett:

Great. I love that.

Brett:

And, so, if you think about some of your marketing efforts, some of your advertising efforts... As you know, we do a lot with YouTube and Google ads and Amazon ads... Some of those efforts, they're one to many, right? We're trying to reach an audience or a group of people or a list of people and, certainly, we want to segment and make those messages as relevant as possible and want those messages to feel like it's one-on-one communication, almost. But, it's not, right? It's advertising. It's not one-on-one. And, so, conversational commerce, that truly is that one-on-one conversation.

Brett:

So, talk about... I know this is, kind of, a multi-channel endeavor. What are some of the channels where we're engaging with our customers one-on-one?

Phil:

Right.

Phil:

So, well, you mentioned Facebook or Instagram or YouTube. Those are all great channels where you must have that part of your conversational commerce driving. You're creating ads that are very engaging and people start commenting on it, and there's common that are coming back in those comments. How are you engaging there with them? How are you helping your customers on your ads make the decision to purchase your product or replying at scale? And, so, it's really about, yeah, breaking down that one-to-many channel and bringing it into a one-to-one channel when there is an intent from the customer.

Phil:

So, you're making an ad. Somebody replies or a hundred people replies. So, then you need to transform the message that was created from that ad by the customer into a conversation.

Phil:

You're doing, let's say, a Chat Campaign. So, somebody's on your website with a specific product and you're like, "Hey, I see you're looking at those women shoes. Those shoes are great, and usually women go half a size up. Let me know if I can help you choosing the right pair for you." But, this message will be sent to a thousand people, potentially on the day on your best seller page. But, then, people start interacting with different questions. But, they are a team again, so it's really about being ready-

Brett:

Yeah.

Phil:

... at scale to create those personalized interactions.

Brett:

I love that, and, actually, I want to circle back to the interactions on Facebook and Instagram ads in just a second.

Brett:

But, to use the example you just gave... So, I think we're all seeing this more and more, even our agency uses Chat on the website to interact with someone as they're there. But, I think having that specific example like you talked about where if someone is on the Women's Shoe category on your Apparel store, and you could pop in with a message saying, "Hey. Glad you're here shopping around. Welcome. Just a heads up, they run a half size small or large," or whatever the case may be. "Let me know if I can be of any assistance." Having that specific of a feedback, really, I think it helps with engagement and helps people want to talk.

Brett:

And anytime I think conversational commerce, I think retail store or trade show or out in the marketplace where the seller and the consumer are interacting and they're having a little dialogue, but it's a useful dialogue. And it's one of those things where you come into a physical brick-and-mortar store and the shopkeeper... And that's an old term, obviously... But, the sales associate or whatever is like, "Hey. Anything I can help you with?" "No, no, no. It's fine. I'm just looking around." But, if they see you're looking at something and you say, "Hey, I see you checking that out. Great. Just a couple things to keep in mind as you look at it..." That probably will spark a question, right? So, that specific interaction is really cool.

Brett:

Anything you can share on that, like how to make online Chat better and are you advising people to lead with specific questions like that example you just gave?

Phil:

Yeah, absolutely.

Phil:

So, just to reinforce what you said... Six months ago, COVID hit big time and, then, a lot of people get worried. Retail stores get shut down, and some retailers go online as fast as possible. So many of our clients... And we on-boarded well over a thousand clients over that first three months of COVID-

Brett:

Dude. That's crazy.

Phil:

Yeah. It was nuts.

Phil:

But, so many of those conversations were about, "Hey, my retail store is closing-

Brett:

Yep. Yep.

Phil:

... I need to go online," and we're like, "Yes..." So, conversational commerce, at the core, specifically what it is, it's about getting back to that... It's retail-like experience to your online shop. That's really what it is.

Phil:

It's, as you said, like walking through the store. "Hey, welcome, and, if you're wondering, in that section there in that corner, there is a sale on the woman dresses." And, now, you're leaving that person alone, right? And, then, the person walks toward, let's say, that section is like, "Oh, now I see you're in the woman dress. Here, this model could fit you well. But, let me know if you have any questions?" "Oh, yeah, and I have a question," right? And, then, they're walking to the cashier and you're like, "Hey, have you found everything you were looking for today?" Just that question. Those three questions, right?

Phil:

You're walking in the store, you're looking at a specific section, and then you're checking out. Those are three key moments in the retail experience. Now, bring this online with your Chat in your store: homepage, collection of product page, and cart page.

Brett:

I love this so much because... And, again, I'll use an offline example. You walk into Walmart and, especially, you're walking into Walmart anytime around the time we're recording this during lock-downs, after lock-downs, it's pure chaos. It's not a bad shopping experience. But, usually, you see a Walmart associate. They're not eager to help you, right? They may not make eye contact because they don't want you to stop them and stuff. If you ask them a question, they may be like, "Yeah, the milk is back in the back," or whatever-

Phil:

Yeah.

Brett:

... versus one of my favorite local shops here where I live in Springfield, Missouri... It's an outdoor home store, so they sell outdoor furniture, but they also sell barbecue grills and barbecue grill accessories, and you walk in there and they really want to help you, educate you, take care of you. You walk to a certain section of outdoor furniture, they can tell you exactly how that furniture is made and what it does and why it's unique and they're passionate about outdoor furniture... I love to grill and, so, I used to call Greg, the GM there, my Grilling Yoda because he was always teaching me stuff about grilling... But, those people, you interact with them and that creates a competitive advantage. They're priced higher than most of the people other places that you could buy. But, I still like going there because they help you out.

Brett:

And, I think, this is a competitive advantage that you can create on your store that other big e-commerce stores or other small e-commerce stores are not going to do, and it greatly enhances the shopping experience, but it also increases the OV, improves your conversion, all of those things it really helps with. So, it's super important.

Brett:

So, I want to talk about those three areas you mentioned. So, homepage chat, category page chat, and, then, cart or checkout process. Where do you recommend people start, and any specific tips in each of those three areas?

Phil:

Yeah, so, we already started going, pretty much, in the practical stuff.

Brett:

Yep.

Phil:

But, what you just said, again... And we did it rehearsed. What you just said is exactly the mindset that you need to have when you're creating your Chat and things on your site.

Phil:

And the competitive advantage, at the end of the day, you're a BTC brand versus Amazon. That's your mom-and-pop shop versus Walmart. They're all mainstream. So, it's exactly the same things. Why would people go to you instead of going to Amazon? Because of that service, that "where it is," that focus on a specific type of product.

Phil:

But, yeah. So, now, let's go into a little bit more tactical. So, a homepage... And just when you're walking into that owner-operated retail shop. Place yourself in the shoe of that guy. You're the best employee at the shop and somebody walks in through the front door of your store. What do you tell that person? It's as simple as that. So, that same thing that you would tell that person in your retail store, you want to bring this in your Chat Campaign.

Phil:

So, it's really easy and there are several tools. Gorgias does it, but there's other Chat widget that can do it, as well, and it's really okay. Homepage, you just put in your URL, either the sites put a search and timer on it, and then you have a specific message for that page, which would be the message that you would tell somebody that walks into your retail store and if you're the best employee that store has on his best day. So, put those two together, write this message once, and you're going to be sending it automatically to several thousand people over the next several days depending on your traffic, obviously.

Phil:

So, then, move on to the collection page or the product page. So, how many best seller do you have on your store? Three? Five? Take those three best sellers and take what are the main friction for buying this product from you?

Phil:

So, we started this episode with the woman's shoes, and what's the main friction for purchasing shoes online? It's, obviously, sizing. So, what do you want to do? You want to position yourself as the professional that knows everything about shoe sizes, and you want to have that objection-busting statement in your Chat Campaign.

Phil:

So, you're like, "Hey, I'm Phil, the shoe consultant for this store, and I see the model you're looking at. Usually women go half a size up or down on that model." And just reassure them that if they do this, they're going to get the right size. And, then, you're like, "Let me know if I can help you with anything else." Or if it's something else you're selling... Letter or full-letter or whatever. You're just like, "Hey, this one is made from cruelty-free letter-something."

Phil:

So, what are the main objections for people that purchasing this specific product? And, yes, it needs to be in the UI of your pay job. Just stick with the Chat Campaign as a great way to create a message that sounds like you and that will address that on your best sellers.

Phil:

So, it takes five seconds to implement and five minutes come up with the creative. Do that times three for your best sellers, go put that on your page, and see if you can get more engagement.

Brett:

Yeah.

Phil:

Because it's good to have that in the message, but, at the end of the day, the important thing is there is a reason why we're doing this. It's because we have the data that somebody that engages with your brand on Chat prior to purchasing is 30% more likely to purchase than someone that doesn't.

Brett:

Wow.

Phil:

So, you want to create those engagement opportunities, as much as possible, that are very specific and that will encourage people to talk to you.

Brett:

Yep.

Brett:

So, you start getting a higher and higher percentage of people that'll engage with you via Chat, and each person that does 30% more likely to convert than those that don't.

Phil:

Yeah.

Brett:

That's super powerful.

Brett:

And, so, then, I've got another specific question about Chat in a minute... But, then, on the checkout, the cart, that-

Phil:

Yeah.

Brett:

... process. What kind of Chat would you have available there?

Phil:

Yeah, so, on the cart checkout, it's a little bit more tricky. You want to make sure, first, before you implement that, especially on the checkout page, that you have your first-time response under control. So, you really need to be able to man your Chat in a way that's -

Brett:

Yeah.

Phil:

... has to work before you implement on that page because, then, it can backfire. If people start asking question on the checkout page and you're not there, adding this-

Brett:

Yeah.

Phil:

... they might not..

Brett:

Now there's nothing in there.

Phil:

... checkout.

Brett:

Yeah.

Phil:

But, there are services that you can check things like live recover and so on... These guys are in your checkout. They put the widget and it's a third-party service and they will put the Chat Widget on the checkout page and they guarantee you a less-than-ten-second reply time and an increase in conversion rate. So, there are even services that are specialized in this type of behavior.

Phil:

But, basically, on the cart page, you can have different things. If people are too long on the cart page and they're not moving on... Let's say you put the timer 15 seconds, they can be like, "Hey, did you find everything you were looking for today? By the way, use free ship or..." So, this guy is a little bit... He says the same thing right now like, "Let's give him an offer to -

Brett:

Nudge him along just a little bit.

Phil:

... move him along right?

Phil:

Yeah, nudge him on a little bit. Not too much. But, I think one of the best sentences really as simple as, "Did you find everything that you were looking for today?" People are so accustomed to hearing that.

Brett:

Yeah.

Phil:

And it's so reminding them of their retail experience.

Brett:

Yeah. Yeah. That's awesome. And, so, it totally makes sense, in the cart, you don't want to turn that on unless you're able to create a really fast response time.

Phil:

Right.

Brett:

And, then, you had mentioned the service that's kind of sub-ten seconds. I'm curious, what do you recommend? Is that a good benchmark? Should you say, "If I can't respond or if there's not someone that can respond to Chat live within ten seconds, then I shouldn't have it on at all?" or can you just, kind of, automate what's on other pages? Speak about that just a little bit.

Phil:

Yeah. So, I think, then, that speaks to the overall structure of your Customer Service department, though, because... And conversational commerce is really the third step and Chat is the third step in the world map to make your customer service great.

Phil:

First of all, you need to optimize and automate as much as possible. So, there are tools... Gorgias, obviously, is a great one... There's a couple other that can do a decent job at using your CMS, or Shopify, Magento data points to reply automatically to clients in certain circumstances.

Phil:

So, somebody asking you, "Where is my order?" by email or by Chat or whatever the channel is, the center, you should be able to provide them, pretty much in an automated way, their tracking number, tracking URL, and when their date shipped out, and stuff like that. So, "Where is my order?" If it shipped, then you can have a specific reply. If it didn't ship, you can have a specific reply, and those you can determine what people are talking about now by. And that's the thing that takes ten seconds to set up.

Phil:

But, if you don't want to bloat your organization, it's kind of the first step is you want to make sure that those three type of request that you get all the time, "Where's my order," "Can I return or refund this," you want to make sure that this is optimized, that part of it is automated and, other than that, that you have only a canned responses that include all the data from your CMS ready for your team to fire in one clip.

Phil:

Somebody asking you something, two plays, your first response should be really easy to get. So, that will unclutter a little bit your email support channel and things like that. And, then, after that, you can open up the other channels. So, social, definitely first, and the next one after... Once you get control of your emails, you want to make sure that you're monitoring everything that's going on in Facebook, on Instagram, and then you want to open up, most likely, a SMS-marketing service. So, you want to implement some SMS-marketing tool... Attentive is a great one, SMS Bump, Postgrid, Emotive, all of these tools... You want to pick one and you want to implement it in your business and you want to be on the receiving end of those messages that they are a little bit less time-sensitive.

Phil:

But, you're going to implement in that in-cart Campaign by SMS. If people are replying and they're like, "Oh, I didn't purchase because of this reason," well, you want to make sure you get that message and that you have somebody to reply to that SMS. But, that's the second step of achieving great customer service, and the next step.

Phil:

Then, once you have automated and opened all your channels, then you go onto your Chat.

Brett:

Got it.

Phil:

That's kind of like that three-steps approach to it-

Brett:

Cool.

Phil:

... doing it. Yeah.

Brett:

It's really good. So, we kind of dug in. We dug deep into step three right out of the gate because I was so eager to ask questions about some of those things.

Brett:

So, let's kind of back it up a little bit. Let's talk about some of the social channels and working on that and, then, going from there.

Brett:

So, you mentioned Facebook ads, Instagram ads, YouTube ads. What's really cool about Facebook and Instagram ads is it is viewed as a conversation for a lot of people and a lot of people will chime in and leave comments. Some of them are not so pleasant comments, unfortunately-

Phil:

Yeah.

Brett:

... but, at least gives you an opportunity to engage with that customer, that prospect, and talk about it.

Brett:

I will mention, with YouTube ads, we mainly run the pre-roll YouTube ads called TrueView. There's not a lot of opportunities to comment on those while they're an ad, but, certainly, you can with organic videos and in other ways on YouTube.

Brett:

But, what are some specific recommendations you would give on how to engage in those conversations on social media, and, then, why and how tools make that easier?

Phil:

Yeah. Well, great question.

Phil:

There's so much money that is left on the table on social media comments because, I guess, most of the time it becomes overwhelming really quickly .. And this is where you can unlock, if you find the key, you can unlock the most potential.

Phil:

So, let's say you're spending over a thousand dollar a day on Facebook. You're definitely generating a fair amount of comment. And, then, if you go beyond that, well, it's exponentially more. But, then, it's like how do you stay on top of what is important versus the noise? So, somebody that is trashing your brand or giving you love, how do you stay on top of these ones versus having to filter out through people tagging their friends or having some new private conversations and that is not really necessary for the brand to get involved in, right?

Phil:

So, there's really three topics, or three things, that are important for the brand to monitor under social media. First, it's, yeah, people giving you love online. So, if they're saying, "I need this, I want this, I love this, this is amazing," and tagging their friend, these people, I would say, they are showing a pretty heavy purchase intent right there. So, you want to make sure that you segregate or that you can isolate this and we'll get back to how to do it in one second.

Phil:

The second block is the detractors. All like, "Yeah, this ad, it shouldn't be shown," or, "This product, this crap," or, "I never got my order and fuck this company." Sorry, I didn't say that.

Brett:

That's okay. But, yeah.

Phil:

Yeah, so, then, this you want to isolate that, as well.

Phil:

And the third one is people asking questions like, "Oh, but, do you ship there," How much is it," "Do you have x-y-z color available?" So, there's really three buckets. Positive comments, negative, and questions. And all the rest, you want to just leave aside and not even look at. So, again, what we're doing with the leading brands right now is that we're using machine learning to detect those three sentiments.

Phil:

So, we have intents and sentiments that work together and that's, again, a set thing that's pretty easy to turn on. It's just like, hey, if it's on social media, Facebook or Instagram, and the sentiment is positive, tag as a social lead for your team to look as a priority. And if it's negative, tag it as a negative. If it's a empty intent is asking a question, then want to tag as a social question. And, then, close automatically all the other comments on your thing.

Phil:

So, when your brands are scaling you deep, then they can really keep an eye on what's important without having to shuffle to their Facebook back-end. Because I don't know if you ever look into an account that's scaling and try to monitor ], there's no way you can do this on Facebook Ads Managers in the back-end. It's like -

Brett:

Yeah, I could totally see it, and I don't manage Facebook ads, but I could totally see it. You get lots of assets going and you got tens of thousands of spend per day... It just would become a nightmare.

Brett:

And what's interesting about those three categories... Someone who's a good sales lead, a detractor, someone just asking a question... is it's possible you may have three different team members or three different people to respond to those, right? Here's the Sales Team takes the lead, right?

Phil:

Yeah.

Brett:

The Technical Expert takes the question, and then whoever's a ninja at deflecting criticism or -

Phil:

Just click hide it. The ninja at criticism, hide.

Brett:

It never happened. Yeah, exactly.

Phil:

Yeah. That never existed.

Brett:

So, what, it could be three different people. It could be the same person. But, that's super cool. And, really, that's advanced, right? The machine-learning is super smart, but that's relatively easy for a machine-learning program to be good at that and to get comments segmented in those areas so you can just focus all your attention there. And, yeah, what a beautiful thing to not have to do that in the Facebook interface-

Phil:

It's a blessing to do all this.

