An eCommerce Podcast Hosted by Brett Curry

“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:

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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.

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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

:

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:

Ezra Firestone

BOOM by Cindy Joseph

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Arlen Robinson - Co-Founder and COO at OSI Affiliate Software
OSI Affiliate

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

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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!

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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

‍

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

Ezra Firestone

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

:

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!

‍

Mentioned in this episode:

Sean Frank

Ridge Wallets

eE 138 Sean Frank Ridge Wallets

eCommerceFuel Forum

‍

Adi Arezzini - Co-Founder and CEO at Teami

Teami Blends - Health Produces Inspired by the Natural Benefits of Tea

‍

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:

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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..

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Episode 142

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Phil Roireau - Gorgias

Turning Conversational Commerce Into a Competitive Advantage

Conversational commerce. What is it?

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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:

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Gorgias - Customer Service Made Easy for Online Stores

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Phil Roireau - Executive of Partnership and Business Development at Gorgias

eMarketer Amazon Prime Day
Statista Amazon Prime Day‍

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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 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

The Ridge Wallet - Slim, RFID-Blocking Metal Wallets

‍

‍

Episode Transcript:

Brett:

Hello, and welcome to another edition of The eCommerce Evolution Podcast. I'm your host, Brett Curry, CEO of OMG Commerce, and today, I can say with confidence that I think I'm going to blow your mind with a topic and with a guest that I'm pretty confident you have not heard this approach to marketing before. My guess says if you have heard little bits and pieces of it, you're not using it.

Brett:

I am just thrilled to welcome to the show Mr. Sean Frank. He's the COO of Ridge Wallets, and today, we're diving into their approach to YouTube. Now, you know if you listen to the podcast, I'm no stranger to YouTube. OMG Commerce is a big spender on YouTube Ads, specifically the YouTube Pre-Roll Ads, so we do a lot of that, and Ridge does, too, but they go beyond that and they do some really cool, blow-your-mind type of stuff. I don't say that lightly, so just excited to get into this and excited to welcome to the show Mr. Sean Frank. Sean, how's it going, man?

Sean:

I'm good, man. Thanks for having me here, Brett.

Brett:

Yeah, really excited to chat. We connected on eCommerceFuel, Mr. Andrew Youderian, a friend of mine, runs an amazing community over there. Sean, you posted kind of the way you guys approach YouTube marketing and influencer marketing and your unique look at that. I just sat there kind of dumbfounded like, "This is brilliant, this is beautiful." It was like hearing a concert and you're like, "That was amazing," but on the marketing side.

Brett:

Let's do this. Before we dive in to the ins and outs of this, give folks your background a little bit. Prior to Ridge, you ran an agency. You want to talk just a little bit about that?

Sean:

Yeah, yeah. Happy to. I ran a very small boutique agency. Tried to keep it up under 10 clients because I didn't want to hire people, that's really what it came down to. It was me and three other guys and we did everything from like the financial planning for eComm brands to Facebook Ads to everything on Google. My brother's like a programmer so he did all of the tech stuff. I met the Ridge guys like a year or two after the Kickstarter. They were a fast-growing brand. They did like a million the year before I met them and they're a father-son team and like a best friend and they really sort of focus on product and they also don't want to hire people. They started just outsourcing their marketing to us and then tech, and then it ended up being the operations. Every year that just kept doubling. We went from one million to two million, to four million, to eight million.

Sean:

Ended up being that my team hit 20 people, because we were just doing so many things for Ridge, and it just made sense for them to bring us inside, because the agency fees we so high. We merged. We still run the agency in house, but it does something very niche and specific, and I joined Ridge as the full-time COO a few years back, and it's been a crazy journey ever since.

Brett:

Yeah, that's amazing. I want to talk a little bit about the product, because I think that is a lot of what fuels this. Without the quality of this product, the creativity and the execution of what we're going to talk about today, it wouldn't matter as much, but I was telling some of the guys around the office, that I'm talking to Sean from Ridge Wallets, and they're like, "Whoa, dude, love those wallets." Talk a little bit about what the Ridge Wallet is for the few people that don't know and what makes it so great?

Sean:

Yeah, I wish I had my wallet on me, but I lost it a week ago, so I'm still looking for it. I moved apartments.

Brett:

Only you, if only you had a source where you could get another one. What will you do, you have to go on Amazon or whatever?

Sean:

Right, right. No, it's just that the men's metal minimalist wallet ... the biggest thing is it's a better designed wallet. I still have bi-fold to tri-fold, thick leather things they sit on all day. And the Ridge is a new take on that. It's made of metal, it's premium, it blocks credit card theft and all that type of stuff. And the biggest features like you can't put a lot of stuff in it. You can fit a couple bills, you can fit 12 cards, so it's about the size of a credit card, maybe a little bit thicker, and that's all you should have on you. So it's a great product, and that's the reason why all this marketing stuff works, because it starts with a good product. We're not trying to sell people snake oil.

Brett:

Right, yeah. Really, a good product makes all the difference. I think this is just where we are with transparency of reviews for the most part and information is available online. It's really weeded out the ability to be a snake oil sales person. At least for the most part.

Brett:

So these are wallets that go in front pocket, I don't know, are you a Seinfeld fan? Sean, did you ever watch Seinfeld?

Sean:

Yeah, yeah, yeah.

Brett:

The George Costanza wallet.

Sean:

Yeah, we've been trying to get Jason Alexander for a year, to get him to be in some commercials.

Brett:

That would be perfect. I'm a huge Seinfeld fan. If you're a fan of the show, you know the George Costanza wallet. Fat thing, put it in your back pocket, it throws your back off, stuff like that. I've been going front pocket wallet now for years, and it's so much better. It's way better. Now, I was only introduced to Ridge and you a very short time ago, so I'm excited to get the Ridge and upgrade my front wallet, but it's the way to go. If you still have the back wallet, come on guys, get with the program. You got to go with the front wallet, it's way better.

Brett:

So let's talk a little bit about YouTube Preroll, because that's something I talk a lot about on the podcast. So the TrueView, and TrueView for action ads. People will be familiar with that. How is Ridge utilizing TrueView and the Preroll ads on YouTube, and just speak to that a little bit?

Sean:

Yeah, yeah, so back in 2017, maybe a little bit before when were did all the marketing for Ridge, we're still super Facebook focused, and we heard from a bunch of brands that Google Display was where it's at. I'm going to take you on a little bit of a journey before we get to YouTube. We didn't really do Google Display, we did some Taboola some Criteo stuff, but we were like "Displays isn't that junky?" Isn't that bad ad space.

Brett:

Just curious, did you have any luck with Taboola? That's a fascinating one to me. I've not experimented with it, I'm just curious.

Sean:

Oh yeah, we had great results. We look at everything at Ridge on a last click basis. So before we can see if something's good or not, we have to see one to one last click returns track through Google Analytics. The reason why we do that is attribution isn't good across Facebook, or Google. It's all different, they all take credit for different things, and there's not a good solution yet. There's some cool companies that are working on good solutions, but to try to true up and make it as easy as possible, we just like the lazy thing and just start looking at last click results.

Brett:

But add a little context there, because I think most people that listen to the podcast probably have this view, and I think you guys too, because I know some other really smart marketers, that do what you're doing. You know that multiple ads lead to a conversion. That happens a lot where somebody sees an ad here on Facebook, but then they re-market it to you on YouTube, and then they click on a brand ad. So it all works together, and to really untangle that web and see what had the most impact, it's hard.

Brett:

So you're looking at last click, but you're looking for a one to one, because you realize there is a halo effect and you realize that all of it does work together. So am I understanding the way you guys look at it well, where you're looking at last click, but you're only looking for a one to one, not a three to one or something like that?

Sean:

Right, because probably 70% of our sales come from direct non or group organic or branded search. And people aren't just typing in Ridge Wallet for fun. Something makes them want to search that. And that's either a display ad or something else. But 2015 there was still a bunch of ad fraud around Display. There's bad actors in the space. So we had to have some way to know that we weren't just wasting money. We defaulted to this one to one system. I think since then Google's gotten a lot better about cleaning up some of the bad actors and limiting mobile ad app space, because there's a bunch of farms around that or whatever. Anyway, it started with Google Display. A lot of brands told us that's who you have to check out, that's where you're going to see great results, and we're like okay, let's try that. Before that it was just shopping and search on Google. We started Display, and it worked out great.

Sean:

And this was when we were going from eight million to 15 million. So we spent a bunch of money on Display, and when you spend a bunch of money on Display, you get more and more reps at Google, people try to spend more time and attention on you. And this was just around when they were pushing ... I mean they started pushing YouTube Preroll ads on us pretty aggressively. They're like once you do great on Display, we can do a bunch of really cool stuff on YouTube Preroll.

Sean:

And their tracking sucked back then. This might have been 2017, so we would do it, we would spend-

Brett:

And that was also pre TrueView for action, or either right at the beginning of TrueView for action where you could bid on a CPA basis. Wasn't that right around the beginning of that or just before?

Sean:

Yeah, and I don't even think we were in that program. They were like, "This is a great place, we'll manage the whole thing for you, we're going to get you great results." We spend $200,000 and we don't see any last click sales, where on Display we're getting one to one last click results at a clip of 8K or 10K a day.

Brett:

I'm sorry, what were the results you were getting on YouTube again?

Sean:

Nothing. We saw zero last clicks. This is when they started doing Brand Lift surveys. I don't know if they do that anymore.

Brett:

They do. Actually, what's interesting, so now it's baked into the platform, but you have to spend a certain amount, and I wish I could remember off the top of my head. It's several thousand a day, but once you get to that level of spend, I can even show you, it's in your account now. It's called Brand Lift 2.0 it's there. Yeah, it used to, you had to sign up for a study, help map out the questions or agree to the questions or whatever and then launch for a certain period of time, now it's baked into your account.

Sean:

Okay, yeah. So when we were doing it, they were trying to do anything to prove to us that it was a good channel. They were pulling very complicated reports, they were going above and beyond. So hats off to Google trying to make YouTube work.

Brett:

Asking guys on the street, "Hey, hey, hey, did you see the YouTube ad, do you have a Ridge Wallet?"

Sean:

Right, right. So I think also part of that was, we're a very small team. At this point, there was probably 15 of us, and none of us are good at creative really. We have really smart CMO, we have a really great designer, but we don't have any people to do video on our team. So we were slapping together videos, and that probably had something to do with it. We were probably a quarter of a million in spend wise, and we were just like okay, YouTube Preroll is not for us. I've always watched YouTube, today I probably spend six hours a day on it.

Brett:

I got to know, just because it's fun, what are you watching on YouTube for that many hours a day?

Sean:

Oh man-

Brett:

Are you learning, music, or you do both, what are you doing?

Sean:

Yeah, one thing is just a bunch of universities put a bunch of lectures on there, so you can learn whatever you want. At the same time-

Brett:

YouTube University, baby.

Sean:

Yeah, so there's that, and then there's also because we sponsor so many people, it's so many random videos. Anything I've ever clicked is on there, and I'm just sinking hours into it.

Sean:

So we couldn't get YouTube Prerolls to work. It was probably we were bad at creative, or we had different expectations for the platform, so we started doing ... I know there's a way for us to spend money on YouTube, because I spend a bunch of time on YouTube and I know everyone else is. That's what kind of started the influencer program, just reaching out to creators and negotiating it. I think we're going to go more in depth on that. After two years of success with that, we're like, "Okay, it's probably time for us to look back at YouTube Preroll." And now, one they've updated their attribution aggressively. So you can actually track conversions and user flow way better than ever before. It used to be you couldn't see someone who looked at a YouTube ad and then came through a search ad. They used to not be able to show you that, now they can actually do that, so it looks a lot better. The last group results are still poor, but now that we're more mature marketers, we understand more of the YouTube ecosystem and how it actually plays a part in the whole Google ecosystem.

Brett:

And are you guys running TrueView for action now? Are you bidding on a target CPA basis, or do you know?

Sean:

Yeah, we are.

Brett:

That's the way you got to do Preroll now in my opinion.

Sean:

Yeah, and so we're doing our Q4 budget planning right now, and YouTube Preroll will probably get $800,000 between now and the end of the year of our budget. So it went from being a minor part to absolutely hero, and now that we trust it more and the tracking is better, we're spending a little bit more money.

Brett:

Cool. Very cool. Okay, that's awesome. Love to hear that. And it is one of those things, just like a lot of automation, a lot of Google's automation has gotten way better over the last few years, and since that 2017 to 2020, YouTube Attribution and YouTube, the Smart Bidder for target CPA, infinitely better and really useful.

Brett:

Okay, that's awesome. Let's talk a little bit about why influencer marketing on YouTube is so great. And I know you guys do traditional influencer marketing on YouTube, and you do some really unique stuff too, which we're going to dive into, but first of all, why is influencer marketing on YouTube so great, versus influencer marketing on other platforms? And I assume you guys do influencer marketing on multiple channels.

Sean:

We started like everybody else on Instagram, and we weren't very good at it. There was other brands spending so much money per post on Instagram, at the heyday, 2015, 2017, 2018 that we were just priced out. We knew that the tracking sucks, we're never going to see it work. We haven't done an Instagram influencer deal for probably two years. So we still do some stuff on Twitch as a different platform, but that also goes right back into YouTube, and then we do some stuff on Discord, which is that messaging app, is the Discord group, we do some sponsor stuff there, and then we do some sponsor stuff on Twitter.

Sean:

YouTube takes 98% of our focus for sure.

Brett:

That's awesome. What makes it so great? Why the lion's share of your influencer marketing budget, why does it go there?

Sean:

Yeah, so we can kind of break down and do a couple .. The first thing is the value of the impression. I'm sure everyone in your audience, they're marketers, they know about business, that an impression on Facebook is if an ad shows on your screen at all. It's as long as it's around a second, or even half a second, that counts as an impression. So somebody could just go on Instagram, and just scroll, and all those ads they see is an impression.

Brett:

And it doesn't even have to be the whole ad. It can be, and I've heard different numbers, but a few pixels of the ad, or a few lines of the ad. Not the whole ad even.

Sean:

Right, right. And also, they don't tell you any of this stuff. Facebook got sued, because they were telling people that Facebook video views were more than they used to be. Anyway, we can go into that whole thing. Facebook impressions, Facebook, Instagram, they're weak. And then Display, the exact same thing. If a page loads that counts as an impression, doesn't matter if you're at the top or the bottom or anywhere in there. They have ad blocker sometimes it counts. So display impressions are weak.

Sean:

And then podcasts are typically sold on a download basis, which always are inflated. I have about 15,000 podcasts downloaded, that I'm going to listen to about 10 of them. They're already inflating their numbers, and then on top of that, we love Joe Rogan, we've done a lot of stuff with Joe Rogan, he's an awesome dude, but he puts all of his seven minutes of ads at the very beginning, because it's a better listener experience. They can skip it if they want, but that means at least some percentage of people are skipping it.

Brett:

Skipping it, yeah.

Sean:

Yeah, yeah.

Brett:

I know nobody that subscribes to this podcast does any of that. They consume it all, this is what they wait for, this is the highlight of their week. But no, you're absolutely right, so the metrics around podcasts are really poor. iTunes does a terrible job of supplying data around podcasts, so all we have to go on is downloads. Did someone listen? We don't know. So yeah, the numbers are inflated.

Sean:

Right, so also, podcasts, because the personalities, or because it's typically a more affluent audience, they charge the highest CPM. So there's a question mark about how impactful the ad is, and what the true CPM is going to be, because of the things we just talked about. At the same time, we've done podcasts that deals with NPR, and we did a big buy, six figure buy, and we get a CPM that's around $10, we've done podcast buys with more niche podcasts that want $20, and then if you go to, I don't want to put them on blast, but if you go to Time Ferriss, he's charging a really high CPM.

Brett:

I bet. I bet.

Sean:

We're talking about 50, 80, it gets up there. So the value of the impression for a YouTube influencer campaign is astronomically higher. So what we're buying, to clarify, there's two different types of videos you can pay for. One is a dedicated video, which is somebody taking eight minutes, 10 minutes talking about your product in detail, those are great for SEO if you go on YouTube and type in Ridge Wallet, you'll see a bunch of people who have done that for us. That's not what I'm talking about here. What I'm talking about here is an integrated ad. So it's 15, 30, 45 seconds, a minute, where somebody has a video, they're going to talk about whatever topic, and we're just paying for a hard spot in that video.

Brett:

So this kind of could be about anything. And I want to break this down just a little bit. So the review videos, and we see this a lot, whether it's a hair product, or skincare, or supplement, widget, whatever, you see someone, an influencer say, "Hey I want to talk to you about this new iPhone case, and here's why it's so great, and why I love it, and why I use it." That's cool. And that will show up if someone is searching for that product and review, if they're really digging into that product. But that really hits someone at the consideration stage. The consideration stage or the purchase stage. It's not an awareness play, because I would only see that, in your case, if I'm searching for Ridge Wallet review, or something like that. So what you guys are doing, this is brilliant, because I really don't know anybody else doing this who's not at scale, so you're looking for how do I reach someone higher in the funnel, but still use influencers, so here's what you do.