Brett:

Yep.

Phil:

Anybody that needs to manage, right now, customer service through Facebook back-end and their scaling, they know they're having a more doing it.

Brett:

Yep.

Phil:

And they are stepping on one another, so it's disorganized.

Brett:

Yep.

Phil:

It's pretty messy out there if you don't use a proper tool for that.

Brett:

Yeah. Absolutely. Absolutely. Love that.

Brett:

So, that's kind of the first step. What was step number two? You kind of highlighted that a minute ago, but let's dig into that a little bit.

Phil:

Yeah. In the same way, in the same vein as a social media comment, SMS has been the hottest channel of the last 36 months... No, maybe 24 months. Almost two years now that it became really, really hot. It started picking up steam at the beginning of 2019.

Phil:

So, that's really a fantastic channel because the first thing that you open up is the Abandon Cart sequence. That's the easiest. It's plug-and-play, almost, for most tools. And, then, you're starting and you're just re-targeting your Abandon Cart SMS. And it's great. And because that channel is so personal... If you look at the replies that people send to an SMS, they're going to tell you unlike any post-purchase survey that you'll ever do why they didn't purchase the product.

Brett:

Yep.

Phil:

You're going to be like, "Oh, yeah. Thanks for the reminder." "So, I didn't buy because you didn't have the color I was looking for," or "That the product was out of stock," or "Something happened," or "I was looking, actually, for another product," or "I didn't get my paycheck this week," or whatever is the reason. They will tell you.

Phil:

So, you just go in and you modify a little bit the script that comes out of the box in those SMS tools and you make it a little bit more personal. You're like, "Hey, I'm Jay, the founder of this company. I saw you were on your website, you didn't complete your purchase. Is there anything I can do to help you?" You do that as your first message instead of your blanket "Here's 10% off-

Brett:

Yeah. Exactly.

Phil:

... on your purchase," and that will change completely. If you do it at scale, you're going to see a difference.

Brett:

Yeah, I love that because what's beautiful about SMS marketing... And you're so right. Texting has been around a long, long time, right? Pre-iPhone and stuff.

Phil:

Yep.

Brett:

But, it's just now become a really en vogue marketing channel and it's very, very powerful. It does cut through the clutter. If you get a text on your phone, you're going to look at that text, right?

Phil:

Yeah.

Brett:

I get a text, I'm going to look at it. So, it's going to cut through the clutter. It can be highly personal, but that's a double-edge sword, right? It's also one of those things where... If I get a spam email, whatever, I ignore it or I've got spam blockers. But, I get spam text? I'm kind of upset.

Phil:

Yep.

Brett:

This is very personal. It's like you showing up on my doorstep and dinner time.

Phil:

Yeah. Don't show up in my inbox with a -

Brett:

Yeah.

Phil:

... stupid message.

Brett:

Yeah. Exactly.

Brett:

So, a message like, "Oh, hey, here, save 10%." "Well, why are you doing that?" Maybe I don't even want to interact with you. But, if you say, "Hey, I saw you were checking out and you didn't. Is there anything I can help you with?" That's a little more personal, likely a better spot to lead with before just sending a coupon or a discount.

Phil:

Yeah. Exactly. Keep the coupon the for the second SMS Abandon Cart. That's your Hail Mary.

Brett:

I've already established that I want to be on full and stuff like that. Yeah. Yeah.

Brett:

Cool. So, Abandon Cart. What else would you recommend on the SMS front?

Phil:

Yeah, so, the biggest challenge in SMS is growing your list, right? That's the main thing-

Brett:

Yeah. Of course.

Phil:

... because once you grow your list, the Abandon Cart, that's the most obvious. Then, there are some tools now that are starting to do pretty accurate Browse Abandonment... A little bit like you can do with your.. But, through SMS, that being said, you need to have the personal already up to date on your SMS to be able to fire this campaign. So, it's pretty challenging to do that, whereas in the checkout process, they put their phone number and then you can have that optic, right?

Phil:

So, when you're choosing your vendor, find the one that will give you the best chance at growing your list because that will determine the success of your campaigns. So, and then if you can do other flows... But, basically those flows are the same if you can do an email. But, having the people up-to-date is a little bit more complex.

Phil:

So, whatever you do with your Klaviyo, you can, at some point, replicate in your SMS campaign and you do it in that order, right?

Phil:

So, first, you'll do your Campaign Abandonment, welcome flow as a second one just like, "Hey, you're in a welcome flow," and then, after that, Browse Abandonment like post-purchase, "thank you," or whatever. Those are the four main ones that usually people will be able to pull off.

Brett:

Right. Love that.

Brett:

So, let's talk a little bit about the post-purchase side of things. What do you recommend there? What are some of the best practices or thought-starters on post-purchase? How should you interact with customers post-purchase?

Phil:

Yeah.

Phil:

So, I'm a little bit too much of a proponent of automation. So, maybe, I would say, automate everything you can with contextual answers.

Brett:

Yes.

Phil:

If somebody is asking you with, "Hey, how can I return this item?" Is a person within their return window? Did they purchase within the last 40 days and, let's say, that's your return window or are they outside? If they're outside, maybe you want to reply automatically, "Hey, I see you purchased on this date and that's outside of our return policy. I fear that won't be possible for that item. Is there something else I can help you with?" That's all. I'm a really huge proponent of having those messages. Also, "Where's my order?" Is the order in transit? Is it delivered or is it not shipped yet?

Phil:

So, those three scenarios will have different emails. If it's not shipped, it's like, "Hey, I see it's not shipped yet. It's in our warehouse," and then you can even put a time. Let's say, less than three days and not shipped. "Sorry, there's just a little bit of backlog now and it's going to be taken care of. You're going to get a notice really quickly." But, if it's not shipped and it's over three days, send them to Customer Service because there may be something to investigate there. Right?

Phil:

Same thing. "Where's my order?" Is it less than seven days and this is your maximum delivery window? Then, if it's less than seven days and it's shipped, give the tracking number, tracking URL, where it's going automatically like, "Hey, I see your order shipped out on this day. Here's your tracking number, tracking URL." If it's outside of your policy, send them to Customer Service.

Brett:

Yep.

Phil:

And so to investigate a little bit.

Phil:

And right now we're going into Black Friday, so it's, again, get your offers out and Customer Service is a great place to put your offers. We'll find a way to modify your canned response, add signatures at scale or something, with your Black Friday offers because what's going to happen during that period is your Customer Service inquiries are going to go, in general in the industry, they go up by 80%.

Phil:

So, our baseline last Black Friday was at a million message sent, Gorgias, per day-

Brett:

Wow.

Phil:

... and that was before Black Friday and during Black Friday was 1.8 million. And, then, we checked the data from the previous year and it's also an 80% difference pre-Black Friday to during Black Friday.

Phil:

So, during Black Friday means people probably didn't purchase yet. So, it's a lot of still pre-sale type of inquiries so get your offers in your canned responses and stuff at scale. And, then, what do you can do...

Phil:

That's really when you're at achieving the last level of the customer service ladder is you can track how much sales your Customer Service agents are generating. Are they reminded to put those offers in and to help really the customers complete their purchase? And, then, we can actually build... Well, actually, all build. So, if you're on top part of Magento, we can tell you how much sales are generated from your Customer Service agents in Gorgias. So, then, you can incentivize them like, "Hey, if you're closing more during Black Friday, you know how I'll give you a bonus."

Brett:

Right.

Brett:

And, often, just tracking it and being able to see it, that by itself will usually increase performance, right? So, your Customer Service agents being able to see the numbers themselves, see, maybe, their colleagues' numbers knowing-

Phil:

Yep.

Brett:

... that you see the numbers... That all by itself should cause a lift, at least from the right people, or maybe cause you to say, "Yeah, maybe we could do without this Customer Service representative," and, so, we'll promote them to their next career outside of our company. But, then, you can also incentivize and great contest and other things to really make that go to the next level.

Brett:

And the benefit of all of that is at least a better customer experience and then leads to better brand loyalty and growth and, yes, increase sales right now but also for the long-haul, which is really exciting.

Brett:

And, so-

Phil:

Yeah.

Brett:

... And one thing I'd want to do... And this, we could've led with this, but I think this is kind of better to step back and, now, kind of frame it all with this... I want to talk about one more concept and I want to dig into Gorgias because I want to nerd out a little bit on what you guys do.

Brett:

Let's talk about brand voice just for a minute. So, really your brand voice should infiltrate everything that we do here, right? Because, just like we talked about, there's a right way to do text message marketing, right? You get a text message from one company and you're super grateful and thankful for those relationship. You get, what feels like, a spammy, cold impersonal text from another company and now you're mad. Now, it was worse than before you received the message, right? So, how do you talk about brand voice and how do you recommend people use brand voice to influence all of these conversations?

Phil:

All right. That's a great question.

Phil:

And you're right. That's kind of the umbrella that covers a little bit of everything. Brand voice is... When you're creating your company, you should be thinking about that from day one. It's a part of your brand guidelines. You know your brand guideline has your logo, the type of font that you should use-

Brett:

Your colors -

Phil:

... your colors scheme, the pantones and everything. And in there, you should have a brand voice and tone statement, which is how do we want to sound to our customers and how would we want to behave to support our customers? Because just like you will send your brand guidelines to the agency that you're working with, your marketing agencies, and so on... You also want to send it... How do I need to sound as a brand? That's something that needs to become standardized. It needs to be authentic, but it needs to be standardized across your organization. And, usually, it's really about how and who you want to sound like and then what you are and what you're not, and, then, from there, all your messages are going to be unified in that voice and tone, right?

Phil:

So, for example, remember Shopify is brand voice and tone and that's available on their website. You can just Google "Shopify" and "brand voice" and you will see a document that they share, obviously internally to their staff, about how they need to talk to merchants but also that they, most likely, share to all the agency that their working with and so on. And it reads as, "Shopify's voice is a reflection of who we are" and "We should always elect Shopify." That's very. At the same time, some of our aspects of our personality might be at more or less depending on the audience and the context. That's the tone. We want our voice to sound like a business mentor with zero ego.

Phil:

So, they're there to help with the business mentor that's there to help you and they have no-

Brett:

Helpful, knowledgeable, but not arrogant or boastful. It's making it about the user and not about Shopify.

Phil:

Exactly. It's especially not about the mentor on the other side. It's like he's there to help and he knows how he's going to help you, but it's about you as a business owner that's making all the sacrifices and all the bets on operating that store. This is what it's about. It's about helping you succeed.

Phil:

And, then, that's the next step, and you just mentioned it. Then, there's three things that they are and they aren't. They're confident, not arrogant. So, that's one thing that they want to be. They're empathetic, not over-protective. And, finally, they're transparent, not black. So, they have those three things. It's probably every Customer Support agent at the, the gurus that are on the Chat, they all have that because they built their with, "You need to be a business mentor with zero ego."

Brett:

Yep. I love that.

Brett:

And what's so powerful is we work a lot on the traffic side of e-commerce, right? So, we're helping craft effective, compelling, on-brand, YouTube ads, right?

Phil:

Yep.

Brett:

And we're crafting search ads and shopping ads and all of these things and, so, what happens if someone sees a really well-done ad and they think, "Man, that's speaking to me and, so, I'm interested. I want to check out more about this company," and, so, they go to a landing page and the landing page speaks to them. Again, it's in the right brand voice and it's convincing and it's got all the sales points there and then they interact with one of your agents and it's not on-brand, right?

Phil:

Yeah. Exactly.

Brett:

Now, it's like, "Ugh. So, that's what it's really like, then, at this company?" Kills the whole thing. So, it all needs to work together.

Brett:

I love those brand statements that Shopify has. I'm a huge Shopify fan, in general.

Brett:

But, super powerful. You need to craft those for your business, as well. Share those with your internal team, your outsource team... They need to uphold that brand voice in all of the conversations, and it makes a big difference. And it's one of those things that, I think, if you have properly spelled out brand voice components, then it can take someone who would be average, or maybe even below-average, as a Customer Support person and it can make them really good, really effective. And without it, you could take someone who would be really good and, maybe, lower them down to mediocre -

Phil:

Yeah. And same thing for agencies. If you didn't figure this out before you were going to reach out for your agencies and, then, you're keeping one and you're like, "Well, they didn't get it," right? Do you spell it out for them? Is it even clear in your head what your brand is supposed to be?

Brett:

Likely your fault that they didn't-

Phil:

... and how do you expect them to figure it out?

Phil:

So, yeah, that's really step number one when you're launching your brand, and, usually, it's the owner or the interpreter personality that is a lot of it. Bring it on paper and then share it to people you're working with. That's definitely a great place to start.

Brett:

I love it. I love it.

Brett:

Well, Phil, let's talk about Gorgias because executing, pulling off a lot of the things we talked about would either require piecing together multiple systems or potentially staffing up, which you may be able to staff up anyway, but talk about what Gorgias does and how you tie all of this together and how you make reporting and dashboards and KPIs clear and just talk about what you guys do.

Phil:

For sure.

Phil:

So, yeah, Gorgias, I could say, is the number one Help Desk for e-commerce. So, all we specialize in is helping brands manage their customer support and across all channels. So, we just give them all e-mail, SMS, Facebook, Instagram, Chat... So, all of this in one place. And, then, we match all of those communication to the buyer's profile. We match an SMS or a Chat automatically without having to identify it to a Shopify profile or a Magento profile. But, then, that's data is available in one second to the Customer Service rep that is interacting with your client. And our role is for each agent to become super-agent, as efficient as possible, so that you don't need to staff up infinitely with more agents so that each one is really empowered with the best technology in order to increase their performance by at least 30% compared to where they are originally.

Phil:

So, yeah, we're making okay-agents very good in no time. And just, how do you do that? Little things, right? We talk about machine learning already, quite a bit, on this episode. But, little things like proposing automatically to the agent which response they should give to a client. So, if a message comes in and it's like, "Hey, where is my order," and someone replied automatically, "It's in the queue for the agent to look at," "The agent is looking at it." We're proposing, automatically, the canned response that is the most relevant to "Where is my order" to that agent right away when you open the ticket. So, he sees all the data of the client on the right side and, then, he has this... It's really hard to describe on a podcast-

Brett:

Sure. Sure.

Phil:

... but, then, he sees this response that is already made for him and it's there and you just have one click to click and it's inputted in that conversation.

Phil:

So, it's really about giving agents superpower to help customers on all channels.

Phil:

And, then, what happens, usually, is you'll be able to work with less agent, but one of them, at least, of your team will become a little bit more like an engineer, if you want, or like a technician and they will start working the system rather than just answering tickets all day. And if you invest just a little bit more time in working in the system rather than trying to power through tickets, the exponential gains over time is really rewarding and I think that's what a lot of our clients understood now is it doesn't have to be just like a redundant, past that is in the back-end of business scaled well. It can be just like what they do in the marketing at the front-end where they use the best email tools or the things that scales really well on the advertisement side and that can do one-to-many and they can replicate those mechanics on the customer service side and that's what we're helping with.

Brett:

So, giving tools to create super-agents out of all of your agents, all your Customer Service reps, tying this all together. You got some automation in place that you're utilizing, and, then, like we talked about with social, where someone can interact and reply to comments inside your platform rather than the unmanageable Facebook ads interface and Ads Manager.

Brett:

And, so, then, how do you also tie together data in dashboards and revealing KPIs? Because all this stuff does have a return, right? One, you should it just because the right thing to do to provide good customer service. But, this is creating a business return, as well. Talk a little bit about measurement in dashboards.

Phil:

Yeah. For sure.

Phil:

So, there's the normal, traditional KPIs that are a track what customer support is like. How fast can you reply, how long does it take you to handle an inquiry from the beginning to the end, and what's the average production, let's say, of a certain agent. So, being able to drill down those quick, first-time reply and a time to solve a ticket, that's really where it starts. The basic of it.

Phil:

But, then, where will you compare your benchmarks? So, a lot of our clients are coming in from other platforms, especially the Zendesk, which is a large player in the space... They see that first-time reply go from 20 hours, two hours, in a couple of weeks working together. So, that's really the first benchmark of success is how fast you can reply to your clients. That also determines when your counter-web for Live Chat will go get those rewards.

Phil:

So, really, giving the tools to hit on that KPI is that first mission. And, then, beyond that, we want to transform Customer Support into a profit center and a profit generator. And the main way that we've found to track that today was to tie in the agents on the tickets to the sales that are driven after that ticket was answered for that customer. So, measuring sales by the agents in the main way that you find to measure how well a team is driving the revenue.

Phil:

Because, imagine, how that changed the conversation from your Customer Service team. That, usually, is just like, "Oh, man, we're so behind. We have ten thousand tickets to track and we're responding in 24 hours," to coming out, it's like, "Oh, yeah. Now, our team generated ten thousand dollar last week."

Brett:

Yep.

Phil:

Right? So, the guy goes to the CEO and is like, "Oh, yeah. That's cool. Now, we're talking a different type of language." It's like how do you generate sales for support and transform support into a profit center, which is one of our core mission, and we found ways to track that which are pretty innovative.