Sean:

Yeah, so we're reaching out to hundreds if not thousands of influencers as week and the ask is we want to pay you a flat fee to have a 30 second ad in your video. And the reason why that is so impactful, we can get into all the metrics and the details you want, but the reason why that's so impactful, and gets such good results is YouTube is one of the last platforms where people are choosing to spend time. They're choosing to spend so much time, and it's dedicated time. They're watching a video, they're watching a personality, they're interested in a topic. And Instagram isn't like that. You can follow thousands of accounts on Instagram, but if you subscribe to 15 or 20 channels on YouTube, and you're spending 40 minutes watching somebody's video, you actually care about this person's opinion. It's a true personality with a true community.

Brett:

Which that is the average watch time, you were sharing that, that 40 minutes is the average watch time on mobile? I think that's right for YouTube.

Sean:

Yeah, the average mobile session on the YouTube app is 45 minutes, which is insane.

Brett:

Crazy.

Sean:

They do a great job capturing that app. But people have creators they like and respect and that's the reason they're spending so much time watching them, and it's dedicated time. Sounds always on, you're staring at your screen. So you get 100% share voice, 100% share a screen, and it comes with a stamp of approval. There's some sort of authority attached to it, somebody you like is talking about a product and it goes a step further when you sponsor really small channels. The guys like, "Hey, this person's giving me money. This brand is giving me money." Which is a big deal, because one thing we care a lot about Ridge, and this is because we're all young people and people to pursue their dreams or whatever, but so many people want to be full-time creators, and it's so hard to rely on YouTube ad revenue to do that. You can get demonetized or whatever, so knowing that this brand is going to stand with me, and I can make videos or whatever I want, I can get thousands of dollars from them, so they're grateful for it, and the community is grateful for supporting someone they care about.

Sean:

So I would say it's the only ads that actually develop good will. No one wants to see Facebook ads, no one wants to see Display ads, but people actually, it's positive when we give a YouTuber money, because they're like, "Hey, this is a good thing that's happening for me and my life." And they feel like we're helping out a community or whatever.

Brett:

That's awesome. And so then kind of going back to this, you talk about you're putting this ad in the middle of a video, so these videos can be about anything. It can be about Fortnite or camping or outdoors, whatever. It can be any type of influencer talking about any topic that could be related to guys, because that's your market. I'm sure you got a little more specifics in there, but it really could be any guy. So now you're reaching someone, now you go to that awareness level, and different levels of awareness.

Brett:

How are you having them structure that ad, and what does that ad actually look like? And so as they kind of placed wherever in the video they want to place it, or you kind of giving them guidelines on that, letting them do whatever they want? What does that look like?

Sean:

Yeah, so we have a basic ask. We really, small pain, we have two people who do this full-time, and I oversee them. We work with, in a given month, 150, 200 creators. So we have to make it really easy. We have a little checklist thing we send them. It's like, "Hey, here's the talking points." We ship everybody products so they get a wallet, and be like, "We want you to show it on screen, we want you to show the link, talk about the discount, talk about the value props or whatever." But really it's like do whatever you think your audience is going to like best.

Brett:

Do it in your voice, right?

Sean:

Yeah, we have people who put a lot of effort into it and they make little skits around it, and they insert that in there, or they make a series about it or whatever. Other people just read the value props. At the end of the day, we always tell them look, "We don't know your audience, you know your audience, do whatever you think is going to work." We're super easy to work with, we don't require approval on any of the videos. We're just like, "Just go ahead and put it live." When it comes to timing or placement, some channels are real particular. They're like, "Look, we only do 15 second ads at the very beginning, at the very end." We're like, "Okay, if that's what you're comfortable with, go ahead and do that." Other people were just like wherever you want to put in, we want in the first third, if you can do that great, if not totally fine. But the creators like working with us, because this is going to sound somewhat mean, we're not a mobile game, and we're not a VPN. Because those are the other people spending a lot of money. It's some weird mobile game or some VPN software. So they like working with us, they think we're cool, and we make it really easy, we don't try to control their content or what they can say. They typically try to do a good job.

Brett:

That's awesome. It's a legit product. It almost, when a creator gets to the point where they can run ads, it's almost like the legitimizing thing, right? So for the content creators that maybe aren't huge, the fact that they can get an ad in their programs, it's kind of cool. It's a milestone potentially. And yeah, it's a cool product, it doesn't look questionable, or make them look like they're desperate for ad revenue, it's a legit thing and it's got a cool factor for sure.

Brett:

So you said, you're talking to did you say 200 to 300 influencers a month? You're working with that many?

Sean:

Yeah, so that's signed deals. We probably approach 1,000 in a given month. A lot of that is just man power, just finding channels, finding emails, blasting it off. But yeah, signed deals in a given month is probably 150 to 200. Yeah, yeah, it's..

Brett:

Are most of these deals ongoing, or do you do a one and done and then evaluate how it did, and maybe do it again? What does that look like?

Sean:

Yeah, so there's a couple different phases. So the first phase, we try to find three to five video, we call them tests, a test campaign, just like let's see how it goes. Once again, we look for one to one last click returns. We typically beat that, which is crazy. We're talking about people who have never heard about us seeing an ad, going through and making a purchase, and we're talking about over blowing the six figures a month spend, so we typically beat that, and any channel that gets pretty close, we will bring them back for a bigger deal. So we'll do three to five video deals. We're probably batting 70%. There's a lot of times we miss. We'll think a channel will do good, and we'll strike out, and then if something is close at all, we'll bring them back. And everyone we did a deal with that didn't work out, six months later or right before Q4, we'll revisit that deal, because there's a halo effect.

Sean:

The other thing about this ad space is it's the only evergreen ad space. If somebody makes a video about top Photoshop tips 2020, that video will get views all year, and probably next year and probably the year after, and we have our ad inserted into that video. So there's always going to be a halo effect. So even if a channel let's say we sponsored a channel, we think it's going to go great, but the algorithm goes haywire and they stop getting recommended or whatever, the deal isn't great, but in a couple months, people find that video search resurfacing, YouTube decides to recommend it, it could end up working, and we come back and we work with that guy again.

Brett:

So when you're looking at the initial measurement, and that is one other really important distinction about YouTube is that the content is evergreen and really good content actually gets better with time, it doesn't just expire, it will keep getting views potentially for years. So when you're making that initial analysis, and you're looking for that one to one last click return, what kind of window, what kind of attribution window are you looking at? Are you waiting 30 days after the first few videos are created, or what time frame are you considering there?

Sean:

Yeah, usually 90% of sales happen within the first two or three days. There will be some additional spike, but the reason we do three to five video deals is one video, there's just way too much risk. You go on any creator, they have some videos that spike, and hit a million views, some that do 200,000. So doing one video is way too risky. It's like playing Letter Black, sometimes you'll get a hit, sometimes it won't work. Because if I do multiple videos, we'll get some sort of bounce bag out of it. 90% of sales will happen in the first couple of days. We'll wait 30 days, because we do this on a rolling basis, so when their videos are done, we'll see how the first one did, that typically takes 30 days to rollout anyway, and then we'll decide then.

Brett:

That's awesome. And so again, you're asking for a three to five video deal?

Sean:

Yeah, yeah. With most creatives it's three to five video deals. And then after they prove themselves, we do a 10 or 15 video deal. Just be like the rest of the year, just post these within this rough time frame, and let us know if it doesn't work or whatever.

Brett:

Awesome. So how do you guys ... It blows me away one, you reach out to 1,000 influencers a month and end up getting contracts with 150 to 300, how do you find them? How did you map out criteria what you're looking for, very interested to hear that?

Sean:

Yeah, so the first thing I want to clarify, if you're a new brands who wants to start doing this, just personally reach out to five people you think are going to work. That's like I give people this advice all the time. I talk to a bunch of different brands. I'm like, "Look, if you want to do this, don't try to map out rich people. You'll get swamped, you'll get burned, you won't want to do it. Just as the CEO or as the director of marketing or whatever, find five people you think would do good, and just make sure you get deals with those people." You can get in touch with basically anybody you want on the internet, especially if you're like, "I'm trying to give you money, talk to me." That's the first thing.

Sean:

The way we do it, is we started doing that, we started manually pulling all the videos we thought would be good, but then it gets to a point where we have to reach out to so many that we have two people internally who come with a bunch of different topics, off of Google Trends, or off of Reddit, or off of YouTube, whatever. There's a bunch of different topics, categories, hobbies, interests, just a big mess of keywords. And then we give those keywords to a VA. We're like, "Hey VA, find YouTube channels within these keywords. Type this in to YouTube, pull over the channel, the average views, the subscriber counts, the emails, everything." We look at those, we do a spot check, we make sure that they're English/language channels, we make sure the content is somewhat relevant, and then we blast that out. We call all those people.

Brett:

That's awesome. There's actually a tool you might want to consider called AdZula, got referred to it by a friend of mine, but they allow you to do all kinds of channel searches to find channels that meet certain metrics and certain criteria on YouTube, so it's kind of cool. We're just sort of getting started with it, but kind of cool stuff.

Brett:

So I love that advice, if you're just getting started, reach out to five people or so that you know. Any criteria you would give on okay yeah, maybe you just start with who you know to begin with, but should you be looking for minimum thresholds of subscribers? Should you be looking at how many views their top videos get? What should you be looking for there so we know that if this person says yes, it's likely to have some impact?

Sean:

Right, so the first thing is subscriber count as a vanity metric. Subscriber count does not matter to us at all. A lot of YouTube channels-

Brett:

Is that because a lot of people subscribe and then forget, never unsubscribe, but they really don't care about that brand anymore? Or that channel.

Sean:

Yeah, YouTube pushed subscribers in the very beginning, but they've basically deprioritized that feature. I subscribe to probably 50 accounts, but I don't see those accounts videos. They care way more about what you're interested in right now based on what you watched previously, and that's what they're sculpting your recommended based on. And almost all YouTube views come from recommended. Just so everybody knows, really the biggest invention on YouTube is that side recommended bar. When you're watching a video, recommending other videos on the side, or beneath, that's 75% of video views come from those two places. So subscriber count is a vanity metric, it's a holdover from the old days. They're never going to get rid of it, but if you subscribe to a channel and a new video comes out, there's no notification process. They added the bell to try to circumvent that and actually have you reselect your top priority ones, like get those into your feed or whatever, but YouTube they have a social feature now, they have stories now, they're doing all this different type of stuff. But subscriber count is just a vanity metric.

Sean:

YouTube trends happen in waves. So a couple years ago, prank videos were really popular. And they put up massive views. 15, 20 million, and they would have massive subscribers of 12 year-olds. All those channels are dead. The biggest thing to check for is non-dead channels. Are they posting consistently? Are their views consistent? And then it's like, is it an English language channel? YouTube's an international platform, the most subscribed channel on YouTube is key series, which is Bollywood. It's an international platform, most of our sales happen in the U.S. so we have to target English speaking companies.

Sean:

My next advice is don't go after the people that everyone else is going after. The reason why more brands will spend money on YouTube is legacy brand marketing teams are made up of people who are like 45. So they're spending money still on TV, they just got into Facebook. If you work for Pepsi, you're not being like what are the coolest YouTubers I should sponsor. And if you are trying to sponsor YouTubers you're trying to sponsor the ones you know about. The mainstream ones, the normy ones. You're like oh David Dobrik, that guys popular. So just don't try to sponsor the ones everyone else sponsors, because you'll just get into bidding wards you can't really win.

Sean:

We work with a lot of top tier YouTubers, like Philip DeFranco or the Needle Drop, or this guy JonTron. They all put up massive views and massive subscriber bases, but we don't work with David Dobrik or high pass people. Or Casey Neistat, you'll never actually end up seeing a deal get done.

Brett:

Yeah, that's really, really interesting. I think what this is hopefully doing for people is opening their eyes, we all know that YouTube is huge, there's two billion logged in monthly users. It's the second most visited site online behind Google, it's also the second biggest search engine, so people are also searching and finding videos, although, I know the recommended is where a lot of consumption is. So we see that, we get that, but understanding that there is almost an unlimited supply of influencers. You'll never run out. You'll never run out of influencers for you to reach out to, and your testament to that since you're reaching out to about 1,000 a month. When you're looking, what criteria do you have when you're saying I want to find someone that's somewhat relevant? Is that a pretty loose definition or is that clearly defined?

Sean:

It's super loose, because we don't know what's going to happen. We've tried to pull all the data in and be like okay, channels with gaming content that focus on games from this decade are the best. It's totally random. We've tried to use Patreon Subscribers as a metric for if a channel is going to work or not, because they have some sort of loyal audience that's willing to pay them money. There's no correlation. It's entirely, it seems like it's random. So channels I think are going to work out, I have a 50% chance of calling them. Channels I think are going to bomb end up doing great. Where the program is right now is we'll basically do deals with anybody. There's a couple of layers which to consider. It's like how risk adverse are you guys? Because maybe you guys should only do things that you know are going to work out, and then also how brand faith are you, because we're supposed to be showing people, sometimes you sponsor content that we end up getting flak for, you know what I mean? Either you're a brand that can deal with that, or you're a brand that can't deal with that. Both are totally fine, but that's going to affect who you can work with.

Sean:

Recurrent trend on YouTube is making videos about other YouTubers, so that's immediately a drama machine right there.

Brett:

So they got other YouTubers on blast? What's going on here then? They making fun of each other? What's the end game?

Sean:

Yeah, that's the current trend. I'm a YouTuber, and I'm going to review your video, and talk about why it sucks, and then those people are going to freak out. It's all play for views. But luckily, that trend is dying. So there's going to be-

Brett:

Good, that does not sound enjoyable. It's funny that that exists. I know you talk in a lot of eCommerce groups, and you share your knowledge openly, which by the way thank you. What are some of the mistakes you see people make? So people listen to this and they go oh man this is fantastic, I'm just going to go do it. What are some of the top mistakes you see people make?

Sean:

The number one mistake is not doing it. I'm blown away, there's probably 10 companies that aggressively spend money on YouTube with influencers. It's us, it's it's Honey, it's some mobile games, and then it's like Raycon, which is like Ray J's earbuds. So that's basically it. There's not very many people doing it. The first thing is if you've considered podcasts, YouTube ... As a podcast is, is the audio version of a YouTube video. That's really what it is. For sure, if you consider podcasts just spend money on YouTube. The second thing is brands getting in their own way. It makes for bad ads, and bad relationships with creators. And what I mean by that is writing a script of everything you want them to say. Being like this is exactly what you have to say, this is exactly what you have to show. That simply could be because agencies are doing it for brands, and agencies don't want to lose the client, so they're like don't do anything outside the script. Which makes for un-fun ad space. You want something to be engaged with. The creators want to create stuff, just let them do what they're going to do.

Brett:

Yeah, certainly give guidelines like you talked about, and give those selling points, make it easy for them, but don't tell them exactly what to do. You want it to be authentic, and you want it to ring true, and you want it to be fun.

Sean:

Yeah, yeah. And we've had videos that we pay for go live with some legitimate criticisms of us. You know what I mean. And we're like, "Hey, I guess you're right." You know what I mean? You just got to roll with the punches.

Sean:

And then the third thing would be, be willing for it to go bad. The thing about YouTube is we think we know how many views this video is going to get. It could get way more, it could get way less. It's just like creators want their videos to get views. That's the thing. I've worked with some brands who freak out if a video doesn't hit their expectations or whatever, and it's like look, don't do that. For fledgling brands where budgets are tight, and this is a big risk, the thing about Facebook is you can spend $10 a day, you can spend $500 a day, you can spend $5,000 a day more. And you can turn that up or turn it down by the minute, YouTube videos with in filters are what's called hard ad space. They can't be divvied up. You're putting this in, and if this guys going to get five million views, it's going to cost a lot of money. It's some of the only hard ad space, because even with podcasts, they can do visual insertion, so you can sell on, I could buy half of a download or whatever. Or half your total downloads. Or TV they divide it up all the time, just by market.

Sean:

So you're going to have to make a big investment, and hopefully it works out, but don't forget if it doesn't, you have to find one that will. That's why you should handpick your first ones.

Brett:

Yep, totally makes sense. And I love that mindset of, and I've got a specific question about how you price things and how you negotiate, I want to talk about that a little bit, but there's this concept I think as entrepreneurs where in the beginning we're willing to try new things, we're willing to experiment, but then as we reach a certain level of success, we sometimes then become risk adverse, and we're not as willing to step out and do something new. I think you have to have this mindset of to do something new and different like this, you have to be willing to be a rookie. You got to be willing to say, "I don't know, and the only way I'm going to know is if I do it and make a few mistakes, and have a few things go poorly." That's the only way. Obviously we take some shortcuts by learning from guys like you, and so you're not starting from scratch, but you still are going to make mistakes, but you got to be willing to go through that, because the reward on the other side is so good. That's an important mindset.

Brett:

So let's talk about this. This is a hard ad space. Maybe a video launches and it does poorly, maybe a video launches and it gets five million views. Are you just negotiating a CPM cost up front, and then you're sticking to that regardless of how many views the video gets? What does that price look like and what does that negotiation look like?