Brett:

I love that, turning Customer Support into a profit center. And I believe you get that right and take what could be a so-so or an average experience to a great experience with your customers, then that really makes everything else better. You're going to get more referrals, more word-of-mouth, your ads are going to work better, there's going to be better comments on your ads and things like that. It's all going to compound and really help improve, so...

Brett:

Phil, this has been fantastic. We're up against time a little bit. Really insightful. Really appreciate you taking the time. I'm even more excited now than I was before about conversational commerce and really just encouraging people to do this the right way. And it's worth the investment, it's worth doing, but I would argue that you probably do need a tool like Gorgias.

Brett:

And, so, if someone's listening and they want to check out more about Gorgias, how can they go about doing that and do you guys have demos, trials, resources?

Phil:

Yeah. Absolutely. Yep.

Phil:

If ever they want to trial us, they can just mention the podcast and we will provide them with a second month free for their account.

Brett:

Awesome.

Phil:

And, so, really special offer. Also, we'll put a link in the description here that will provide you with that offer right up the bat if you click on it.

Brett:

Awesome.

Phil:

And, yeah, check out gorgias.com. Yeah, and then hit me up, phil@gorgias.com if you have any question. I'm happy to help you enable your DTC brand with conversational commerce.

Brett:

Awesome.

Brett:

Phil, thank you so much, man. Appreciate the time. Thanks for bringing your wisdom and your passion. Much appreciated.

Phil:

Thank you for having me.

Brett:

Yeah. Absolutely.

Brett:

And, as always, thank you. Thank you for sticking with us. Thank you for tuning it. We'd love to hear more from you. What would you like to hear more of, less of on the podcast? We would love to shape the show and mold it to make you happy and to make sure that this is useful.

Brett:

I do recommend you check out Gorgias. You can check all the show notes at omgcommerce.com. Look at the podcast there. We'll have all the links here.

Brett:

And, with that, until next time, thank you for listening.

Brett:

All right, Phil, that's a wrap. Man, that was so fascinating.

‍

Episode 141

:

Chris Tyler - OMG Commerce

Prime Day + Early Holiday Insights

This year’s Prime Day was in October vs. Amazon’s usual July time frame. What did this mean for 2020 Prime day vs. 2019 Prime Day?

Very little about 2020 has been normal - including Prime Day. This year’s Prime Day was in October vs. Amazon’s usual July time frame. What did this mean for 2020 Prime Day vs. 2019 Prime Day? Would this year’s Prime Day mark the official launch of holiday sales?

In this episode, I bring back OMG Commerce’s Amazon Director Chris Tyler to discuss what we noticed this year during Prime Day with our clients.

Here’s a look what we discuss:

Total prime day sales grew 70% year-over-year in 2019 vs. 2018, but only grew 45% year-over-year in 2020 compared to 2019 (Statista report).
$3.5 billion of the estimated $10 billion in total sales on Prime Day were from 3rd party sellers, but the most popular item on Prime Day was Amazon’s deeply discounted Echo Dot.
What categories of products we saw perform the best for our OMG clients. 62% of Prime Day purchases this year were for gifts for someone else according to Digital Commerce 360.
Why we didn’t see as dramatic of a list for 2020 Prime Day vs. 2019 Prime Day, but sales immediately after prime day this year have been strong.
The impact of Prime Day on Sponsored Brand Video Ads and overall ad performance
Interesting Amazon DSP trends during Prime Day and since
Plus more!

‍

Mentioned in this Interview:‍

Sponsored Brands Video Ads‍

eE 132 with Chris Tyler

‍

Chris Tyler - Director of Amazon Advertising Services at OMG Commerce

Launch and Scale 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 edition. This is a special show coming to you mid fourth-quarter or almost mid fourth-quarter. Going to do a breakdown of Prime Day performance and get a little sneak peek at what we are expecting for the rest of the holiday shopping season.

Brett:

With me on the podcast is the man, the myth, the legend, this is now, is this your third time to be on the podcast? The third or fourth?

Chris:

Yeah.

Brett:

Excited to welcome on, the Amazon Director for OMG Commerce, Mr. Chris Tyler. Chris, what's going on, man? Is this really the third show or fourth?

Chris:

Yeah, this is the third. I was going to ask you, who's been on the most, is it Chris Brewer?

Brett:

Chris Brewer, I think, has been on the most. So for those that don't know, and I think most of you do, Chris Brewer is the co-founder of OMG Commerce and my business partner. I think he's been on four, but man, you're moving in there dude.

Chris:

Catching up.

Brett:

And if you catch up, it's anybody's ballgame, so we'll see.

Chris:

I appreciate you having me back.

Brett:

Yeah, absolutely. So, you head up our Amazon team, we've got a team of eight or nine now, at OMG Commerce, that's all they focus on, is Amazon and growing client's presence on Amazon, Amazon ads. So we're going to do a breakdown of what we saw with Prime Day this year and we're going to talk about some global stats as well, that are really interesting. And I think this will do a couple of things. One, it'll show that this was a unique year because this was the first time ever, that Prime Day was in October instead of July. So usually Amazon uses this as a way to really boost what's typically, a kind of a lousy time for e-commerce, summertime. They use Prime Day to really boost that timeframe, but this year, because of lockdowns and the pandemic, they had to wait until October. So this really served as the kickoff for holiday shopping.

Brett:

But first, I want to talk through Prime Day by the numbers and talk about how it's evolved in recent years. And then we'll get into a few global specifics, but then some specifics that we saw as OMG Commerce. So for those that don't know, Prime Day kicked off in 2015 and actually, I don't even know if you know this Chris, you probably do, it was to celebrate the 20th anniversary of amazon.com. Did you know that?

Chris:

I didn't, no.

Brett:

Oh, yes. Dump the Amazon director. So that first year, and again, it was in July or summertime anyway, 0.9 billion, so just shy of $1 billion in sales, pretty impressive. Next year, 2016, $1.5 billion, 2017, 2.4 billion, 2018, 4.19 billion, and then really, where there's the biggest jump, and we can talk about this for a second, 2018 at 4.19 billion for the Prime Day. And Prime Day also started getting longer, right? It grown now, it's a full 48 hours. So 2018, 4.19 billion, 2019 7.16 billion. So about a 70% year-over-year increase in total Prime Day sales, from 2018 to 2019.

Brett:

Now this year was huge too. So this year came in at about 10.4 billion. That's about a 45% year-over-year growth, still astronomical, but not quite the same growth pace that we saw from 2018 to 2019. Now a couple of caveats, because you may Google this, and you may look and you may see different numbers. Amazon doesn't actually reveal full sales totals for Prime Day. They're not required to do that by the SEC, so they'll reveal some data and obviously, they have to do their quarterly earnings and total quarterly results, but they don't reveal all of the numbers for Prime Day, so some of these are estimates.

Brett:

You have places like e-Marketer and Statista, that go in and they break down what is given, the data that is given, and then what we know about Amazon and then they extrapolate the rest. But we didn't see quite the growth from 2019 to 2020, like we were expecting. What do you say about that, Chris? Did you just notice anything with our clients that may also kind of indicate that yeah, we kind of saw the same thing? It was great, but maybe not the same kind of explosion that we saw in 2019?

Chris:

Yeah, to your point, we saw really solid growth in looking at week-over-week, looking at the Prime Day versus maybe the daily average of the two weeks prior. I believe we were a little over two X for both ad sales and total sales. But when we look at the growth we saw from 2018 to 2019, we were pretty far off, at least relative to where maybe, we were hoping starting Q4, maybe jumped that 70%, 80% increase that we saw the year prior. So it's weird to look at it because it's a crazy year, right? Nothing is the norm and so I think overall, it's a solid success, especially with the fact that Prime Day almost didn't happen, or at least, we didn't know if it would.

Brett:

Yeah, things were touch and go there. We were talking to our Amazon reps and they didn't know, nobody knew, right? The system was already so stressed and you remember back to the lockdowns and stuff, Amazon could not fulfill. And so we kind of wonder like, "Okay, are they going to have the confidence to run Prime Day and put extra pressure, extra stress on a system that's pretty well maxed, in terms of the supply chain and e-commerce delivery networks and stuff." But yeah, so we're lucky that it happened.

Brett:

So yeah, and what's also interesting is that, and you mentioned, nothing's really normal this year and that's so true. We had clients seeing absolute record days, every day, back in April and May in some categories. And that has continued to some degree, although, not at the same levels, but as we're looking at, watching that comparison, you talked about comparing Prime Day to the daily average for the two weeks prior to Prime Day.

Brett:

It kind of makes sense that we didn't see quite as much of a jump in 2020, because 2020 was already elevated a little bit, right? Where maybe the two weeks prior to a July Prime Day, those are pretty soft weeks, right? So you throw in a Prime Day, it's just going to be an explosion. And so we didn't really know what to expect this year, because Prime Day's never been in Q4 and we've never managed it during a global pandemic, either.

Brett:

So overall really good, but yet not the same spike that we saw either. What's also interesting and I wonder if this sparks any thoughts from your perspective. 62% of shoppers, this Prime Day, said they were shopping for holiday gifts, where if you look at Prime Day typically, it's in July, it's usually not gifts. It's usually like, "Dude, I'm going to get a special on a TV for my house or the Amazon Echos are on a massive sale."

Brett:

And those are actually, just a quick side note, the Echo Dot, the new Echo Dot was the most popular item for this Prime Day in 2020. That's what sold the most, and that's been kind of the trend for the last few years. It's Amazon's products, that one, they deeply discount them, they also promote them heavily, those have been the most popular products. But, did you see anything in our data that would indicate, yeah, this makes sense, they're more people shopping for gifts, this Prime Day, then maybe last Prime Day?

Chris:

Yeah. So we found that a good amount were gift based, but a larger amount were based off of product you would get with COVID, again, teaching supplies, baking supplies, anything that was home-based or otherwise, where the things that really picked up. And I would say, we do have a client that is in the gift giving to a certain extent, picture frames, photo albums, they saw an uptick, but not nearly the same that they saw in the last Prime Day. So to your point, I think that happened, but there were times, where it was actually the inverse, where we expected it to be the catalyst for the holiday season, and it did grow, again, it grew like two X, but not at the same level we saw in July of last year.

Chris:

So one of the things we're doing, is tracking the weekly after Prime Day, just because we know, "Okay, we're going to come up to Black Friday, we're going to have clients asking, why are things dipping prior to the holidays? What are we expecting?" And so we want to trend that out and on a side note, just one interesting thing we noticed was, the week after Prime Day, it was up sales, ad sales, total sales, impressions, 10% to 20% versus the two week prior to Prime Day. We know the week prior to Prime Day is going to be down. So we just-

Brett:

Right. The week prior to Prime Day, let me add, just to clarify this, the same thing happens before the Cyber Five. So before Black Friday, Cyber Monday, people wait, right? People wait and say, "Man, if I just hold on a few more days, I'm going to get all these deals." So the week before Prime Day, not so good, week before Black Friday, Cyber Monday, not so good. But what you're saying is, the week after Prime Day, and usually, they just drop off right after too, the week after Prime Day, this year, was still up 10%, 20% over the weeks prior, which is impressive.

Chris:

... yeah, really interesting and then the hope there is, it is the start of the holiday season. And hopefully, it puts it in a place, where that growth is more than last year. And like you said, it's hard to tell because we're already up so much. So what is that growth going to look like? And that's why we're kind of tracking the weekly post Prime Day. Prime Day was great. Wasn't as high as maybe people hoped, but it was still very high. And so now, our focus is moving to, what does the holiday season going to play out to be?

Brett:

Yeah, it is interesting. And one of the other things that Amazon did say, is that marketplace sellers, so third-party sellers, that's typically who we work with, they accounted for about 3.5 billion in sales, this Prime Day. And so it's a decent chunk of Prime Day sales, but it's only about 38% or thereabouts, of total Prime Day sales, where typically, just an average day, third-party sellers make up about 58% of total Amazon sales. So again, that leans and points to, hey for Prime Day, this year, a lot of the big movers, a lot of the biggest volume sales items, were Amazon's own products.

Chris:

Right.

Brett:

And some of their 1P deals, which is interesting. So yeah, in talking about Prime Day launching, holiday sales, as we all expected, we all thought, "Hey, it's the beginning of Q4, we're training customers now, to potentially shop early." Right? We all remember what happened in the lockdowns, where you'd order something, shipping times are delayed, it was just a nightmare. So Amazon's kind of trained people to think, "Okay, if I want to get my stuff in time for Christmas, in time for the holidays, I'm going to need to order earlier."

Brett:

And there are even some surveys that Google put out and a few others, that showed you, 65%, 70% of all shoppers are saying, "Yeah, I'm shopping early this year." So we all thought, "Hey yeah, Amazon Prime Day, that's going to be it. It's going to be the launch of holiday sales." And it appears like, that's probably true. The sales did take a dip after Prime Day, they always will, but maybe not as dramatically as last year. Is that what you saw, the post Prime Day dip was probably not as significant as last year?

Chris:

Correct? Yeah. It seemed to be at a lower level, and then again, even if you compare it to the week, two weeks prior to Prime Day, and you skipped that week prior, it was still up 5% to 15%. And one thing I would note, I know we're talking Prime Day, but this is after the election, or at least should be, depending on where we're at.

Brett:

For all intents and purposes, it's after the election, but sure. Yeah.

Chris:

Yeah.

Brett:

There's some drama still lingering, who knows?

Chris:

Yeah. One of the things we're watching is, we saw a lull for a few days during that early period prior to an election and then right after. We're seeing it pick back up. So it's like we had Prime Day and then there's the post Prime Day reprieve and then we should be launching into, what should be a great Q4. And then you also come up against an external thing, like the election and now that, that's over, our hope is that it's all steam ahead and really be able to rock, just a great rest of Q4. And we're seeing that the few days after, and I don't want to blame it on Prime Day, but it does seem that there's these little things were hitting and then trying to move past.

Brett:

Yeah. It's such an interesting Q4, when you put it all together, right? Pandemic year, Prime Day in Q4, which never happened before, election and not just a normal election, but a highly contested election, record voter turnout, all kinds of craziness surrounding the election. And what's interesting is, I remember from a long time ago, seeing these studies that would show how consumer behaviors shifts for a few days, around the election.

Brett:

People just wait, even if they're buying cookware or something like that, which doesn't matter. You ask a person, "Well, what if this person gets elected?" "Oh, well I'll buy the cookware." "What if the other candidate gets elected?" "Yeah. I'll still buy the cookware." "Why don't you buy it now?" "I don't know. I'm just going to wait."

Chris:

Yeah.

Brett:

That's kind of the mindset around an election and probably this one, even more so. So definitely saw a little bit of a lull, some weird activity going on around the election. But now yeah, I think it will be full speed ahead. And we'll recap this on a show later, but really curious to see, what does the Cyber Five going to look like? I'm confident it's going to be another record. It's going to be big, but what's potentially possible is that, holiday's going to be spread out a little bit more. So we're definitely seeing that trend and it will be also interesting to look at, how does early November this year look, compared to early November of last year?

Chris:

Yeah.

Brett:

And we don't have like full data, and just for those that don't know, Chris Tyler was a mathlete. He knows numbers, he can quote numbers, he can do math in his head like nobody's business. So we'll take this with a caveat of, this is just you going from your memory and what you've seen and remember, but that's still better than nothing. What are you experiencing early November this year, compared to last year, would you say?

Chris:

Yeah, I would say that for the most part, our percent of growth year-over-year, is a bit higher than October was and that even includes Prime Day. Within it, obviously, not quite apples to apples, but that's my closest comparison. Right? All things considered-

Brett:

That's even with the first couple of days of November being kind of weird because of the election. Yeah.

Chris:

... yeah. So November, the first day started strong and it had a lull and then the past five, six days or so, and then at a pretty good clip. So all things considered, I think our year-over-year growth will be, maybe 5% to 20% higher than it was in October. And side note, just a little brag on myself, I did go to the math Olympics when I was in school.

Brett:

I know you did.

Chris:

And I had the first place medallion, gold medal, I don't know what they called it. So yeah, I am a mathlete, I'm proud of it.

Brett:

Not just a mathlete, but you're a math Olympian. That's the next level, the math Olympics, was that a New Jersey wide thing or what was that?

Chris:

Well, I went to a private school, so it could have been like-

Brett:

It was impressive, you went to the Olympics. Let's just leave it at that. It was awesome.

Brett:

You can't do that. No, no, we definitely can't do that. Oh, that's awesome. So impressive stuff. So crazy growth that we're seeing in November. Let's talk about specific ad types, I think this is interesting as well. So our agency, we've been one of the early adopters of sponsored brand video ads, where we spend a lot of money on sponsored brand video ads. And for those that don't know, those used to be called video in search. And so those are the little videos that you see as you're scrolling through Amazon, you're searching for picture frames, you're searching for dog treats or whatever, and as you're scrolling through the results, you see a video. There's a video playing, it's like demonstration type video, maybe little infomercial type video, but it's not like a branding video, it's a product demo video. What have we seen with sponsored brand video ads, both during Prime Day, but then also, early Q4 2020?

Chris:

Yeah. A sponsored ad video is the biggest thing for me right now, in terms of, all advertisers should be utilizing it. Not only should they be utilizing those, you're running it on all products, testing AB copies of videos, just doing everything they can to lean into this while it's still at that phase of early adopter. Because we are seeing it get a little more competitive, but still really great results. And prior to Prime Day, performance was probably 30% to 40% better in terms of ad cost return, than for advertisers overall.