Sean:

Yeah, so we don't do that anymore. We used to be like okay we'll give you x number of dollars as a CPM, and then we'll scale up or down, and that's a good model, that's a good system, people can do that. The reason why we don't is it's really difficult to manage and track. That's the biggest thing. We don't want to have to send out 30 payments every week or whatever, 80 payments every week for these deals. We have to recalculate and do whatever. It's resources on my team. So I true that up every time.

Sean:

So I think people can do that if they have a better system, awesome. Paying for CPMs guarantees you're going to get what you pay for. But just can't do that. Over here, it would be a logistics nightmare.

Brett:

A nightmare to manage.

Sean:

So what we end up doing is, we figure out what an average amount of views is. We'll look at the last 10 videos, kind of come up what you think this next video will do, that's a lot of guess work, and then come up with what you think the fair CPM for that type of content. So the thing to remember is AdSense on YouTube doesn't pay very well. YouTube's great, I'm not going to .. about YouTube, because it's the only platform that pays you for your content. Instagram doesn't pay you for your content yet, YouTube does. So it's awesome they do that, but it doesn't pay very much. Typically, a CPM is $3 or less, and they take half. I've seen some people have $10 CPMs if you have financial content, or content that reaches a really affluent audience, but it really comes down to however your channel reacts to Preroll ads, or how your channel attracts YouTube premium subscribers. So the pay isn't great.

Sean:

So we start our negotiations at $3 CPM. So we're like you're getting-

Brett:

Which is double what they would get from YouTube itself.

Sean:

Right, right. Because it is a harder ask. You can just put a video up and start making money, but you have to work with us, we have to ship you product, you have to talk about it, you totally get the harder ask. So we start at a $3 CPM. A lot of people say yes. A lot of people are sponsoring for the first time, like oh yeah, cool great. We're like, "Hey, you have 1,000 CPMs worth of ad space, we're going to give you $3,000 and we're going to buy three videos right now." And they're like, "Okay, sounds good." Because we're literally offering you $9,000 right now. Some people are like no. If they have agency, they have managers, they're like we want a $15 CPM. A lot of times what you'll find is for very big YouTubers there's a bunch of people selling their ad space. So there's a podcast YouTuber we're doing a deal with right now, we've been approached by two or three different managers or agencies to sell this ad space, but we can just VM that person and be like, "Hey, how much is it to actually work with you, and we can get a better deal?"

Sean:

There's a lot of sharks in the water. So yeah, we start at three on average, we probably pay $4, maybe $5. Some people are great performers, we pay $8. Philip DeFranco, his default CPM is like $17. He will not go below it, but his ad space really works. He knows what he has, he always gets a million views, so yeah, he's worth every dollar of that.

Brett:

Got it. Super interesting man. This is awesome, really. I know there's so much work that goes into it, but it sounds like it's totally worth it, and what a unique thing. You mentioned just a little bit ago, there's so few brands that are really going hard after this. And so big opportunity. I think big opportunity for someone that says, "Hey, I can actually execute this, I have someone on my team who can actually execute this. And if they follow this roadmap and learn along the way, I think they can make some huge end roads with it."

Brett:

Sean, what about those that say, "Hey, first of all I need to get a Ridge Wallet, because that's cool, that's what the cool kids do." Talk about that a little bit. And then how can people connect with you, and where can people get more of your wisdom, or is it just rarely you show up on podcasts and stuff like this?

Sean:

Yeah man, I don't use social media. I do have a LinkedIn, so you can add me there if you want to talk to me, or you can join the eCommerceFuel forum. I'm in there, you can find me there. You can email me. You can shoot me an email and we can talk about something.

Brett:

Sweet. So shout out again, Youderian, you're welcome buddy, we're plugging your forum, it's pretty great. And then yeah, go check out the Ridge Wallet. Sean, man, greatly appreciate your time and your wisdom and your transparency geeking out about this stuff. It's super cool.

Sean:

Yeah man. I think it would be better for everybody if more brands spent money on YouTube. More creators could go full-time. There would just be more diversity of ad space, and more creators would get on board. I think it would right the discrepancies we're seeing, where some people are trying to charge $20,000 for integration, some people are trying to charge $1500 and it's the same ad space. So I think it's going to be good for everybody.

Brett:

That's really good. As more creators get more ad revenue, they can reach their dream of being a full-time content creator, but that really makes YouTube then more attractive, and YouTube has been growing aggressively in terms of viewership since the lockdown and stuff. Viewership I've seen is up from around 80% or something. But yeah, the more you help the ecosystem, the more it grows, the more eyeballs are there, the more opportunity is there as well. Really cool stuff, Sean. Thank you. Much appreciated. Everyone else, as always, appreciate you tuning in. Let us know what you'd like to hear more of. Give us show ideas. Give us some insight into the burning questions or topics you'd like us to dive into.

Brett:

And with that, until next time, thank you for listening.

Brett:

I think that's a wrap. That was really good man.

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Episode 137

:

Kevin Urrutia - Chester Travel

SEO, Content & Influencer Marketing

Kevin Urrutia and team at Chester Travel are getting creative and hustling to drive sales and set themselves up for success in the future.

During a pandemic, marketing for a travel company isn’t easy. Kevin Urrutia and team at Chester Travel are getting creative and hustling to drive sales now and set themselves up for success in the future. In this episode, we talk about the perfect combination of short term and long term growth strategies. Using influencer marketing for short term growth and SEO for long term traffic and growth has proved to be a winning combination for Chester Travel and their line of modern luggage.

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

Leveraging returns and unsold inventory for influencer marketing.
Understanding the value of your product in influencer marketing.
Simple outreach for influencer marketing….you’re probably overthinking it. Try this one sentence approach.
How a solid instagram account is a necessary prerequisite for influencer marketing.
Leveraging your homepage to rank your blog posts.
Combining remarketing and SEO to drive sales.

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Mentioned in this episode:

Web Archive

Panjiva

Google Think “Navigating the ‘Messy Middle’”

Ahrefs

Tawk.to

‍

Connect with Guest: Kevin Urrutia

CHESTER - Modern Travel Luggage

‍

Episode Transcript

Brett:

Well,hello and welcome to another edition of the eCommerce EvolutionPodcast. I'm your host, Brett Curry, CEO of OMG Commerce, and I loveto dive into e-commerce stories. How are e-commerce brands growing in2020? How are e-commerce brands navigating the pandemic and preppingfor holiday and all of the crazy things that go into running ane-commerce store?

Brett:

Wealso have guides on how to maximize sponsored brand video on Amazonand Amazon DSP and Google Shopping and a variety of other things. Soget these free guides, give them to your team, even share them withyour agency, just take advantage of these resources and up your game.Let OMG Commerce help. And now back to the show. My guest today isreally a seasoned e-commerce dude. He is running a very successfulcompany called Chester that we're going to talk about primarily onthis show, but he's launched other successful e-commerce businesses,also a marketing wizard at that. And so it is my pleasure to welcometo the show and we prepped for this. I was going to try not to do it.I might butcher the last name. Thankfully, he's a gracious guy, butKevin Urrutia.

KevinUrrutia :

Urrutia.

Brett:

Urrutia.Uh, Urrutia. Okay, got it. We prepped and everything. Well, what doyou going to do with this podcast host here? But Kevin man, great tohave you on the show. Really excited to dive in and kind of hear yourstory, but real quickly before we talk about Chester and what it is,tell everybody kind of where you're hailing from now as we recordthis and give us kind of the 30 to 90 second background on Kevin.

KevinUrrutia :

Yeah.So like I said, my name is Kevin Urrutia. So basically, I'm here inNew York City, but I live in Brooklyn now. And my background iscomputer science. So growing up, I went to college in upstate NewYork in Binghamton, and then after graduation, I moved out to SanFrancisco. I wanted to work in tech. I always wanted to do a startup.That was always my dream or sort of what I read at the time. And forme, going to San Francisco was the dream so after college I did it.I'd tell people I moved to California without ever being there. Iwent there once for an interview for two hours and I flew back thenext day and that was my whole California experience, but I knew Iwanted to do it.

Brett:

Successfullyscratch that itch or how did that leave you?

KevinUrrutia :

Oh,I loved it there. When I was there, I was like, "Wow, this isexactly everything that I've read online and more." And it'slike for me, because I was living in Binghamton, upstate New York,it's like no one knows tech there. Computer science is more of thealgorithms math, where I was wanting to do start ups which is morefront end programming, databases, Ruby on Rails. That stuff isn'ttaught there .. That was a big thing back then, yeah.

Brett:

Itwas.

KevinUrrutia :

Iwas all into that. Yeah. So that's sort of where for me, findingpeople like that was very hard because most people are like, "I'ma programmer." I'm like, "Yes, I'm a programmer too, butthere's different types of programmers." There's front endprogrammers, backend programmers, and then what college teach you ismore like the fundamentals of programming, which is very differentthan making apps.

KevinUrrutia :

Soin college we were making apps and stuff. So yeah, going to SanFrancisco was the dream because everybody there was doing that and Imoved there and I was working for Mint.com and still attendinghackathons, weekend events, and everywhere you would go, you wouldjust find people like myself. I was like, "Oh, people that havejust moved there." And I was like, "Hey, want to go to thisstartup Mecca?" So that was really fun because you just met somany people that had that same mindset of, hey, we just moved here. Idon't know anybody. Let's be friends. Let's talk about tech.

Brett:

Yep.That was awesome.

KevinUrrutia :

Yeah,that was awesome. So I was like I just met so many people and evennow looking back, I was talking to somebody yesterday, and that was areferral from my boss. He was like, "Oh, Kevin does marketingnow." And he's like, "Oh, I used to work in productmarketing in San Francisco." And we're getting a drink next weekto just talk about how San Francisco is versus New York. It's likeall this stuff is crazy, but-

Brett:

It'sa small world. I mean, it's a huge, a huge city obviously and tech isa big space, but it's also small at the same time and the same withe-commerce as well. E-commerce has kind of a small community and asmall world, so to speak. So did that experience then directly leadto e-commerce or did e-commerce kind of come later?

KevinUrrutia :

Sobasically what happened was I was then working at another companycalled Zarley after Mint and there I was doing a lot of the backendprogramming because at Mint, I was doing the front end so I wanted toswitch. I was like, "Okay, I want to do backend because I thinkdatabases is fun." And at that time I was 23. I wanted to justdo something different. So while I was working at Zarley.com, I wasnoticing that I was there for about two years and I kind of wanted togo back home to New York City. And at the time, I was noticing whatsome of the companies were in the platform that were making money andit was home cleaning companies. When I say home cleaning companies, Imean more like individual maids or cleaners. So then I was like, "Oh,well wow." I'm looking at some of the stuff there and I waslike, "I'm seeing the issues as in an individual cleaner justcan't possibly take on more customers because you're just scrapped bytime like anybody, right?"

KevinUrrutia :

Timeis the most valuable resource. So eventually I was like, "Heyguys, I really want to move back to New York." I was workingremotely for like a month or two and I told them, "Hey, I reallyjust want to do my own thing." And then I thought about thatstuff, the cleaning stuff, and I was like, "Oh, what if I justmake a cleaning company?" And at this time I was kind ofthinking about traffic and SEO. And I was like, "Okay, let melook up how much cleaning services NYC gets." And I was like,"Oh, this gets 2,000 searches a month. At that time I waslearning SEO because in the previous report, I was trying to dodifferent startups and I'm trying to figure out how do I get-

Brett:

Whichwill come in later because you're doing a lot of cool SEO stuff forChester that I want to dive into, so, okay, cool. We'll put a pin inthat.

KevinUrrutia :

Yeah.So I was learning SEO and I was looking at all these.. And I waslike, "Oh, I know that this business makes money because a fewthings that back at the time, I didn't really think about it."But now I'm like, "Oh, that was actually a really gooddecision." Most things you just don't really realize it.Cleaning is a very recurring type of business where someone getscleaning once and then if you do a great job, you get it again andagain. People will, and it's actually here in New York City where-

Brett:

Lifetimecustomer value, lots of repeat purchases if you take care ofbusiness. Yeah, exactly.

KevinUrrutia :

Exactly.And for me at that time, I didn't really think about it that much.But then when we are looking at some of the data now, we're justlike, "Whoa. We have a lot of returning customers that have beenwith us for two or three years just because that loyalty is sogreat." And obviously with e-commerce, that's kind of whatyou're looking to do too. But anyway, that's sort of how I started myfirst business that kind of took off. And obviously before this, Ihad 20, 30 different things that I've done that have just failed andnever seen the light of day. And even between now to like Chester, Iwas talking to my brother, we saw BarkBox, and we started like, "Oh,we should make one too."

KevinUrrutia :

Sowe made something called Dog Subscription Box and we basically weretrying to figure out how BarkBox is trying to getting all theirproducts. And we talked to a lot of local suppliers here in Brooklynand in New York and we got their box, we got designed, we got thewebsite up, and then we invested 5, 10k to the startup. And thenwe're just like, "Wow. The margins are really, really tough. Ithink we need to be a massive scale to be a business." So we didthat and obviously we learned a ton, but that's sort of kind of .. Ilook at companies out there like BarkBox and say, "Oh, what arethey doing? I can do something like that too." Pretty much likeI saw that for Chester too. Yeah.

Brett:

Yeah.Yeah. I love that. And I think that that spirit lives inside of mostsuccessful e-commerce entrepreneurs or just entrepreneurs in generalwhere they see something and they think I could either do that betteror differently or something and not afraid to start something andfail, right. So you started something, you put 5 or $10,000 into thatstartup. It did not really gain traction or pay off for you directly,but you learned a lot and you were able to roll those learnings intothe next venture. I think that's a common trait of a goodentrepreneur as well. Not paralyzed by this fear of making a mistake,but saying, "Hey, we're going to go in on this with at leastsome kind of investment. We're going to learn. It's either going towork or if it doesn't, we're going to pivot." And so that'sawesome. So let's talk about Chester. And I think there's lots ofinteresting things about this because it is a travel based company,which wow, what a time to be in the travel business. But tell us whatis Chester and what was the motivation or inspiration behind startingthe company?

KevinUrrutia :

SoChester is a travel company and we sell mostly luggages. So our firstproduct was the carry-on. The one that you can take on with you in aplane and you don't have to pay a checked fee. So that was the firstproduct that we did. And we were doing that product for a good twoyears just selling that one size, and then-

Brett:

Whydid you launch with just the carry-on? And pre pandemic, I was afairly frequent traveler, 12 or so times a year. Love the carry-on,live on the carry-on, do not check bags. So I'm assuming you'reprobably targeting people like me as a target market, but why thecarry-on? Why'd you start with that?

KevinUrrutia :

Sotwo things. One is.. People like you where carrying on was a big onethat people wanted and people felt so much affinity to their carry-onwhere you bring it with you everywhere. It's with you all the timebecause you're doing these quick two, three day trips. And the secondbiggest reason why was that to get the mold for the other sizes wasjust too much money. We couldn't afford it. So we were just like-

Brett:

Strategicwith the audience, strategic with manufacturing. Love it. Great.

KevinUrrutia :

Sothat's really the big reason why is yeah.

Brett:

Yeah.Very good. So what was the motivation behind doing it in the firstplace/

KevinUrrutia :

Sothe reason behind Chester was we had experience with the Amazon FBAbefore we were selling outdoor gear online. And we just saw that thatspace was just getting so crowded because for that product, I mean,there's so many FBA businesses out there where you can go to likeAlibaba, Ali Express and say, "Hey guys, I have this widget. Canyou make it for me, right?" And then they're like, "Okay,great. What label do you want on it?" Very simple to get theproduct made, which is great for new businesses and entrepreneurs andthat's how we started our first outdoor company after Made Sailors,right, we were doing that. We just went to their factories and I'vebeen to China three times already to the Canton Fair to meet thesuppliers because no matter what business or product you're doing,you can meet them and you get better prices and you can find fromfactories.

KevinUrrutia :

SoI always tell people that's always a great thing to do, but thebarrier to entry was so easy. You just send them an image and theycan make it. So we did that for a year. The company's still running.We're on the Wirecutter, New York Times. So then we wanted to doanother e-commerce company. And then we just saw those learnings frombefore where we're like, "What's a product that's hard to makethat someone can't just go in and say, "Hey, I want to makethis." And for us, we say, "Hey, look, we have somecapital. Let's find a product that's big and also we don't see toomuch competition on Amazon yet." And that's where came withChester. We saw luggages really being popular as a D to C sort ofthing, right. People are sending out direct to consumer, but no onewas really selling on Amazon. And we knew from experience that Amazonis 50% of sales in the USA. So all these premium luggages wereselling direct to consumers, but hey, you're missing a market ofAmazon where people are actually looking for this product.

Brett:

That'sfantastic.

KevinUrrutia :

Soit was a combination of... Yeah.

Brett:

No,go ahead.

KevinUrrutia :

Sofor us it was a combination of both, of previous experience ofknowing like, "Hey, we don't want to be copied so easily,"but at same time we saw a gap with all these new startups sayinglike, "Hey, we're too good for Amazon."

Brett:

Yeah.Yeah. And so did you launch on Amazon to begin with or did you launchon your own site and then pivot to Amazon?