Brett:

That's really crazy to think about.

Chris:

It's nuts. And it's all about the placement. So anyone listening, should go check out the video, Brett and I did the podcast sponsored ad video.

Brett:

Yes.

Chris:

Talking about, it's the placement, but you'd want really quality video, as it gets more competitive.

Brett:

Yep.

Chris:

And I know that's your field, not mine, Brett, but I am with you on that. So what we're seeing is, the challenge is really just volume and you've got that one placement. You can't really push it past the point of just owning it for as often as you can, just because it is just one spot. So leading up to Prime Day, we got very aggressive and we saw ad sales from about 50% for the two Prime Days, versus the period prior, ad costs did increase maybe 20%. And that's, if it goes from 20% to 24%, to me, that's a 20% increase. With that being said, they were still 30% lower ad costs on the overall advertising account.

Brett:

Which is awesome. So just to reference that episode, it's episode 132, so go back and check that out. It's Chris and I talking about, the two hottest trends in Amazon advertising, sponsored brand video and Amazon DSP. But yeah, and really, because it's new and you're talking about the quality of the video, right now, I think it can work, even if it's a pretty subpar video, even if it's not a video you love, it'll probably still work pretty well. If you run a great video, it's going to crush it, but still the performances is increasing. And how much are we seeing the volume grow with sponsored brand video?

Chris:

So we're seeing it increase a good amount. I would say, for accounts that we start with a good set of sponsored brand video, within a month or two, we probably hit 80% of the plateau. What I mean by that is, we're taking keyword search terms, they already have themselves some products, sponsored brand, doing keyword research and we've learned pretty quickly because of volume's limited, to go really aggressive on those bids. So maybe some day that'd be two bucks for a sponsored product, we're going $5. So it's less of a slow ramp up and more of, we want to blitz it, come in strong.

Chris:

So really, the growth happens within a short two months and then it's a steady growth, as you add converting search terms and things like that. But I would say, that month-over-month for October into September, probably saw growth of 25% to 50%, and if you go back to when we started, maybe four months ago, we're probably like four X.

Brett:

Yeah.

Chris:

Just because, more of our advertisers have leaned into it. We've learned a lot in how we optimize. And I do think that's going to continue to grow, as we keep our foot on the pedal.

Brett:

Yeah. And that's amazing growth. And I think another part of that too, is that Amazon's potentially, going to start showing them more, we're seeing them more. I'm seeing them definitely, more frequently now, just as I'm shopping for stuff.

Chris:

Yeah.

Brett:

So I'm not looking for ads, but just shopping on Amazon, I'm seeing sponsored brand video ads more and now, they're available on desktop when in the beginning, they weren't, so I think that's going to make an impact as well. So yeah, now is the time, run sponsored brand video, you need to get that going in Q4, if you can at all. So fantastic. Any other interesting takeaways, interesting data points from Prime Day or from early Q4, this year?

Chris:

Yeah, I would mention, talking about that episode we did together, a month or two ago, with DSP, we saw a really nice growth, not only on Prime Day, but the week after. I know we talked for overall, account sales were up 10% or 15%. But it was really cool, the impressions and sales overall performance for DSP, the two Prime Days, increased about 100% to 150%. It did really, really well and that was to be to expected, to a certain extent. We're doing retargeting, we're doing some competitor targeting in InMarket.

Chris:

So we're really honed in and we had a lot of clients running deals, so we capitalize on that. They're sharing a lot of those, but what was pleasantly surprising, was that the week after, we still saw impressions, we were up about 50%, versus the two week prior period to Prime Day, and then sales were up 35% to 40%.

Brett:

Wow.

Chris:

The convert dipped a little, but we came in with, "Hey, you're going to get traffic during Prime Day. They're not all going to convert."

Brett:

Right, right.

Chris:

Obviously, the ones that didn't convert on anything, we're still showing the product, we ran a strategy that had coupons going the week after Prime Day. So since there's the feeling, if you missed the deal, here's a deal, here is what you probably want at the price you want, and that shows in DSP, that coupon actually shows. So we're actually seeing the tail end of that still in place and we're hoping that parlays into a really solid, rest of the year for DSP.

Brett:

Yeah, love that. Just for those that don't know, DSP is display ads primarily, where you can run display ads on Amazon and off Amazon, based on shopper behavior data. So like Chris mentioned, we're running, mainly retargeting ads to be able to visit a particular ACE and then they don't purchase. We're going to retarget them and try to get them to come back and purchase. So, really saw amazing DSP growth. We also talk about that, talk about DSP in detail, in episode 132. But saw some great growth with the Amazon DSP around Prime Day and after and so I think that's also a good indication of what's to come for Q4, as well. Any other, as we kind of wrap up, we just got a couple of minutes, but any other final key data points or interesting takeaways?

Chris:

I would say, for DSP and PPC, it could be the way we run it, but our CPC only increased about 5% to 15%.

Brett:

Interesting.

Chris:

I know there's things out there like, double your budget, double your bids, it can be pretty aggressive. We do that with certain campaign strategies, but not overall. The search volume is there and we want to capitalize on it, but efficiently. And then with DSP, we saw ECPM, which is cost per thousand impressions, increase about 25%, a little bit higher, to be expected. One DSP is being pushed across the board by Amazon reps, agencies are leaning into it as we are. And it just is a great advertising avenue and so more people are leaning into it, but I did expect it to be a bit higher. So it was nice to see that we were getting efficient, relevant traffic, at not too high of a higher cost.

Brett:

Yep. Totally makes sense. That's really interesting that cost did go up and we expect that, right? We see that on the Google side as well, as we get closer to the Cyber Five, CPCs go up and cost per thousand, go up, it just does, more competitive, but conversion rates also go up. So performance is usually still better, and so it's interesting that the CPCs only went up that much for Prime Day-

Chris:

Yeah.

Brett:

... so that's super interesting to watch, as well. Well, Chris, really appreciate it, man. Hey, third time, crushed it. I guess we'll have to have you back. Chris Brewer is getting nervous, starting to sweat. But hey-

Chris:

Well, we got to do one with the three of us, but count it as my fourth one.

Brett:

That would even things up. Yeah, yeah, yeah. Yeah. Well, no, it wouldn't, nevermind. Okay.

Chris:

But it's me, with Chris Brewer as a guest.

Brett:

Okay, here you go. I like it. So do go back and check out episode 132. We'll link to some things in the show notes, some articles and things we're referencing in terms of global Prime Day numbers, and then yeah, be looking for another update. We'll have another update episode coming to look at the Cyber Five and the rest of holiday as well, so check that out. But Chris, I appreciate it, man. Thanks for coming on.

Chris:

Thanks for having me.

Brett:

Yep, absolutely. And as always, we appreciate you, our listeners, we know there's a lot of different podcasts you could pick from, lots of information out there, thank you for spending your time with us, we greatly value that. And hey, we'd love to hear from you. What would you like to hear more of on this show? What would you like us to tackle next? If you haven't done it and you're so inclined, I would love if you leave that five-star review on iTunes, it helps other people discover the show. And with that, until next time, thank you for listening.

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Episode 140

:

Khierstyn Ross - Founder of Launch and Scale

6-Figure Product Launches on Kickstarter

Khierstyn Ross is a wealth of knowledge when it comes to launching products on Kickstarter. She knows what to do and what to avoid.

‍

Khierstyn Ross is a wealth of knowledge when it comes to launching products on Kickstarter. She’s experienced the highs of multiple 6-figure product launches, plus she’s endured the heartache of a launch gone bad. She knows what to do and, just as importantly, what to avoid.

In this podcast, we talk about the keys to building a 6-figure crowd-funded product launch including:

What products work best for a Kickstarter launch
Why audience building is so important, how to do it, and why so many people underestimate it.
What kind of targets to set for your first day of your Kickstarter launch
What to consider when it comes to shipping
Top mistakes to avoid
How storytelling fuels crowd-funding launches

Plus more!

Khierstyn Ross - Founder at Khierstyn.com

For: eCommerce Evolution listeners - 14 Day FREE Trail for Khierstyn’s “The Product Launch Pad”

eMail Khierstyn with subject line: Evolution

‍

Mentioned in this episode:

Kickstarter

eE Jeremy Horowitz

Groove Life

Peter Goodwin

Original Grain Watches

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Episode Transcript:

Brett:

Well, hello, and welcome to another addition of the eCommerce Evolution Podcast. I'm your host, Brett Curry, CEO of OMG Commerce. Today, we're talking about how to have a six-figure product launch using Kickstarter. Now, we've talked about product launches before. In fact, I recommend you go back and listen to the Jeremy Horowitz podcast where he talks about using SMS and different messaging platforms to have a product launch. Today, we're talking Kickstarter.

Brett:

You've probably seen even some successful brands using Kickstarter for new product launches. I'm so excited to dive into this topic. I think it's going to be super helpful and applicable and hopefully you will be able to put these ideas to use. Now, a couple of quick notes before I introduce my guest. If you're watching the video, you've probably noticed, "Hey, Brett, you look like you're in a nursery or a kid's room or something like that." That is because I am. So at the beginning of quarantine, we kind of restructured our nursery, my son, Benjamin's room, he's three, will also be my office.

Brett:

We're back at the OMG offices now for the most part, but we're remodeling the podcast room. It just made sense for me to be at home today. So I've got Spider-Man, I'm sorry, Superman and Green Lantern in the background and this show is brought to you by the letter G. See right here, the letter G, just like on Sesame Street back in the day. So this should be a lot of fun.

Brett:

Well, my guest today is the host of the Launch and Scale Podcast. Also, she is the founder of khierstyn.com. Her name is Khierstyn Ross. So Khierstyn, welcome to the show. Thanks for coming on. I'm really excited about this topic.

Khierstyn:

Yeah, same here. I guess we were joking before. It's like Khierstyn from khierstyn.com. Sounds weird, but cool.

Brett:

Well, it sounds like you're a superstar. Sounds like there should be flashes going off in the background like paparazzi.

Khierstyn:

Should be.

Brett:

Yeah.

Khierstyn:

But I'm like, keep it simple. But yeah, that did make it easier to get to.

Brett:

But it's a unique spelling of Khierstyn too. So don't go maybe for the traditional spelling of Khierstyn. Maybe that's Kirsten Dunst or something. I don't know. But you're unique. How do you spell your name, just for those that are wanting to type this in as we talk?

Khierstyn:

Grab a pen. But yeah. K-H-I-E-R-S-T-Y-N.

Brett:

Love it, love it.

Khierstyn:

It's phonetic. There's no special story behind it. But yeah.

Brett:

Your parents wanted to be unique. They wanted you to really learn how to be a good speller from a young age.

Khierstyn:

Yes, exactly.

Brett:

Yep, yep. That's awesome. Really pumped to talk about Kickstarter. Even some friends of mine in the eCommerce space who have very successful businesses are still using Kickstarter. One of them is Groove Live, silicone wedding rings. I'm actually wearing one right now. Peter Goodwin, the founder, is a buddy of mine. They just launched belts. When they launched their belt line, they used Kickstarter to do it and it was phenomenally successful. I know a lot of brands that got their start on Kickstarter, previous guests, the guys from Original Grain Watches. They also launched on Kickstarter.

Brett:

Lots of ways to use Kickstarter. But how'd you become a Kickstarter expert. What's your backstory, your origin story?

Khierstyn:

Yeah. I kind of joke that Kickstarter found me because, at the time ... I've been doing it very full-time for about five years now. Since then, I've raised millions using Indiegogo and Kickstarter, which the platforms, we'll get into how they're ... whatever.

Brett:

Great. We'd love to know that. Yeah.

Khierstyn:

Yeah, yeah. But how I got into it, I definitely didn't pick it. I was very adverse to becoming a Kickstarter consultant and here's why. Before I broke onto the scene five years ago, I was working in the construction industry. I was running a house painting company and then eventually ended up coaching certain entrepreneurs to learn the trades and go from no business experience to running six-figure businesses at a university. I was doing that for about seven years. By the time I turned 24, I feel like I kind of aged out of that and I was looking for my next big thing.

Khierstyn:

So I went traveling for a couple years to Australia, UK. In the UK was the first time, in London specifically, the first time I heard about this whole crowdfunding thing. I sat through a crowdfunding talk and I didn't get it. I was like, "I don't understand this." So anyway, fast track a few months. I end up moving back to Toronto and going to my first networking event. That's where I met the founder of my first crowdfunding campaign. He had this cool idea which at first I didn't think it was that cool, but people really gravitated toward this idea.

Khierstyn:

Eventually, we formed a friendship and he's like, "Look, you know a little bit about online and getting people sales or whatever. Do you want to partner up on this campaign?" I was like, "Sure. I don't understand crowdfunding, but how hard can it be?" Famous last words. We ended up partnering together on this thing. I ran the marketing. I ran the strategy. This thing ended up being a colossal failure. So just to understand Kickstarter a little bit, you need to-

Brett:

Saying, "Hard could it be?" That's usually famous last words. Anytime we get into something and we're like, "This will be a breeze," yeah, that's usually not going to be.

Khierstyn:

It can't be this hard. You don't know what you don't know what you don't know. But yeah, so we get onto Kickstarter. We had set a goal of raising $50,000. So that's what Kickstarter's about is you have to set a funding target that basically says, "Okay, we need 50 grand to pay for inventory and get this idea off the ground." So that was our goal. We wanted to raise $50,000.

Brett:

If you don't hit the goal, then the deal does not happen, right? It does not fund at all?

Khierstyn:

Well, on Kickstarter, yes. But on Indiegogo, you have the option of doing a flexible funding, which means-

Brett:

Got it.

Khierstyn:

... if you don't hit the goal, you can still keep the money. So that first campaign we ended up only raising about 16,000 out of a 50K goal. At this point, we didn't have enough to do anything with that amount of money. So we wrote that off as a failure. At first, we thought it was probably the product. But after talking to people in our market and starting to do a bit of digging as to why this campaign failed, it became very obvious that it wasn't the product. It was the marketing and the execution of the launch.

Khierstyn:

We're like, "Okay. Well, if it's not the product, how can we change this and maybe do a relaunch and just try to make it better the second time so that maybe we'll raise that 50K?" So we ended up following the rules this time, getting guidance, and doing research into how to properly do this and take it very seriously. We did and that second campaign, a few months later, ended up netting us in 30 days, $598,000 with close to 5000 customers.

Brett:

So from 16K to 590K and how many customers?

Khierstyn:

Like 4800.

Brett:

Yeah, which is amazing. That is even more valuable than the 590K, which is awesome. What type of product was this for? Or can you mention that?

Khierstyn:

Yeah. I can mention it. It ended up being a drastic failure. They say if you're not embarrassed by your first project, you're not doing it right. It was a vest that helps you lose weight through cold temperature.

Brett:

Okay, okay.

Khierstyn:

The science is-

Brett:

So cools you down, forces you to warm your body up, burn some calories in the process, okay.

Khierstyn:

Exactly.

Brett:

Okay. It's a novel idea.

Khierstyn:

Yeah. The founder saw the opportunity because there were other similar products launched like this where they had ice packs. It was a vest with an ice pack. But he's like, "No, I want to do a tech version of this that keeps the temperature more sustainable." So hired an engineering firm, raised a bunch of capital before we ... And then after we raised the capital, the engineering firm's like, "This isn't possible or it's not possible on your budget." So it was an epic disaster from the first day.

Brett:

We forgot to tell you. We should have mentioned this upfront. But now would be a good time to tell you this won't work. Okay, good.

Khierstyn:

Yeah. I can talk about this now because, A) I didn't create the product. But also, a lot of people got scammed out of ... They got product, but the product was literally nothing like what was promised. I could talk about this now because at the time there was a lot of hate online towards the founder and I just chose to use what I learned to set better expectations and kind of use that for the basis of my teaching.

Brett:

Pick your product better too. But yeah, but really the real lesson here for you and for the people listening and watching is, hey, the difference in a properly executed launch is the difference between that 16K and 590K and a handful of customers, whatever that was, versus 4800 customers.

Khierstyn:

Yeah, huge.

Brett:

So let's talk through this. I guess what might be kind of fun is what are some of the mistakes? What are some of the mistakes you guys made, other than a cooling vest that doesn't cool? But what were some of the mistakes you made and what are some of the common mistakes you see people make that going into this thing, "Hey, this is going to be really easy," and then it fails?

Khierstyn:

Yeah. That comes down to what the heck we changed between campaign one and two. Campaign one, we knew that people said online that you need to have a really strong start to your Kickstarter launch. We didn't really get that until we fell on our face. So I want to talk first about that because that is the biggest, biggest mistake anyone makes with any product launch, whether you're on Amazon or you're on Kickstarter, is not having built up enough awareness to give your campaign that initial traction.

Khierstyn:

So this is super relevant because with Kickstarter and Indiegogo, they have an algorithm that helps them determine which projects are successful and which are not. They have this because that's how they make money. They make money based on every dollar you raise. So what you need to do, unlike Amazon which is more of a slow burn approach over time and consistent sales, Kickstarter is you got one day to prove yourself. It is that 24 hours. So what you need to know about Kickstarter is that if you have a 60-day period to raise funds, the first few hours are everything. So the biggest thing-

Brett:

Wow. So not even just the first day, it's the first few hours. That's crazy.