KevinUrrutia :

Sowe just launched on both platforms. So we are going to be using...Yeah, we had our website. We did WooCommerce. If you got to ChesterTravels right now, it's a brand new website. But if you look at thewebsite, maybe for the past two years, we're using a stock them, astock e-commerce theme. And if you go to the web archives, you canlook at it. And now i looks so clean. Oh my God, it looks so good.But for the past two years, we were just on a stock theme sellingstuff online. Because, I mean, you probably know, right, it's likeaesthetics are great and branding is great, but it's really aboutdoes your product solve an issue? And people are still buying with anugly site..

Brett:

Yeah.I love beautiful sites that are simple and easy to navigate and thatthey communicate the brand message. I mean, that is ideal, butultimately the product needs to be the hero. The product needs to besolving a problem. It needs to be filling a gap or a need. And if youdo that, then yeah, a simple or even an ugly site can work. And also,you just mentioned a tool that I think probably there's a lot ofpeople that listen to podcasts that don't use web archives, right. Orit used to be called the way back machine . But most SEO people knowweb archives because we're always looking at it, but it's a way tokind of look at the history of sites. Fun to look at big nationalsites too, like Amazon, and see how it's progressed over the years.But anyway.

KevinUrrutia :

Yeah.Yeah, yeah, yeah. All these tools, for me, and the reason why I saythis is because I obviously come from a marketing background too,where you look at a pretty site. People think of Chester and be like,"Oh my God, you guys are doing this full on." But I'm like,"No, this was just three, four months ago. For the past twoyears we had the ugly site, but that thing was still selling."But people think that this new pretty site is why we're selling. I'mlike, "No, that's not the reason why it's like-"

Brett:

Yeah.And I think that kind of underscores a point that, "Hey, ifyou're just launching a brand new concept, new product, there'ssomething to be said about an MVP, a minimum viable product. How dowe communicate the message clearly and effectively? We don't have tobe perfect, but how do we just get it out there, which is what youguys did so that's fantastic.

KevinUrrutia :

Well,yeah. Then going with Chester, it's like with this factory that we'vefound for Chester, same sort of thing before for FBA was that thisfactory for us, we made custom CAD designs, custom molding. Our moldfor our luggage was 150k for just that one size. So that's why forus, it was like, "Hey, this is a great barrier of entry wherepeople just can't start because they need some sort of capital."And so that's how we did. And then another great thing that we hadtoo at that time was that we knew the factory spoke all Chinese. Sowe hired somebody to work with us and gave him equity in the companyto say, "Hey, look, we want you to be our sourcing side becausewe can work with other factories, but this factory only speaksChinese and we know they're good because we've seen the luggages thatthey've made and we're just like, 'Wow, like these are good'."

KevinUrrutia :

I'mnot sure if people know this too, but if you're looking for supplieror factory, especially when you're importing from the US, there'sthis billing or label where it comes in so you can look at anyfactory, you can look at any company and see where they're importingfrom and then just reverse engineer their factory.

Brett:

Veryinteresting. Where do you find that?

KevinUrrutia :

Soyou just look up... Panjiva is a really big one. So you basically,because remember when you're importing something, the US needs toknow where's is it coming from, right? So that's exactly what it is.It's like-

Brett:

It'ssearchable. You can Google it and find where people are importing-

KevinUrrutia :

Exactly.And that's exactly what we did for the luggages. We were like, "Okay,who's making luggages?" Obviously, you probably know the bigbrands, Samsonite, TUMI, right. And so we're like, "Okay, whereare these guys making their luggages from?"

Brett:

Yeah,that's so crazy. And so I want to talk a little bit about marketingand differentiation and kind of your story. So I watched some YouTubevideos from reviewers on your product versus Away luggage and thingslike that and your product shows very favorably. It's also lessexpensive than some of the big brands and stuff. So first of all,what makes Chester unique and how do you guys communicate thatuniqueness?

KevinUrrutia :

Yeah,so uniqueness, there's a few things that's unique. Obviously, numberone is going to be pricing. We just tell people like, "Hey, weknow that we're going to be competing in this sort of price warbetween super high end and then super low end, right. So super lowend being the luggage that you see on Chinatown or the .. It's like50 bucks that you use them for a month or two and then they breakdown and then there's super high ones like Samsonite and TUMI thatcost 1k plus. And then there's the middle one where we're coming inand saying like, "Look, we're better than your cheaper ones, butalso not expensive as your other ones. And then we're about 250, 260price point." That's really where we come in and have thebiggest distinguishing factor.

KevinUrrutia :

Andof course, a big thing for us too, is going to be the straps insidethat sort of compress your clothing that we worked with the factoryto make. And then again, it's going to be the shell. So the shellscost on the way we did it, the way we designed it, and the way thecolors are. Really the big thing is, is going to be the aestheticslooks of the luggage. That's a big thing. So, but number one, Ialways say to people like, "I know it's going to be the price."So we embrace them and say, "Hey, this is why you should buy usbecause we're cheaper, but the quality is almost as good as these$1000 luggage that you're seeing online.

Brett:

Great.Yeah, love it. So we were talking offline as we were prepping thattravel is down. Travel's down. I got some friends in San Diego andthat the San Diego Airport is at 60% capacity right now, other areasare less. So it seems even now that the lock downs have lifted insome parts of the country in some parts of the world, travel is stilldown 40% to 80%, kind of depending on where you are. So how are younavigating this? What are you focusing on? What are you doing todrive sales now? Or are you focused on list building? Just talkthrough how you're handling the pandemic.

KevinUrrutia :

Yeah,so right now kind of how we're handling. Basically, once sort ofCOVID really hit, our sales, I tell people all the time, they almostdropped. On Amazon, on Facebook, and also just through our e-commercewebsite.

Brett:

Wellthat's the last thing you're thinking about, right. As a consumer,and you're wondering what's going to happen next. You're not buyingluggage because you know you're not traveling any time very soon.

KevinUrrutia :

You'renot traveling at all, yeah. So we basically knew that was coming andof course that sucked because we just have so much inventory that youneed to do, but there's nothing-

Brett:

Andyou guys we're gaining some momentum and beautiful things werehappening.

KevinUrrutia :

Yeah,got a ton of reviews on Amazon, we were like, "Oh wow, this isgoing to be a really good year for us." And then that happened.So basically at that time still, like I mentioned earlier, we stilldid SEO. So right now we were still doing SEO back then, but nowreally what we're doing right now is just really doubling down inSEO. And that for us means obviously more content that we're using torank for it, but at the same time it's obviously the other part ofSEO, which is the link building. So doing guest posts, doingoutreach. On average right now, we're trying to do between 20 to 30new guest posts a month to get-

Brett:

Wow.

KevinUrrutia :

Andthat's sort of what we're focusing because we know that SEO is alongterm. So hey, if there's nothing we can do right now, might aswell use everything we have which is just time, to rank. And that'skind of what we're doing, yeah.

Brett:

That'sfantastic. I've talked to so many people, so many smart e-commerceentrepreneurs that, especially during the thick of the lockdown, somecategories of e-commerce really saw a huge uptick in sales, increaseddemand because people couldn't shop in stores. Other sectors likehigh-end apparel or accessories and things like that really saw adip. Obviously, we have a few clients in the travel space that'spotentially one of the hardest hit of all, but regardless, or we hadsome others that were doing really well, but they had inventoryissues and they had to slow down, right.

Brett:

Butthey pivoted to something smart, right. Something that would havelongterm benefit, right. Audience building. So we're building ouremail list, we're building our remarketing list, we're building ourSMS list. Or like you and I don't talk to as many people that do whatyou're doing with SEO, but we're investing in SEO. And I love SEO.I've mentioned on the show a few times that's kind of how I got mystart in online marketing. I really don't do SEO anymore, but stillknow it.

KevinUrrutia :

LoveSEO.

Brett:

It'sfantastic. And I'm more of an ad guy now and there's huge benefits toboth, but one of the things we always used to talk about is SEO isowning traffic where paid is renting traffic. That's not a perfectanalogy, honestly, but because Google sort of owns it all. Butanyway, investing in SEO is not something that's going to create animmediate return, but it will create a return down the road. And so Ilove what you're doing. I think it's going to pay huge dividends downthe road and it already has. And so want to dig into to your strategyjust a little bit as it pertains to SEO. I do recommend everybody goto ChesterTravel.com and just check out some of the articles and theblogs and some of the stuff that they're doing because it's reallyfantastic. I love the way you have the different categories listed.So travel guides, travel tips, carry-on, packing tips, all thesethings that are just really, really useful, right. And so talk alittle bit about what is your overarching SEO strategy?