Khierstyn:

Yeah. Because the better you do at getting sales in within those first few hours from the list that you built up from the audience and all that, which we'll get into, the better you're going to do. Because what's going to happen is if you bring in about 30% of your goal within that first day, Kickstarter's going to help reward you with additional platform traffic that you get by ranking.

Brett:

Got it. Okay. So setting your goal is something you should consider when you set your goal is that you want to try to hit about 30% of it that first day?

Khierstyn:

Yeah. Yeah.

Brett:

Interesting.

Khierstyn:

To be clear, I'm not sure if we should backtrack into what Kickstarter is, for some people that are new.

Brett:

Yeah. Actually, absolutely. Let's do that. I think most people know, but for those that don't. I was so excited. We jumped right ahead into the mistakes. But yeah, what is Kickstarter.

Khierstyn:

Yeah. Then let's get back to the 30% because there's a clarification there. But what is Kickstarter? Why should people pay attention to it? The number one biggest stress that will kill your ability to scale is cashflow. It's cashflow because you have, as an entrepreneur, no shortage of ideas of products, but knowing how you usually bring products to market is that you need to fork out thousands of dollars to pay for inventory on that new product before you even sell it.

Khierstyn:

So by the time you order the inventory, get it into FBA, get your listing up and sell that, and money in the bank is, if you're lucky, six to eight months from the day you paid the manufacturer.

Brett:

Very cash-intensive upfront.

Khierstyn:

Very cash-intensive, yeah. This is the number one issue with entrepreneurs being able to scale in the physical product space. So what Kickstarter does, honestly, it flips that on its head. We'll get into which products work with Kickstarter because not every product works with Kickstarter. But it allows you to set up a presale campaign where when you have 30 or 60 days. We'll just keep it simple. We'll say 30 days. You have 30 days to raise a set amount of money that's based around an inventory goal. So if you know that you need 20K to go manufacture product, your goal is 20K to raise in 30 days.

Khierstyn:

How you're making that money off people, people aren't donating to your campaign. They're literally preordering-

Brett:

Pre-buying.

Khierstyn:

... your product. Yeah. They're pre-buying with the understanding that they're going to get that product in four months.

Brett:

And they're going to get it at a discount, right, so that the deal is, hey, I'm pre-funding. I'm pre-ordering this product. I'm going to get some perks. I'm going to get a discount most likely and I get to be in on the launch of a product.

Khierstyn:

Yeah, exactly. So by the time your campaign ends, three weeks after that, cash is in the bank and then you go to the manufacturer and you just keep going. Number one, that's what Kickstarter is. It's a presale model being able to tap into a global community that Kickstarter offers.

Brett:

That's right. I know the answer to this and you kind of alluded to it. But for those that are maybe thinking, "Well, why use Kickstarter? Why not just email it to my list and take preorders or do something else? Why would I go to Kickstarter? Because Kickstarter, you mentioned they charge a fee on every dollar that you raise. Why use a crowdfunding platform rather than just doing it ourselves?"

Khierstyn:

Yeah. Here's why. This does differ per platform. Let's hypothetically say that you want to sell a couple thousand units of something and you go to your list. You're restricted in sales based on your list and how much ad spend you can personally drive in traffic to a sales page to get people to buy. Whereas with Indiegogo or Kickstarter, when you start to rank on their platform, you're actually tapping into organic platform traffic.

Brett:

Millions of visitors, millions of people on the platform.

Khierstyn:

Millions of visitors. So I'm just trying to pull it up now. For example, one of our campaigns we raised about with 2800 backers, 350,000. I don't know if you could see this, but essentially ... You can't see this. 42% of all of our sales came from Indiegogo.

Brett:

You can share your screen if you want to for people that are watching the video. Explain it obviously, because most people just listen. But if you want to click share, you can, just to be fun.

Khierstyn:

So here. I don't want to show the rest. But this is it. These are the steps. We raised 2800 customers, this many visits, and this much raised. Of that, 44% of our funds came from Indiegogo. So we could have a list of 10,000 people and only drive it to our Shopify page and raise 100 grand. So with the right product-

Brett:

Yeah. You do the math on that, that 44% of funds, you could also say that probably means 44% are there, but to the backers. So you're talking 1000 people or 1100 people or so that were new that got into this pre-funding program, crowdfunding program that this business didn't have access to prior to using Indiegogo.

Khierstyn:

Exactly. Of course, the amount of funds that you get from the platform drastically differs based on your sales volume and how popular you are on the platform. But you tend to raise a little bit more through Indiegogo's community. But really, that's what it is. It's like getting your product on Amazon. You tap into this established traffic source.

Brett:

Yeah. There's something interesting too about backing a product on Kickstarter and Indiegogo. I recommend anybody on here listening that if you're not familiar with the platforms, get on there and back something. It's kind of interesting. It's kind of fun. It makes you feel like an early investor or something. I mean you're actually not an investor. You're just buying a product, but it's fun. In some ways, some of the sales resistance is lower because you're like, "Hey, this is a new idea. This is a new startup. I get to kind of see if it happens." Part of the fun is seeing if it will get-

Khierstyn:

Being part of that.

Brett:

... funded as an investor.

Khierstyn:

Yeah, because you get to be a part of bringing something awesome that you care about to life. Even if you guys or anyone watching this is serious about doing a Kickstarter, it means a lot for you to be a part of a community because you have a creator profile that people can click through and see what projects you've backed or what projects you've done. So it just really helps if-

Brett:

Social component to it, for sure.

Khierstyn:

... you're part of it.

Brett:

Social sharing and stuff, yeah. Okay, that's awesome. Great background. Let's go back to where we left off-

Khierstyn:

The goal.

Brett:

That 30% goal, trying to hit that in the first day and even the first few hours are super important. So clarify that a little bit.

Khierstyn:

Yeah. The goal is tricky because there ... This is pretty common practice where people online are going to say, "You need to set a low goal because if you let a low goal, it's easy for the algorithm to pick up."

Brett:

Sandbag a little bit, right?

Khierstyn:

Yeah. But that is too easy of an answer. That can get people into a lot of trouble. So any seasoned creator and I'll ask you what your goal is because there are two goals. There's the Kickstarter goal, then there's the real goal that you need-

Brett:

The real goal.

Khierstyn:

The real goal. You need 30% of the real goal. So if we look at some numbers that we say, okay, the goal is to raise $50,000. But on Kickstarter, we're going to put the goal at 10. The reason we pick 10 is because that is the bare minimum you actually need to fund in order to realize the goal.

Brett:

Got it. Got it. Yeah, if you hit that, you're doing it, right? You've committed to the deal, so it can't be too low or else you'll end up in a bad spot.

Khierstyn:

Yeah. If it's too low and you don't have a backup funding source from an investor or financing somewhere, you're going to run into trouble. So you have to make sure that the goal is low enough so that if you only hit just above that, you're still able to do something with that.

Brett:

Right. That's awesome. Okay, cool. So that's the number one mistake is not getting that initial traction and getting backers quickly. What are some of the other mistakes that you see rookies making or that you made in your first attempt?

Khierstyn:

Yeah. The second one is not talking to your market. The founder and I of that first campaign are both super skinny and have never struggled with weight loss and here we were selling a weight loss product. I have personally never dieted or anything. So I only guessed at what the consumers' fears, hopes, dreams, and desires were. So the copy, the positioning actually alienated the people we were going after. The second time around and now this is a-

Brett:

It's so important. I'll just do a quick side note. This applies to so much of marketing. The market really understands if you're being authentic or not or if you're speaking their language or not or if you're coming from a place of understanding or not. They sniff it out pretty quickly if something is off. So yeah, I really appreciate you mentioning that.

Khierstyn:

Yeah. Because that's something. People jump quickly to, "I have a product and I got to go to Facebook." And then they wonder why this doesn't work, because people don't take enough time to make sure that the product offer is there. What I mean by the product offer is that you not only have validated who your niche is, or niche, have validated the big pain points and the USP and the differentiator and why people ... Just truly understand why someone buys your product and what are the common objections that you need to deal with in the product development side as well as just generally using it. If you don't understand that, you're going to have an impossible time selling your product.

Brett:

Yeah, absolutely.

Khierstyn:

So you got to be a student.

Brett:

Just because it's a crowdfunding platform, people are excited to back certain products, you still have to have copy that resonates, that's empathetic, that hits hot buttons that people believe and are compelled to take action on.

Khierstyn:

You need to make them believe that you are one of them there as a savior to solve their problem.

Brett:

Great.

Khierstyn:

Not so much of a biblical sense, but you know what I mean.

Brett:

Yeah, totally get it. Yeah. Cool. That's another mistake. Any others that you would list as top mistakes to be aware of and avoid?

Khierstyn:

Yeah. This one people don't think of until it's a little too late, shipping, charging shipping. As an Amazon seller, when you pre-buy your inventory you know how much ... You can estimate good shipping rates. But when you are going to Kickstarter-

Brett:

Yeah. You should know.

Khierstyn:

You should know, yeah. When you're going to Kickstarter and you're not buying inventory until after and you don't even know how much you're going to sell or to what countries and what volume to which countries you're sending it to, it's a best guess scenario. A lot of times, if you are inexperienced with fulfillment, you're going to drastically undercharge for shipping and you're going to get the bill and it's going to cost you a lot of money. So what backers are doing or I'm sorry, what campaigners are doing now is they're starting to charge shipping after the campaign.

Khierstyn:

There's a bit of backlash online about this because some backers, people that actually buy these products, they feel a little misled. It's misled because of poor communication on the part of the product creator. So two things to do here, with your shipping, I would absolutely charge shipping after your campaign once you have final numbers in. There are softwares out there. We used a pledge manager. Crowd Ox or BackerKit are both great. You can charge shipping prices to backers after the campaigns ends once you-

Brett:

So these are pledge manager software. Sorry. What are the names of them again?

Khierstyn:

Yeah. One of them is Crowd Ox, C-R-O-W-D O-X. The other one's BackerKit.

Brett:

BackerKit, got it. Okay, cool. We'll link to those in the show notes as well.

Khierstyn:

Yeah. Those are great just to help you manage address changes, offer upsells, charge shipping, stuff like that.

Brett:

I get it that some backers would be offended by this, but I think a lot of people would get it if you're upfront about it, if you mention that you're doing this. A lot of people realize this is a little bit of a different scenario. We're funding the creation of a brand-new product, so some of the details come later.

Khierstyn:

That's what most people don't do is they don't communicate it well.

Brett:

So communicate it. Got it.

Khierstyn:

They're just like, "Free shipping," and then they're like, "By the way, you got to pay 10 bucks." So what I would suggest so there's no backlash and you actually collect pledges is you are ... On your reward summary, the description at checkout says this. On the page it says, "It's free shipping here, but you're expected to pay this much by region later." We are very, very upfront about that.

Brett:

That's better than trying to maybe overestimate a little bit on shipping?

Khierstyn:

Yeah, because if you overestimate, you-

Brett:

It's you risk conversion, right?

Khierstyn:

... probably decreased your cart value, yeah. Conversion's not cart value. Yes, exactly. Because someone will get to checkout and be like, "$25 for this thing? No way."

Brett:

Yeah, yeah. And the price is only 25 bucks or whatever, yeah. Okay, got it. So charge shipping afterwards. Make it clear. Make it upfront. I think this is the only scenario where you could charge your shipping later and people would be okay with it. But they'll only be okay with it if they're expecting it and if you manage those expectations. Got it.

Khierstyn:

Yep.

Brett:

Okay, fantastic. Any other mistakes to avoid?

Khierstyn:

I think people underestimate the amount of time it takes to build an audience. That's one. Start as soon as you can. It doesn't have to be perfect. I have a lot of people who they come to me and they're like, "We don't have our perfect prototype images yet." I'm like, "You don't need that." You need just basic. One of the companies I'm working with does a guitar amplifier and we did the version one with them. Now we're doing the version two. The version two, we literally only have renders, but we're like, "It's okay." Because we have some footage from the past product and we're just animating something together until we have a final reveal and things are great.

Brett:

Very cool.

Khierstyn:

You have to start.

Brett:

Audience-building more important than getting the perfect prototype or the perfect picture or whatever.

Khierstyn:

Yeah. Because with your audience-building comes talking to your customers, comes play testing with people. Everything stems from you going out and talking to your market about your product.

Brett:

Great. Okay, awesome. This has been super helpful. Now I'll know we'll be likely hitting some of the same things, but from a slightly different angle. What are the steps to take? What do we do to get ready? We've decided. We're going to launch. What are the initial steps we take?

Khierstyn:

First off, make sure your product is validated. Don't just throw it up and hope for the best. Make sure it's validated and you've talked to at least 20 people in your niche about your product, for one. And then you'll have a pretty good understanding of what they deal with. And then the next step is to start audience-building. There's two ways I like to build an audience. First off, I'm a huge fan of an email list. There's a lot of launch strategies around ManyChat or TikTok or social media or whatever. But nothing replaces email for that one-on-one communication channel.

Khierstyn:

I do email. But I want to build a list and there's two ways we do it. The first one we focus on organic marketing strategies. Organic, to me, means anything you don't directly have to pay for or pay a lot for. So that in its basic sense is friends and family. You have friends and family who will support you with your launch. The second would be paid advertising. Paid ads will come down to my channels I use are Facebook and Instagram with that.

Brett:

So then are there any specific formulas or tips on how to build those ads to launch a fundraising play or any of the organic tips as well?

Khierstyn:

We'll do Facebook. A lot of people will go for the cheapest cost per lead. You've heard of lead ads, right?

Brett:

Sure. Yep.

Khierstyn:

Okay. The difference is in the funnels. A lead ad is where when someone sees your ad, they just subscribe right on Facebook. There's no landing page. They never leave Facebook, which is why those leads are so cheap because it's just a, "This looks interesting. Here's my email." The way we do it is a much higher cost per lead, but I will tell you why we do it this way. Doing it where we get someone to click on an ad, it takes them off of Facebook to your landing page where they then have to subscribe.

Khierstyn:

We make it harder for someone to do it, which means by that extra step, the person subscribing to your page is more qualified because we have forced them to read the copy, watch the video, whatever. And then they're like, "No, I get this. I'm in." The cost per lead, if we say on a lead ad can be 50 or 60 cents, doing the way we do it is $2, $1.50 to $2.50. It may seem crazy, but here's where this really matters. When you have someone who comes in from a lead ad, they are going to forget about you in 30 seconds.

Khierstyn:

They're not super qualified. Not qualified means the conversion rate of your list built through a lead ad is going to be dramatically lower than that where you've had to get someone onto your page and prove that they're interested. This is just how we do it. While the cost per lead is much higher getting them off, I much go for quality over quantity.

Brett:

100%.

Khierstyn:

Yeah. That's one thing with Facebook. Even their Facebook Support, their customer service recommends lead ads because they just want performance. It's like, no, you got to look at the big picture with it.

Brett:

Yeah. It's good for Facebook too because people don't leave the platform. They just enter their info there and now they're on Facebook where they can see other ads and Facebook can make more revenue. But it totally makes sense. So those 50 cent conversions are actually worthless for the most part, where the $2 whatever leads are very valuable. That totally makes sense. Great.

Khierstyn:

So yeah. That's one thing I'll say. The other thing I'll say is I make organic outreach sound so easy. Just talk to your friends and family. But this really surprised me. As I started coaching a lot more people on how to actually go out and talk to friends and family, it is the one thing they get so hung up on because they feel like they're bothering people. They feel like there's ulterior motives and they just don't want to be that sleazy MLM person.

Brett:

They don't want to feel like they're selling them a pyramid scheme, exactly. They don't want to alienate family and friends.

Khierstyn:

They don't want to sound like that. It's just like, "Oh my God." Okay. So I just want to help anyone listening to that who's like, "That's me," that's going to impede your performance. I'm not saying force yourself to do it, but try to reframe that experience in that when I go and solicit support for my network or I get our students to do it, people especially at the Kickstarter level want to help you get something awesome off the ground. So they're inspired by what you do and they want to help support in whatever way they can. So you are actually doing them a favor by giving them some way to feel like they contributed to something bigger.

Khierstyn:

So I think it's going to help to get your friends bought into something and then seeing how they can support, even if that's not even financial support, even if it's just sharing it with five friends. You're just getting it out there.

Brett:

Yeah. This does not carry the same negative stigma that an MLM carries, at all. People will feel good about contributing to your sunscreen line or new coffee line, whatever it is. They'll feel good about that. Whereas the MLM page, we don't need to get into the psychology of it, but there's a lot of resistance there. This is totally different. People want to hear the story. So yeah, get out there and do it. You're actually shortchanging someone or robbing them of the opportunity to help you and also the opportunity for them to have some fun in the process. So get out there and tell them. Yep, exactly.

Khierstyn:

I know. These people could be your best advocates. I've coached dozens of entrepreneurs at this level and, I swear, three of them are totally comfortable going to their network and the others are like, "I don't know how to do this."

Brett:

It's so crazy. Just get over that mental hurdle. It actually becomes much easier once you get started and it is sort of fun. You got to do it. Okay, cool. So we got validate the product. Start audience building and, like you mentioned before, audience building really trumps almost anything else. So what comes next?

Khierstyn:

What comes next, I get asked by sellers, "Okay. Well, how does Kickstarter play into the bigger picture of my brand building?" So what comes next after you've done a Kickstarter campaign is that you now have a list of hundreds or thousands of people that have either bought your product or are just subscribed and they're waiting for you to go on Amazon. The next step is you actually do what I call a version two launch, which is after Kickstarter right around this time you're starting to fulfill the backers. You then use that existing audience. Maybe build it up a little bit more, but you do that to help facilitate your Amazon listing or your Shopify store.

Khierstyn:

We've done this a couple times where with Jamstack, the guitar amplifier, we did a two-month-long crowdfunding campaign, raised about a quarter million. We then had eight months to fulfill because of some hardware glitches and whatever. So in that eight months we kept preorders going and we raised about a million by the time we officially started fulfilling. And then we said, "Well, no. Let's not do a soft launch on Shopify. Let's do a big celebration saying we're officially available and put some ... Just make an event out it." That first month we did 112,000 on Shopify.

Brett:

Wow. Wow.

Khierstyn:

I just look for any excuse to create an event and maybe do a sale or do something around it to get you on another platform. So that's really what you do.

Brett:

So version two doesn't necessarily mean it's version two of the product. It'll like launch 2.0 type thing.

Khierstyn:

Exactly, yeah.

Brett:

Okay. Got it.

Khierstyn:

We are out of preorder mode, two-day shipping. We got this.

Brett:

Very cool. Very cool. That's awesome. I love that. Because yeah, that's the real key here, getting a nice product launch is great. Getting that influx of cash, whether it's $100,000 or 590 or 1.1 million with James back there, it's all valuable. But if you can't translate that into sustainable business, then it's just kind of a flash in the pan. So that's how you can help start using it to build your brand. Okay.

Khierstyn:

Yeah, exactly.

Brett:

Awesome. Cool. What's next?

Khierstyn:

For?

Brett:

For the process. We got validate the product, building the audience, launch version two. What would come next?

Khierstyn:

Right. Scale. I find that when you launch your Kickstarter ... We're kind of past that. But yeah, then you launch on the platforms. But then really what comes next is scaling your business. So you want to have processes in place, really the habits that you've built through every single day execution of building an audience. Your number one goal now isn't building the email list. Your number one goal is getting traffic to your site. You want to have a system in place to continue to build your brand, build your tribe.

Khierstyn:

That comes down to a host of having a really good organic strategy around maybe the founder getting on podcasts, doing JVs with people, doing giveaway contests, having a solid content marketing strategy. And then once you have that foundation good, you can start testing paid ads and looking to scale that way.

Brett:

Love it. Love it. Fantastic. Let's talk a little bit about platforms because I think this is something, one, I'm interested in knowing your perspective. But two, I think a lot of people are asking, "Well, do I use Kickstarter? Do I use Indiegogo? Do I do something else?" What advice would you give? I know you alluded to a little bit of the differences between the platforms a minute ago in that Kickstarter requires you to get all of your funding. It sounds like Indiegogo does not. What are the other differences to consider?

Khierstyn:

Yeah. A couple differences, first off, if you're wondering which platform you should launch on, I would do a quick Google search to find similar products to yours and see what platform does better, Indiegogo or Kickstarter. Sometimes it's not that easy. Kickstarter's the default that people go to because it's the Kleenex brand of the industry. They have three times the traffic and community Indiegogo does. But I actually think that I prefer Indiegogo most times because with Indiegogo still being a giant of a platform, but they're like the underdog. So they do everything-

Brett:

They'll lead you to break through there too. If Kickstarter's three times the size, it's also maybe three times as competitive as well.

Khierstyn:

Yeah, it's three times as competitive, which means it's more expensive to rank on Kickstarter, more expensive to get the kind of community support that you'd get. So Indiegogo, you're going to end up raising more from their community and they're super hungry to help you. So if you like your project, you can create deals with them to get listed in their newsletter. You can create deals for support. You can't even get someone from Kickstarter on the phone unless if you have a really, really good in.

Brett:

Got it.

Khierstyn:

I think Indiegogo just offers way more support, more flexible, and less competition on the platform.

Brett:

Cool. That makes sense. But I love that also looking at, okay, just do a quick Google search. See if there's similar products on each platform and also looking at maybe how they performed, and then what kind of numbers you're seeing in the platforms as well.

Khierstyn:

Exactly.

Brett:

You mentioned before considering what products are a good fit for crowdfunding because it sounds like there could be some companies, some categories where crowdfunding isn't even a good idea.

Khierstyn:

Yeah. Most consumer products are good for crowdfunding. If you have an app that serves dentists or you have an app that serves social media professionals or anywhere that your end user is the business, then that's not Kickstarter for you.

Brett:

Yeah, B2B, professional services, that's not good.

Khierstyn:

No. Consumers is your end goal. Products, any product-ish can do well on Kickstarter, assuming two things. Assuming, one, there is product market fit. It has to be able to sell naturally and there has to be a need for it, a need predicated by you are solving a big problem in someone's life. What I don't advise you do is-

Brett:

It's really like a perceived need too, right? It's not just that a need that you think people have, but a need that people actually have.

Khierstyn:

Yeah, exactly. One of my favorite products that we're launching is a beard straightener. I was like, "Yeah." Tank, if you're listening, I was listening. He came on and I was like ... First, I thought, "This is so dumb." But then I'm like, "A) I'm not a dude."

Brett:

Don't have a beard.

Khierstyn:

"B) Let's hear him out." He legit true seller style, he's like, "No, there's a massive demand for this."

Brett:

Interesting.

Khierstyn:

So Dave created a thing around that.

Brett:

Some guys have really scraggly, really curly beards. I keep mine high and tight so I don't need the straightener. But yeah, I could see that as a market. But again, you got to have empathy.

Khierstyn:

Huge market, yeah.

Brett:

And you knew to talk to those 20 people to validate that.

Khierstyn:

Now it's like I'm totally sold. I get it because a lot of guys buy female straighteners for $200. It's for girl's hair, not for a beard, which is a different make and stuff. But yeah, in saying that, what you don't want to launch is a private label product. There's a caveat to this. If you have a private label product that you have customized, you've improved, you've made better, and you've put a brand story around that, that's a Kickstarter campaign. But what isn't a Kickstarter campaign is something you've straight private labeled and there's literally nothing different but the packaging or the bundle.

Khierstyn:

Because you have to look at if someone can buy your product or a very, very similar version of your product on Amazon, why are they going to wait four months?

Brett:

Yeah. Not going to happen. There's got to be a brand story around it. It has to be some point of differentiation. It has to almost, maybe novel's not the right word, but it almost does have to be kind of novel and new or else people are going to say, "Well, why don't I just go pick something else?"

Khierstyn:

Exactly. But what's really common, if you were looking for a playground of new ideas, just search old Kickstarter campaigns. Everything is public. A project we're working on, they saw an awesome campaign for a product I can't mention. But the product ended up failing. The campaign did not fail, but the product failed because of deficiencies in product testing and stuff. So this Amazon seller was like, "I freaking love this idea. I've solved this exact problem. We're going to do it better." Now we're doing it.

Brett:

Nice.

Khierstyn:

So that could be another way. Essentially, you're finding problems and looking to solve it. It doesn't have to be this new drone or new futuristic technology.

Brett:

Yeah. It could be simple. It can be very, very simple, but it still has to be solving a perceived need, has to be a little bit new. It can't just be a repackaging. I love the way you phrased that. It can't just be a repackaging of what I can get right now today on Amazon. It has to be something new, but it can be very simple. I think sometimes simple is really fun and easy to sell. But it sounds like you have to have a story around it as well. Any tips? We talked a little bit about sales copy and empathy and understanding your market.

Brett:

But any tips on the copy and what needs to be there in that brand story? I'm assuming that you're going to probably want a Kickstarter video. You're going to want a video and some copy and some images or renders or whatever. What do advise there?

Khierstyn:

Don't focus on you. Okay. I'll give you an example. This is one of my favorite products, The Monk Manual. It's a planner.

Brett:

Monk Manual. It's looks leathery, looks substantial potentially.

Khierstyn:

Yep. It's good. I'm totally obsessed. We obviously launched that product, that's why I'm super biased.

Brett:

Very simple though. It's a journal.

Khierstyn:

Simple. Yeah, it's a journal. What Steve did is what I'll tell you you should do and what Steve didn't do is the what not to do. Okay. If Steve led with the video saying, "Hey, guys, support my campaign. We really need your help to bring this to life. The Monk Manual's been a dream of mine forever. It's going to mean the world to me." All about you versus how you need to sell to someone which is we created a planner for you to experience more peaceful being and purposeful doing. Here's why this matters and why we want to pass this on to you.

Khierstyn:

So all of your copy, all of your story, everything has to be around what is in it for the consumer. I think I heard this from Seth Godin years ago. Our favorite radio station is us. What's in it for me? It's your name, YFM or WYFM, whatever, right?

Brett:

Yep.

Khierstyn:

So all of your copy, your video, everything, you only come in about why this matters to you as closing the deal. But you've got to lead with the product. You've got to lead with the benefit to the consumer and what problem exactly it's solving.

Brett:

Yeah. I think the way you tie in yourself is, and you can only do this if it's authentic. You couldn't have done this for the weight loss vest because you're already skinny, so you would not be able to do this. But someone could say, "Hey, the reason I created this is because I was so frustrated. I was so frustrated that I was trying all these other things and they weren't working." So you're communicating. You're connecting with the audience that you have the same struggle as them and you are so upset or so passionate or so excited or whatever that you created a solution and here it is.

Khierstyn:

Yeah, exactly>

Brett:

That's how you work yourself in not, "I need this. This has always been a dream of mine." No one cares about that. They care about how you're going to make their life better.

Khierstyn:

In 2010, that worked. Now, it's a product marketing thing. It's a product marketing machine, so it has to be about them.

Brett:

Yeah. It's so interesting. I heard Peter Drucker, famous management consultant, he gave some advice that was really more about life and management and business success, but I think it totally ties to marketing. He says, "Don't try to be successful. Try to be useful." I think that's really good advice. We may try to-

Khierstyn:

I like that.

Brett:

This has to be successful. I have to have success with this video. Don't worry about that. Be useful. Communicate at a level that's going to make someone say, "That's going to make my life better. That's going to be super helpful."

Khierstyn:

Stephen, I forget his name, a different Steve. He's big into licensing, Stephen Key. The end of our interview he's like, "If you want to help people, help people," as his justification for why they don't do paid ads. I was like, "Oh my God. That's great." Just be authentic and help.

Brett:

Yep. And people will get it. They'll see through you or see if you're being authentic. Fantastic. So we're kind of wrapping up here near the end of our journey. This has been a ton of fun. I've thoroughly enjoyed it. If someone's listening and saying, "Hey, I need some more Khierstyn in my life for my product launches and to make this stuff successful," where can they learn more about you? And then I think you also got some free resources and stuff that people can consume.

Khierstyn:

Yeah. To make it easier for you guys, everything's on my website, so khierstyn.com. It's K-H-I-E-R-S-T-Y-N dot com. We have links to our YouTube channel, podcasts, and free resources as well. If you guys are actually considering a Kickstarter campaign, you want to learn more about the process, you could send me a quick email. Something I want to do exclusively for Brett's audience is that we have a full mentorship program called The Product Launchpad that'll take you from zero to fully up on Kickstarter.

Khierstyn:

So if you want a free 14-day trial to check that out, shoot me a quick email, subject line, Evolution. My email is k@khierstyn.com.

Brett:

K@khhierstyn.com. Excellent.

Khierstyn:

Letter K. That's it.

Brett:

Khierstyn Ross bringing the A game today. Thank you so much. This has been a blast. Really appreciate it. I'll link to everything in the show notes as well, so you can check it out at omgcommerce.com. Click on Podcast. All the details will be there. So you can find out more there. But get a hold of Khierstyn. Check out her resources, super helpful. Hey, consider Kickstarter or Indiegogo. I think it makes a lot of sense for a lot of people. With that, Khierstyn, thanks again. Really enjoyed it.

Khierstyn:

Yeah. Thanks, guys. Take care.

Brett:

Awesome. As always, we appreciate you tuning in. We would love to hear from you. What show ideas do you have? What should you like us to talk about? Also, we'd love that review on iTunes. That helps other people discover the show. With that, until next time, thank you for listening.

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Episode 139

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Dan LeBlanc - Daasity

Making Data Actionable and Developing a Data 6-Pack

What do six-packs, successful pilots and 2020 have in common? No, it’s not a drinking game. We’re talking data here people!

What do six-packs, successful pilots and 2020 have in common? No, it’s not a drinking game. We’re talking data here people! Do you know your data…like really know your data? Do you have a feel for it? Do you look at the right numbers daily?

Let’s talk pilots for just a second. If you’ve ever seen a cockpit, it looks kinda like most eCommerce dashboards - an overwhelming amount of buttons, data, dials, and meters. But pilots actually focus mostly on just a few key instruments. The rest is there to help if there’s trouble. The same should be true for the dashboards you use to run your business.

I absolutely loved this interview with Dan LeBlanc at Daasity. We cover some really important topics to help you really get a handle on managing your business. Here’s a quick rundown:

Is your data accurate? Seems like an easy question. Not always an easy answer.
Do you know what your metrics mean? It's all in the definition. If you don’t have the right definition, you can’t make good decisions.
How you should look at your Lifetime Value (LTV) and why Cohorts matter
Why contribution margin is super important plus an easy way to calculate it
Knowing your RFM - Recency, frequency, and monetary value. Here’s how to look at this and why it matters.

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Mentioned in this episode:

eE with Bill D’Alessandro

Elements Brands

Drew Sanocki

Nerd Marketing

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Dan LeBlanc - Co-Founder and CEO at Daasity

Daasity - D2C eCommerce Analytics

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Daasity on Shopify

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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 CEO of OMG Commerce. And today we're going to talk about how to make your data actionable, how to get better visibility, how to really know your numbers so you can make better decisions. And so you can grow and so you can hit profitability targets. And so you can help agencies like ours know how to better market or help your internal team know how to market. And so this was one of my favorite topics. I think this is a super, super important. I think it's one of those topics that all of you would agree is important as well, but you're maybe not giving this the time and attention it needs.

Brett:

Hey, Brett Curry here, I've got an important question for you. Where will your next big idea come from? Where will your next big breakthrough come from? Or where will your next little tweak or little improvement come from? Have a suggestion, check out our guides and resources at OMGCommerce.com. Are you looking to enhance your YouTube ads game? We have two of the best YouTube ad resources that are completely free. Our YouTube ad examples and templates guide and our guide to getting authentic video customer testimonials, but it doesn't stop there. We also have guides on how to maximize sponsored brand video on Amazon and Amazon DSP and Google shopping and a variety of other things. So get these free guides, give them to your team, even share them with your agency, just to take advantage of these resources and up your game. Let OMG Commerce help. And now back to the show.

Brett:

I am bringing you on and I'm delighted to welcome to the show, the CEO and co-founder of Daasity, and he is a wizard of data and analytics, and they've got an amazing tool and platform they built to help with data and analytics as well. And so with that, Dan, welcome to the show, man, how are you doing?

Dan:

I'm doing great, Brett. Thanks very much for having us on board. We're super excited to be part of the podcast.

Brett:

Yeah. Really excited to have you here. I got to meet one of your other team members, Jeremy, who was actually on the podcast as well. And after I saw a little bit about what you guys are doing, I was blown away. And so then that led to you and I chatting and they were like, "Hey, let's kick out about data. Let's do a podcast." And so we will nerd out a little bit on this podcast. We'll also make sure this is actionable and useful and practical. So if you are one of those people that hate numbers, make you squeamish, maybe you did not like math in school. I think he liked the numbers as it pertains to your money. And so we'll make this very useful.

Brett:

So, Dan, give us a quick background, let's say background on you. How did you get to this place in your career? And then let's talk a little bit about what Daasity is, we'll we'll circle back to that later as well, and then we'll dig into some topics here.

Dan:

Yeah, absolutely Brett. So I started off, working in financial services and then made a jump into e-commerce in the mid 2000s working for a really large gifting brand called ProFlowers, helping them with their customer analytics. And they got bought by a company called FTD. And what was interesting is I had a lot of friends that ended up leaving and they went to some really cool brands, like Movement Watches and Kopari and they-

Brett:

..all those companies?

Dan:

And they were all on this platform at the time. I hadn't heard of Shopify, which we all know now, which is a great platform to be on if you're an e-commerce brand. And one of the challenges they had was just getting access to their data. And so they said, "Hey Dan, can you help me? Can you help me get rich data like what we had a Pro Flowers to make really good business decisions." And, so started cobbling together a couple of things, realized that I kept redoing the same thing. Some of the tools that we were using didn't really work that well. And so that's how Daasity was founded. So launched the business really to help these brands and a lot more brands today, whether you're small. So we power brands that are over a billion, we power brands that are less than a million just help them get access to all this data and make really smart, faster decisions.

Brett:

I love it. And I think this really comes down to one getting accurate data. Understanding what you're looking at, having that clear visibility, but then also focusing on the right things. So you can take action and do things that will actually move the needle and make an improvement. And so I'm really excited to dive in. We have several topics that are super important. I'm going to give like an offline example real quick to maybe frame this. It's going to seem weird, but I think it totally relates. So we're building a new deck at our house, so it's a good sized deck. It's got steel columns and brick and cedar, and it's about 800 square feet. It's pretty large. And so anyway having fun with this project, I'm not doing any of it, I'm hiring it all out. So that's why it's structurally sound because I'm not a handyman or a builder.

Brett:

But I was in my basement about a week ago doing a workout. And I was laying down on a mat doing abs and kind of hating life. But from that perspective, I could see through the window, up on the bottom of the deck and I noticed something, I noticed there was something stuck and needed to be fixed. So anyway, we took care of it. It was not a big deal. It was just one of those reminders of if I'd just been going about my business and walking around, I never would have seen this, but because I had this unique perspective and unique angle, I clearly saw a problem and we fixed it. And so that was not... didn't have a huge bearing on my life, but it was a great reminder that you got to get the right visibility. And if you're just kind of walking around doing your thing, handling the day to day without the right visibility, you're missing things and you're potentially missing really important things.

Brett:

And so, I'm excited to dive into this topic. Let's maybe talk first about making sure your data is reporting correctly. Because you have visibility, but you have visibility of the wrong data or you're taking action on the wrong data then that's a problem. So how do we make sure that our reporting is accurate?

Dan:

Yeah. That's a great question, Brett. When brands are starting, there's a couple of basics that everybody does. You have your e-commerce platform and it's pretty hard to mess up things on your e-commerce platform, but then you have these other things that you're maybe doing, like setting up Google Analytics, setting up your Facebook, setting up your Google Ads. Those are kind of the core for most of us. And one of the first and foremost ones that I have to talk about is just Google Analytics. I have yet to come across a merchant that properly set up their Google Analytics on day one. And it's just because when you think of Google, they give you the base default is set up for any website, whether you're a WordPress site or on Shopify or whatever.

Dan:

So if you actually go look at things like, "What is my channel mapping? You're probably spending money on Facebook. And if you actually looked at Facebook, they call them UTM parameters. So go learn about UTMs. You'll see that a lot of Facebook goes to other, and yet you're probably spending money because a lot of Facebook traffic is actually people posting and sharing with each other and then there's this ad part.

Dan:

And so it's really important to go in and sort of number one thing I say is, go look at your Google Analytics, have you set up your channel mapping correctly? Have you set up your referral? The other piece that we see a lot is, now especially in the Shopify ecosystem, they've got that cool Shop App while you're seeing people with referral saying, "My conversion on referral is like 80%." Yeah, because they got sent to Shop where they paid for it and then it came back. And so it thinks that this traffic is coming from the Shop App within Shopify and you're killing it. And in reality, you just messed up your data.

Brett:

Yeah. We see that a lot with PayPal too. And PayPal has been around a long time, but if things are not set up properly, if you don't have referral exclusions in place, you could look at a report in Google Analytics and be thinking, Oh, well, PayPal is the number one driver of traffic that converse to our site. Oh, no, they're just processing the transaction, but because someone logs into PayPal, so they leave during check on them and they come back. If things aren't set up properly, Google's going to count as a traffic source. But it's not, it's just part of the checkout process.

Dan:

Exactly. So number one thing I'd say to everybody, just go make sure your Google Analytics are set. Because that's the one place where if you're a brand new store, that's just starting out, you got to get comfortable with that to understand what's going on with your business.

Brett:

Yeah. And so look at things like a referral exclusions, turn on enhanced e-commerce, some of those basic functionalities in Google Analytics, because it is exceptionally important. But I think people are either under utilizing it or they're not looking at it enough to notice if there are discrepancies and issues and things like that. So, let's talk about another topic that we talked about as we were prepping. Should we use the session data or user data and why? And probably would be good if you explain the difference between the two as we converse.

Dan:

Yeah. I'm a big proponent of looking at sessions and if you're ever... And even for those more advanced merchants out there that are starting to think about building a model that might... or a forecast, that's going to say, this is the amount of traffic that I think I'm going to get is to always look at sessions. The difference between a user and a session, a session is a single visit within a 30 minute time period. So if you leave the site, 30 minutes later you come back to the site, it gets tagged as another session. That's kind of the default Google Analytics. You can go and adjust that if you want. A user is like a specific device. How you report gets really ..

Brett:

And that's a really interesting distinction because most people think of user as an individual person, but it can't be that because Google doesn't really know, right?

Dan:

Exactly. So it's your device. So if I'm on my phone and I click on a Facebook ad and I open up and it opens up and say, Google and I go to the website, that's going to be one user in one session. And then let's say I close my browser. I get in the car and go to work, whatever, get there. Then I open up my browser and it's like, "Oh yeah, I wanted to go buy that thing." So I go back to the site again. So that first one I would have come in from Facebook, that second one, I would have been direct. Now, if I go in and look at my data, I had two sessions and it was Dan is the same person, the same device.

Brett:

Same device, yeah. Dan's device.

Dan:

Dan's device. If I go look at how many users did I have and how many sessions did I have with no channel mapping and Google Analytics. It's going to tell me there are two sessions and one user. But now if I go and bring in the dimension of, I want to know how many users and sessions by channel, I came to that site, those two sessions came from different channels. So it's going to tell me one session and one user for Facebook and one session, one user for direct. So I'm going to think that I had two users if I summed that all up and I didn't. And so the problem with users is that user number is going to change depending upon how you're slicing and dicing that data. Whereas the session data will always add up, the sums are always going to be the same.

Dan:

And one of the biggest challenges that I see across many merchants is, well, who's data is right? Well, I pulled this and know my numbers right. We got this many users yesterday and Brett's telling me we had this many users yesterday and then we get into an argument about whose number of users was right. And it's because we pulled the data differently. And so you want to find those metrics that are consistent. And that's for me, why I always say, use sessions no matter how you slice and dice it, the number of sessions doesn't change, but everything else does.

Brett:

Yeah. And I love that because the data only becomes meaningful and actionable if you slice and dice it. If you look at it by channel or by source medium or whatever. And so I would agree with you that session data is most important there. And one of the things that I think is important to understand about data is, we're talking about getting accurate data and this data's wrong or that data's right, or whatever. I think what's also really important to understand and discuss is, there's not necessarily right or wrong data. It's just understanding what is the data, what's the definition of this metric. Because I think a lot of times people say, "Oh, that's wrong." Well, it's not wrong, it's just you don't understand how that's being measured, what that metric actually is. And so I think that's important too, to understand what's being measured.

Brett:

That leads me into the next point pretty well, is looking at cost per order versus cost per acquisition and how those are defined and how thinking about that differently might be important. So you want to speak to that a little bit.

Dan:

Yeah. You're so right about, it's the definition and it is something where we take it on here at Daasity, something that we need to do, which is how do we educate people around this specific definition of a metric? And because it's very scary to me. And this one is one that I'm super passionate about is how an entire industry can get something wrong. So everybody talks about Facebook CPAs, and they talk about it as cost per acquisition. For me, one of the greatest ways of helping educate everybody the wrong value, because they cost per acquisition should be the cost to acquire a customer. And that is the first order. So it's the first order because when you think about cost per acquisition, you're trying to understand what did it cost for me to acquire a customer. And then I usually about it as lifetime value.

Dan:

Well, Facebook says is cost per orders. They have no idea, a cost per acquisition. There it's really a definition for them around cost to acquire an order. It's really what I would call a cost per order or a CPO. And that's because Facebook has no idea if the order that they're counting was the first order, the fifth order or the 10th order. So what they've done is, we all knew that, "Oh, we've got to really think about the CPA cost. And we want to keep that low when we combine that with our lifetime value to understand how profitable our customers are." And they went and kind of hijacked the term and said, "Well, every order is going to be a cost to acquire a customer because you should be so thankful that we've helped you to acquire a customer." And so, yes. So for me, you have to be clear around when you're talking about a cost per acquisition, it's the first order. When you're talking about all orders, it's a cost per order. And those can be wildly different and you probably want them to be wildly different.

Brett:

You want them to be different. Yeah, you should. Especially if you're in a business where there are repeat orders and where there's substantial lifetime value, you're going to probably attribute a different value to that true cost per acquisition, the cost to acquire a new customer versus the cost for a repeat sale. And sophisticated marketers will typically look at, "Hey, here's my top of funnel. I'll just use CPA because .. the CPA. So forgive me then. But here's our CPA for top of funnel. Here's the CPA or CPO for remarketing or for reorders." And those numbers should be different because you've already paid to get that customer once. So not that you shouldn't have to pay to get them to order again, but you should probably pay a different rate.

Dan:

Absolutely. I love looking at what my channel makes on first order versus repeat, because you've already bought the customer now, hopefully they're coming in through your email or your SMS or other stuff because they've learned about you versus you paying to acquire, to pay that second order coming through something like this.

Brett:

Yeah. Because it can be a real bummer. And we do a lot with YouTube and YouTube is largely top of funnel just like Facebook is. And so yeah, maybe we're willing to pay 50 or a 100 bucks to get a new customer depending on what the business is, but I probably want to pay a 100 bucks to get them to buy again. I'd rather just hit them up with email or text or a low cost remarketing ad or something. And that's where we can really make the numbers make sense.

Brett:

And so let's talk a little bit about LTV. So lifetime value, and this is one of those numbers where I remember when I first heard about this, I think I was listening to like a Jay Abraham, training way back when I was in college. I was like, "Oh, this is brilliant. This is easy. This is the metric." And then I started talking to business owners and at this time it was a brick and mortar stores, but nobody knew. Nobody knew, they get guests, but no one really knew their lifetime value. And now in the e-commerce world and I'm talking to some pretty sophisticated marketers and some great brands and people sort of know, but not really it's... And I think a lot of people have different definitions too. So talk about how you look at LTV, how you calculate it and any advice around LTV.

Dan:

Yeah. And so LTV, it's complicated. And it's mostly because it's just really hard to get the data around LTV. It's not something that most e-comm platforms give you at a box. You have to download all your orders, all your order data at the order level. So it starts to become a mess in trying to do in a spreadsheet. And you need to link the order data to a customer, really the definition of lifetime value is your gross margin. You either do it on a gross margin or contribution margin. We'll kind of come back to those in a sec, but you take that and you divide it by the number of customers. And that's your lifetime value.

Dan:

What's really important though, you can't take it on everybody, your idea of a lifetime values, you need to do it by what's called a cohort. And a cohort is just a group of customers. So a lot of times what people will do is they'll want to take a quarter or a year, how do my 2017 customers perform to my 2018 customers? And the other really important thing is you can't just do it as a straight up number. When you're thinking about things like a time period, what you need to do is essentially plot it over, take it months. Like how many customers did I acquire in 2017? What was their revenue in their first month? What was their revenue in their second month of being a customer? And that's really important because working with a current merchant today, it's like we're comparing their 2018 to 2019.

Dan:

Well, if you're a 2019 customer that I was acquired in January, there's nobody in that group in August that isn't now being in it just finished August of 2020. So the oldest customer has only been around for 20 months. So my 2018 revenue for somebody that was generated in January of 2018, they've been around for 20 plus 12, 32 months. And so I need to make sure that I only compare through month 20 to make it an apples to apples comparison. So you've got to kind of basically go take those numbers. You take your sales numbers by month, you take your total number of customers in that cohort and you basically make that division and then you just add it up. And you draw a graph, you just draw a graph and you'll get a curve and you'll get to see how your revenue over time is changing.

Brett:

And then that's what you'd like to look at is usually a cohort by year, as an example, to look at how our customer base is spending and how valuable they are on a year basis?

Dan:

Yeah. So for me, I generally look at it in two ways. I look at quarter by quarter. So I like to look at quarter and that's just a personal preference because that's a smaller group. I can see the comparisons. And I know that for most of us, we know like holiday buyers are generally not as good as buyers at the rest of the year because they're coming in on promo. They're maybe buying as a gift, they're doing that kind of thing. So I like to isolate those groups. And so I like to see how does holiday over holiday perform because those customers are really important. Am I doing a good job of getting those people return? And then I look at everybody else.

Dan:

The other way that I look at it is, I love to look at it by channel. So where can I invest? And it goes back to the CPA is where can I invest more? Because customers that come in from this channel actually perform better over time and so I should be willing to invest more into that channel to acquire those customers. So those for me are the most two is, do I look at it at the time period? Hopefully I'm getting better. As time goes on, I'm developing better product and my marketing's getting better. I'm doing better on a retention side. So hopefully year after year, my lifetime value is improving. That curve is getting better. And then secondarily, I look at it by channel to really help me make better decisions around where I want to go and adjust my marketing spend.

Brett:

Yeah. And we have so few clients that we work with that do a breakdown of LTV based on the cohort of the traffic source. So most of the... We talked to a lot of really smart marketers and really successful brands and businesses, but a lot of them are still looking at, "Okay, to acquire a new customer, regardless of the channel, we're willing to pay X. For repeat purchase. We're willing to pay Y." But what I think most people don't know is okay, a lead from Facebook is that worth the same as a lead from YouTube? And is that worth the same as a lead from Google Shopping? Don't know, you'd have to look at the numbers. There may be one channel that LTV is 10 to 20% higher than other channels. And if you knew that, then you would bump your CPA targets by 10 or 20%, you would spend more, you could be more aggressive and then more successful on that channel. But most people don't see that.

Brett:

And also I love that distinction you made. I think that's really important too, yeah, for some businesses, especially if you're a giftable product, which not all products are giftable, but then separating out that holiday traffic, that holiday shopper, because you may find their LTV is lower, which is fine. Holiday is going to be important no matter what, but looking at it and being able to make those decisions based on the real value is so important.

Brett:

Yeah. Awesome. You mentioned contribution margin, I want to talk about that real quick because there... Actually a recommendation, everybody listening, go back and listen to the episode I did with my buddy Bill D'Alessandro and Bill is with Elements Brands. I think six or so different e-commerce brands, brilliant marketer. He talks about contribution margin. He says it's the metric to rule all metrics. And then you don't want to argue with Bill, he's a smart guy, but Dan, talk about contribution margin. What is it and why is it so important?

Dan:

Yeah. So contribution margin. So a lot of people... You should be able to know your gross margin, which is really just basically what are your net sales. So you include returns and you basically take out the product costs. And that's a great benchmark because if you think of big publicly traded companies that sell consumer products, if you're not above a 60% gross margin, they are telling you, you have a problem with your business. So you think of that as a great benchmark. If you don't have that, if you're not above that from a gross margin and you can put skew costs into Shopify now, so it can help you with that, figure out what that gross-

Brett:

.. sales price, less cogs, less cost of good sold should be-

Dan:

Cost of goods sold.

Brett:

Yeah.

Dan:

Should be greater than 60%. And that's a great benchmark. Your contribution margin now takes at that fulfillment marketing cost. And so that's really important because the only thing left is going to be your overhead. What you're paying for maybe space, for salaries that are not very flexible, but you have the ability to adjust what that marketing cost is going to be. And that's why that contribution margin is so important is, you're going to decide like generally your cogs are fixed, generally your salaries and that kind of stuff is fixed. And so this is the margin that you can play with to decide, do I need to be driving growth or do I need to be focusing on profitability? And that's when you're... I can't tell you what the right answer is. Actually..

Brett:

Right, because the answer is not the same for everybody.

Dan:

Exactly. Yeah, because it's not the same for everybody. And I've had discussions with some CFOs of larger companies where my argument is been, when you're in a emerging sort of space or you're a younger brand and you think there is market opportunity, you should be willing to almost go to zero on a contribution margin perspective, because your goal is to acquire as many customers as you can and you need to track that lifetime value in conjunction with it to make sure that they're coming back and they're returning, but you want to go capture land. And then as your business maybe matures, you're going to start to think about, "Well, how do I reduce that marketing cost?" Your repeat customers should be hopefully coming into channels that you own. So that marketing cost starts to go down for you to be able to... Maybe you won't grow as fast, but you're now really going to ramp up that profitability. And that's how I think about that contribution margin.

Dan:

The hard part is, it's really fricking difficult to calculate. Because even lifetime values, we were talking about that lifetime value and being able to do it by channel. So I can go into my e-commerce platform, I can get my orders, but I don't know where the orders came from. So then I have to go figure out how do I go tie an order to my transaction, to what channel that transaction. That data is available in Google, but only through the APIs or you're going to be able to get it. So how many of you up there have your small e-commerce stores know how to program for an API? And then we start getting into contribution margin, which is, well, how much did I spend on Facebook yesterday? And what orders do I attribute to it? My Google Ads, you're trying to get all this marketing costs. And so if I was trying to do this in a spreadsheet, I'm out. I'm going to walk away on it. It's just, "My brain hurts. It's just too, too complicated." And it's-

Brett:

Your three cups of coffee and you're scratching your head, you're eventually just closing Excel and moving on.

Dan:

So that's for us, that's where we come in. That's where Daasity sort of comes in. But it's really around... Okay. So maybe you don't get to that level of detail, but at least be able to make a guesstimate. So what I can do is instead of knowing exactly, I can say, "Okay, I have this sales, I'm going to guess that on average my gross margin is 30%." And then say I'm selling something for a $100. The product cost is on average 30 bucks, I got $70. And then I just go in and maybe instead of doing it by channel and being very specific, I just go, "What did I spend yesterday? And how many orders did I get?" That gives me a number.

Brett:

Does that get you way closer than not doing it at all, right?

Dan:

Exactly. It's not perfect, but it's better to have at least that basic number than having nothing at all, because it's going to help you understand, am I on the right track or not? Because that's the scary part is, if you're not doing that, then you come back and go, you have this kind of, uh-oh, Uh-oh moment a couple of months in like, "What happened? I wasn't keeping track of what's going on," and you're trying to unravel. And so these are these things where just do that every day, just build your spreadsheet, start simple and just go from there.

Brett:

I love that because occasionally we run into people that we... I was talking to an accountant this morning, actually that works with e-commerce businesses and this came up, where we were talking about, "Hey there's a group of businesses that are out there that if you were to ask them today, are you on track to be profitable?" They'd be like, "Well, we'll wait until tax season." They wouldn't say that, but that would be the truth. They don't know. They don't know if they're profitable right now. They'll only know when they file their tax return, which is a really scary thing. So this was the type of reporting that let's you know, are we headed in the right direction? Are our marketing costs under control? Is everything lining up? Are we looking profitable right now? And that's of paramount importance obviously.

Brett:

So, let's talk about another concept and this is a concept I think I first heard from my friend Drew Sanocki with Nerd Marketing, very, very bright e-commerce entrepreneur and marketer and that's recency, frequency and monetary value and creating segments around that. You want to talk about that? How do you... First of all, what is that? And then how do you use it?

Dan:

Yeah. I love the concept of RFM, what they call RFM, recency, frequency, monetary, and I'm starting to see resurgence of people thinking about it. It was really big in the direct mail days and so this dates me, so I'm a little bit older, but you go back to the 90s, when everything was mailed. Before this e-commerce really took off, I worked for a company called Capital One. And at that time we were 1% of the total mail volume in the US, we sent so many credit card to the stations.

Brett:

That is crazy. And 1% sounds like a tiny number, but to think that one organization is responsible for 1% of all of mail. Holy crap.

Dan:

It was unbelievable. And we use this concept of recency frequency, monetary a ton. And so the idea is recency, when was the last time you bought something? When was the last time you bought something? Frequencies, how many times has this customer bought something? And monetary is... There's two ways you can think about monetary. I like to think of it as on average, what is the order value? What is your average order value? Some people do it as your total spend. I like it as more of that average because that helps you to bucket the value of that customer.And those are really interesting metrics because what they do is... You can get extremely complicated and create segmentation systems, but at the end of the day, you can take each of them and think about them in very sort of simple ways.

Dan:

The first one is let's talk about recency. People that buy more that are more recent are more likely to buy again. Somebody that bought last week is way more likely to purchase again than somebody that bought a year ago. And so, depending upon your business, you should just be thinking about things around an active group and a lapsed group. We call them lapsed. Usually for most people it's, "Did I buy within the last 12 months? Or is it more than 12 months ago?" You may have adjustments on the type of product. Great example is, let's say you're in the beauty industry. Makeup has a certain shelf life. So when somebody bought that makeup, so your active should be people that their product hasn't expired and those are longer. And by the way, I only learned a couple of months ago that actually beauty products have a shelf life. I didn't know.

Brett:

Isn't that funny? Yeah. I wouldn't have really thought a whole-

Dan:

I wouldn't have known that.

Brett:

Lot about that.

Dan:

It was really interesting. And so then you start thinking about, well, how do I sort of market to these groups as your product is coming to an expiration, you might go it's time to rebuy for those that have lapsed, well, they missed it. So now you start thinking about, how do I get them to come back? Maybe it's... I need to re-engage with them because they had gone to a competitor product versus early on it's about how do I re-engage with my brand. So you're thinking about this recency, really should help you segment how you're talking to the customer. Then on the frequency side, how many times have they bought? It is way harder to get somebody who's bought three or four times from you, they're bought in, they love your brand.

Brett:

Unless you really screw it up. They're probably good. Not that you shouldn't still conduct good email marketing and text messaging and take care of all the little details. But if they've purchased three or four times, they're likely in.

Dan:

Yeah. They like your product. So the biggest challenge is how do you get somebody from a one to two? How do you get somebody to make that second purchase? So that's another great way of thinking about my segmentation is, take somebody who's only purchased once. And there's probably a big difference between how you want to think about, now you start combining that recency and frequency. How do I take somebody that's bought once in the last three months versus once in the last... it's been three to six months and do I want to do something a little bit different?

Dan:

And then I think about that monetary side. So people that spend a lot on your product versus those that don't. Do you think about offering special promos or discounts? We all talk about the concept of surprise and delight. You want to give your valuable customers these special things and that's a great way to sort of think about it is, the frequency and the monetary, your high spenders, high shoppers. And I mean high spenders on average, not overall, those are great. Those are your super loyal. So how do you think about them differently? So what's great about RFM is it gives you an easy way to start grouping your customers and making simple segments about how do you communicate with them differently instead of treating everybody the same?

Brett:

I love that. If you think about the, the 80-20 rule, the Pareto principle, it really applies in so many things. And if you were to look at the monetary value, you'll probably find that 80% of your total revenue is coming from a group of 20% of your customers. And so you should maybe speak to them differently. You should maybe make them different offers. You should do something special for them. You're going to launch a new program or new something, mention that to them first. So understanding monetary value, very, very important. I love that. So RFM, you need to know it. You need to be thinking about it, segment your customers and then market and communicate accordingly.

Brett:

Let's talk about making data actionable. Because if we don't take action on the data, then who cares? Then it's just an academic exercise. So how do we get our data in an actionable place and and ensure that we are able to make a decisions.

Dan:

Yeah. So I love thinking about... What's interesting about an e-commerce businesses or even a direct consumer business, at the end of the day, it's crazy that it's a simplistic thing. You either get a new customer or you get a customer to buy again, that's it. Those are basically the only options that you have. And yet the details behind that are so complicated and what I love... And so I think about is like flying a plane. I love kind of planes and space.

Brett:

Me too.

Dan:

I haven't gotten on a plane in a while, but when you're walking on the plane and you look into the cockpit and you see all these instruments all over the place, and you're just thinking of yourself-

Brett:

Thousands of little knobs and tiles on the ceiling and on the... everywhere.

Dan:

Crazy. You're like, "How did they do this?" Well, it turns out that when you're flying a plane, there's only six that you look at and they call them the six pack. And they're right in the center of right behind the wheel. And that's what the pilot looks at 99% of the time. And the only time they use all the other ones is when they go figure out that something is wrong. When one of those ones is off and it's things like, how fast are you going? What's your altitude? Are you going up or down? Some basics. If you're cruising along, there's no need to worry about all the other thousand dials, but when you're not suddenly those other thousand dials become really important. So that's how I think about... That's how you need to run your business.

Dan:

And so when you're a small or really for any size, it's about what are the key measures that are the equivalent to that six pack? And I think about a couple, traffic, knowing how many people are coming to your site and we talked about it, don't use users, use sessions. Sales, average order value, units per transaction and then pick which one you want to do, either a cost per acquisition, a cost per order, or a.. I'm fine with any of those. And maybe your total marketing spend, that's all you need to track.

Dan:

And what I really say to smaller brands is, spend 15 minutes, you're going to go into your e-commerce site. You're going to go into your marketing platforms. You're going to go into your Google Analytics, just copy and paste those numbers into a spreadsheet and do those calculations and track those every day. As you get more sophisticated you want to make your life a little bit simpler and we'll talk about that in a sec, but you capture those. And why it's really important to do it on a daily basis, you're going to get a really good feel for your business. And so, because while we know some days are better than other days than e-commerce, it's like retail. Nobody goes to the mall... Not that tons of people are going to the mall right now, but it's like Fridays and Saturdays and Sundays, we're really busy at the mall and Tuesday's not so much. If you track it every day, you'll start to understand the natural consumer behavior.

Dan:

So you'll know that Wednesdays are always slow for me, for whatever reason, maybe because you send an email on Tuesdays and on Thursdays. And so you'll get a feeling for how your business. And so when you go and then that one day copy and paste something, and you're going to see something and it's going to jump out at you immediately, like, "Whoa, wait a minute." There's something wrong and it's... Okay, hold on. I got to go look at something and I've got to go look at all those other dials because something happened yesterday and that's when you go find out like, oh, it turns out that our sightseeing right of inventory and our best selling product. Oops.

Dan:

Stuff like that, where you want to capture it that say that next day to know versus letting it run on for days and you're having that uh-oh moment a couple of days later going, "Wait a minute, why don't we hit our monthly sales targets? And you should be able to do that in 10, 15 minutes. So you wake up, you do 10, 15 minutes to do that and then move on. Everything's great. Move on, go work on other stuff, if not, now you've got to dig in because that's the most important thing to keep your business running.

Brett:

I love that. So if I heard you correctly, then the key to success as an e-commerce entrepreneur, the key to success as a pilot is a good six pack. It's all about the six pack.

Dan:

Yeah.

Brett:

And I would say that a lot of people probably think that's the key to success in 2020, I need a six pack to help me through the craziness of 2020. So I fully agree with you. I think this is awesome, getting those key metrics because sometimes the minutia, like the little bitty details, you only need that if there's a problem. Otherwise you need those key metrics like you're talking about. What's interesting and we talked to a lot of people that know their numbers inside and out. Occasionally though I will be on a conversation with somebody trying to help them with their marketing. And I'll say, "So what's your average order value?" And they'll say something like, "Oh, it just depends. It's kind of here there." And I'm like, "Well, I know that it depends, but then you need to have an average. How are you calculating your average, have any idea?" And so that's just an indication that someone doesn't know their numbers. And if you don't know the numbers, you don't know those core, the core six pack of your numbers, then you won't know when something's off.

Brett:

But yeah, I totally agree with you if you're looking at those every day and it doesn't take a lot of time, you'll get the feel for it. And you'll sense when something is off and then you'll be able to respond quicker, take action quicker, be able to dig deeper into those with the other layers of metrics and then make the right decision. So that's awesome.

Brett:

I want to transition a bit and talk about Daasity, your company. And if you have other points you want to throw into what we just talked about, feel free to do that along the way. But the company is super cool. I want you to first explain the name to people because that's kind of clever as well. And then talk about why you guys formed Daasity and what does Daasity do?

Dan:

Yeah, so Daasity, it stands for data as a service. So we thought of ourselves-

Brett:

Data as a service.

Dan:

Exactly. So we thought of ourselves, one of the things going back to how the company was really formed based on working with a couple of brands that were having these data problems, it was really clear that as e-commerce and direct consumers proliferated this whole digital piece, and even with Amazon more and more people selling their product on Amazon, it's just really hard to get all the data from all these different places, put them together and make decisions. And so I think about one of the merchants that we worked with where, he was spending two hours every day on nine different Amazon sites. Because if you're around the world, you are in a couple of Amazon's like they don't talk to each other. So you got to go.... Even if you're selling in the US, it's like you got to go into your US one, your Canada one, your Mexico one, and download all the data separately. And he's spending a couple hours every day in the spreadsheets trying to put together his six pack.

Dan:

And so, as I thought about that, as these businesses were growing, that's just a lot of time where you as a founder or the owner, or a key employee within the organization, you're doing a lot of stuff where it's just kind of make work. You're not really driving decisions, you're spending a lot of time just trying to put stuff together. And as your business grows and you add more channels, it becomes more complex. So if I just start off as I'm on Shopify and I do Facebook and Google Ads, like maybe it takes me 15 minutes. Now you start going, well, I'm going to be on Pinterest. And then I'm going to advertise on Snapchat. And it just blows up. Oh, and we're going to start selling on Amazon and-

Brett:

And start selling on Walmart. And Walmart..

Dan:

Exactly. I think that's super cool that Shopify is connecting to Walmart and it just becomes more and more complicated. And so at some point, either your spreadsheet breaks or you start taking too much time, and that's where-

Brett:

You break.

Dan:

That's where I think about is that... What we're doing is we're essentially taking that concept of that spreadsheet and putting it in a data warehouse, and then we're letting you connect... We're bringing all the different data, but more than that, we're combining it all. And so we've spent years kind of, how do you combine it all? How do I do something? It's not very useful for me to see... We all know if you're on Amazon, you've probably experienced the Amazon skews are never what you have elsewhere because they just don't like to give you the skew, the name that you want. And so now you have to do all this translation. If you're in the spreadsheet, well, we give you the capability to do that all in one. So you can see your Amazon sales and your Shopify sales, all in one slice and dice by skew. So I can see how many products you're selling on, of this product or how many units of this product are selling on Amazon versus Shopify?

Dan:

And that's really important because I've maybe got to decide, how much am I going to ship to Amazon for FBA versus how much do I keep in my warehouse for myself? And so I think about it, as your business becomes more complex, you need the ability to be able to centralize and have one place to view all this data and for you to get out of what I think of this spreadsheet hell. And that's our goal at Daasity is, to really do that because what that then does, is it lets you make decisions faster. So instead of spending hours, days, weeks trying to put together the analysis to figure it out, it's there and you're spending your time on decisions and execution not figuring out, did I pull the right information to make a decision or not?

Brett:

Yeah. Is there an error in the formula in this cell? Or did I copy and paste this correctly? Or just little things that take up too much brain power, save all of your energy and your brain power for the decision-making process. Let something else take care of the details if you can.

Dan:

Exactly. And I'll say the other piece is when you start going to being able to extract the data to these source systems, we actually end up having the capability of doing things that you could probably never do to do yourself. Going back to what we talked about, lifetime value. It would be really hard to go and be able to create the ability to go slice and dice lifetime value by not only your marketing channels, but when you acquire them. And that's something that we provide in our platform at a box because we're not limited by a million rows in a spreadsheet, we're unlimited. And so there's just things that we're going to be able to provide insight that you're just not going to have if you try and do it yourself.

Brett:

Yeah. That's awesome. I love it. I got to see a demo with Jeremy and it's a very impressive set of tools and functionality there. So I really, really like it. So Dan, if, if someone is listening to this and they're saying, "Okay, I love these concepts. I need to get better with my data and make it more actionable. And I want to check out Daasity a little bit more." How can they learn more? Get a demo, that type of thing.

Dan:

Yeah. So you can come check us out at www.daasity.com. That's D-A-A-S-I-T-Y.com. So data as a service or just send us a note at info@daasity.com. And we are happy to give you a demo . We're also in the Shopify store. So go look us up in the Shopify store for you guys that are on the Shopify system. We're super excited about what we built out, building out some new stuff in terms of giving people. So we're going to be doing a free product later this year, just to give people access to lifetime value because we noticed that it's really important. So yeah, go look for us in the Shopify store or reach out to us, visit our website. We're happy to chat. We love helping direct consumer brands, just absolutely love it. I'm passionate about this. I'm a data nerd, just like you've read, just love helping brands just become successful. It is the one thing I love about how the world has changed over the last couple of years.

Brett:

Yeah. Passion comes through for sure. And I like to know a lot out about data. You're next level though, man. So tip my hat to you. This has been extremely valuable. We'll definitely link to everything in the show notes when that free tool comes out, we'll also make sure people are aware of that, link that in the show notes, we kind of do an update at that point as well. And so really good stuff, Dan, I know people are going to leave this podcast smarter, hopefully energized, motivated to get out there and make their data better and make it more actual. So really appreciate you coming on and sharing your knowledge.

Dan:

Thanks Brett. Appreciate it as well.

Brett:

Yeah. Absolutely. As always, we'd love to hear from you, our listeners, what would you like to hear more off? Give us some show ideas. Let us know which thing about the show. If you've not done it already, we would love that five star review on iTunes. It makes my day. It also allows other people to discover the show and hey, share this episode. If you know someone that needs to get a better handle on their data or someone on your team that needs to listen to this, share this episode, I think it will be really, really useful. And with that until next time. Thank you for listening.

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Episode 138

:

Sean Frank - Ridge Wallets

The Integrated YouTube Influencer Strategy Ridge Wallets Used to Build a $60 Million eCommerce Business

These integrated video ads are Ridge Wallets secret sauce.

There are two different types of sponsored YouTube influencer videos:

An integrated sponsored video and
Stand-alone sponsored video.

Stand alone sponsored influencer videos are what most brands use and what most people think of when they hear “YouTube influencer marketing.” Stand alone videos are typically an influencer providing a quick review or endorsement about a particular product. So the video is titled “Widget 12 Pro Unboxing and review.”

An integrated sponsored influencer videos is an ad put inside of video on a separate topic. The video might be about Fortnite or camping, or whatever, but inside the video is a 30 second ad, read by the creator, for your product. These integrated video ads are Ridge Wallets secret sauce.

Here’s a quick look at what we uncover on the show:

Why integrated sponsored videos are so great and why they scale better than stand alone influencer videos.
How to approach influencers
Why subscribers on YouTube is largely a vanity metric
How to spot a dead channel vs. an active channel
How to measure the impact of your influencer videos
What to pay influencers and how to think about CPMs (cost per thousand)
How to achieve scale in your outreach and deployment of influencer videos
Plus more!

‍

Mentioned in this episode:

The eCommerce Fuel Podcast

Andrew Youderian

TrueView

YouTube Attribution

YouTube Smart Bidding

Adzoola

eCommerceFuel Forum

‍

Sean Frank - COO at The Ridge Wallet