KevinUrrutia :

Yep.And yeah, similar to what you said. I'm a paid guy too now, but SEOis I still think the best sort of form of traffic if you can masterit. And the thing too is there's just a different sort of skill setyou will learn that helps with paid. But anyways, back with Chester,what we're really focusing on for Chester is just answering thesequestions that people have related to travel. The reason why, it'slike obviously this is such a high, intense sort of question, butit's bringing traffic to the website and also helps us build thesesort of remarketing lists and an email list of new things. Forexample, some of the stuff we write about are what are TSA approvedluggage locks, how to find cheap flights in 2020. Other things are wealso really focus on do really smart deleverages work, right.

KevinUrrutia :

Sopeople have all these questions. So we really like to answer thesedo, how, what questions and there's so many of these because peopleare just curious about things. So we try to rank for those things.And the next best thing that we try to rank for too is obviously youprobably know, is best of keywords. Best of keywords have such highintent and they're just great because people are looking for asolution to a problem right now. So for us, we like to rank for bestcarry-on luggage. And people always ask me like, "Oh, why wouldyou write an article about yourself?" I'm like, "Whywouldn't you write about an article about yourself?"

Brett:

Exactly.Exactly. And even though it seems counterintuitive like, "Well,of course, it's your brand. You're going to say favorable things."People will still consume that content. I saw a stat. It's from a fewyears ago now, but 70% of shoppers are willing to learn about aproduct directly from a brand. This was a YouTube study, but ifthey're learning about a brand, they're willing to watch that brand'sYouTube videos. Even though obviously then they know they're going tobe biased, people are still willing to learn that way.

KevinUrrutia :

Thething is people are willing to learn. And also the thing I tellpeople too, you probably know too, is you want to control that realestate yourself. If you can rank for it, why not? Why let acompetitor talk badly about you? And it's the same thing. It's for metoo, I always tell people the second most search term is your brandreviews so you should have a slash reviews page on your website andsort of put all the best customer reviews that you have because ifnot, you're going to get these third party sites writing about. Sofor me, it's all, yeah, I look at their search results as a realestate. You want to get the top 10 places and you want to get thepremium placements for yourself.

Brett:

Loveit. And I really, 100% agree with you on those approaches. Looking atreviews, looking at best of, best, and then whatever your category oryour specific product is. And one of the interesting things that I'veseen recently, and this was in a think by Google study callednavigating the messy middle. It's kind of about understanding theshopping journey and how messy it is and how to influence. It's agreat piece. I'll link to it in the show notes, but one of the thingsthat it showed related to our topic here is that looking back to theearly 2000s to now, it showed this graph of people searching forcheap and then fill in the blank on the product keyword and best.

Brett:

Andin the early 2000s or whenever, cheap really was mostly just thebest. And now they've kind of switched places, right? So now thereare more people searching for best fill in the blank than they arecheap fill in the blank. And I think that's just consumer preference.We want to find something that lasts. And I think that Millennialsalso kind of fall into that trend. They'd rather buy fewer things,but better things. And so yeah, so it's really an interesting trendand it sounds like you guys are capitalizing on that which is great.

KevinUrrutia :

Yeah,no. And I think so too. Even though, obviously like we said before,one of the second most searched things like cheap, blah, blah, blah,right. In your description when you're saying you're the best, say,"Hey, we might not be the cheapest and this is why, because weactually last long, we actually have a warranty." Give yourbenefits. You actually have to sell people, right. It's not just arandom story you're telling them.

Brett:

Yeah.Yeah. That's awesome. So I love what you guys are doing even with TSAapproved stuff, or I think you even talked about you found somethingand I can remember the specifics, but related to a particular airlineor whatever and you're like, "Hey, we could create a usefulpiece of content that can rank for that." How are youdetermining what keywords you want to rank for? Because creatinggood, useful content that ranks isn't easy. So how do you determinewhat you're going to try to rank for?

KevinUrrutia :

Yeah.So the best tool that I use is just .. Atreus.com. It's superexpensive, but it's probably my favorite SEO tool. I used to use Mozback in the day, but it just totally went downhill, but with Atreus,I just type in travel. And then with Atreus, what they have on thesidebar is questions people ask. So then it's like, what, how, when,the sort of things, and we were noticing that people were askinglet's say Air France. Air France baggage fees. What are the baggagefees for Air France? And we saw oh, wow, this is a really goodquestion because it really pertains to our luggage product because ifpeople are wondering how much they pay for luggage fees, we can say,"Hey, look, this is the luggage fees for Air France and by theway, if you buy our Chester, you won't have to pay for these fees.

KevinUrrutia :

Interlacethat. And then basically we saw that and then we're saying, "Okay,there's Air France," but then we also were looking. Okay, let'slook up now all the airlines. And obviously, Wikipedia has all theairlines. So then you just sort of make a quick pivot table. Say,"Okay, Air France, Delta, Southwest." And then you putthose into Atreus again. And then you say, "Okay, then you sortby keyword volume." And then you say, "Okay, let's startfrom the ones that have the most volume and then send that to awriter." And then what you do with anything it's like you justmake a brief, right. Tell people when you're hiring content writers,you can't just be like, "Hey, make me this article,"because then you've got different formats every time.

KevinUrrutia :

Youwant to say, "This is the format you want. This is what youneed. H1's, H2. This is the table you need to get. This is the listitems you need to put in. And then you have a perfect brief. I hadsomething like just make the brief once. Perfect. And then send itoff. People were like, "I've done it before too, where I'm justlike, hey, make me an article." And then you're like, "Oh,this is not what I envisioned." And it's like you can get pissedoff at the writer, but it's actually your fault."

Brett:

Exactly.Oh exactly. No, everything is your fault, right. If you hire thewrong person, it was your fault for hiring him or you don't haveclear direction and that's your fault too. But so first step isidentifying keywords. So what questions are people asking that theywant answered? So identifying those, the next piece is creatingcontent, right. And back in the early days when I was first learningSEO, you could do some kind of questionable things potentially.Content was not necessarily good. Content was not necessarily king.It was just amounts of content, back links, and all kinds of crazystuff. Now, you got to create good stuff. You got to create usefulcontent or else it's just not going to get any traction.

Brett:

Soyou're creating good stuff. And part of that, that starts with aproduct brief, but then what do you do from there, right? Becausegetting something to rank and getting some eyeballs for, hey, what isa TSA approved lock? How do you then transfer that into sales of yourluggage?

KevinUrrutia :

Yeah.So getting that to rank is important because I think with anything,ranking it's... I tell people like your homepage, I think for justranking in general for SEO, your homepage probably has a ton of linksbecause that's a natural place for the link to so make sure thatyou're at least, if you look up a list of articles you want to rankfor, make sure that they're linked to from the homepage because it'sgoing to pass more link juice, but at the same time, making sureyou're interlinking correctly and using sort of the keywords you wantto rank for.

KevinUrrutia :

Soit's like you're looking for best luggage, make sure your links arelinking there. But then how we sort of get customers from thearticles is through, we have our Facebook pixel on the pages so weuse that for remarketing to sort of show people the product that wehave. And then another thing too, is that we also have a pop up thatcomes up where we collect email for like 10% off your first sale. Sothose are the two ways that we do it. And then another way too, thatwe do at some times is we sometimes enable the online chat or we useTalk.to. And I tell people all the time with any e-commerce brands,having an online chat is so great because you can see the issues ofproblems people are having right now. And then it's a great sort ofselling tool. So that's sort of a few ways that we do it, but-

Brett:

That'sgreat. Yeah, because I think one of the things that prevents peoplefrom investing in SEO, investing the time and energy and money, isthey don't see the direct connection between SEO ranking andincreased sales. And it is a longer game, just like getting yourcontent to rank is a longer game, getting sales from your organiccontent is also a longer game, but I think you nailed it. It'sremarketing, right. So install that Facebook pixel. I'll also sayyour Google Pixel as well. Remarketing people on Google search andYouTube and GDN and stuff have those popups to capture someone that'sinterested and then yeah, chat as well. That's fantastic. What wasthe tool you just mentioned, talk dot something?

KevinUrrutia :

Talk.to.I like it. The reason why I like this chat is because I have multiplebusinesses. So then you can have one customer service rep on manybusinesses from one platform versus other ones where you have to havedifferent log-ins. So then one platform on Jennifer, other one onAmy, but it's ..

Brett:

That'sawesome. That's awesome. Fantastic. So let's pivot a little bit andat the time of this recording, it's early August, but everybody'sthinking about holiday and holiday prep and I'm actually working on awebinar right now that we're doing with our Google reps on holidayprep and a big blog post. And I'm writing on five ways to dominatethe Cyber-Five so stay tuned for those things. But one, we obviouslydon't know what's going to happen this holiday season, right. Wecan't predict what's going to happen with the virus a week from now,let alone a few months from now at the time of this recording. Ithink what is clear is that there will be increased shopping online,right. That's already happened. The lock downs forced people onlineand while stores are opening up, most online purchasing that shiftedor most purchases that shifted online, I think a lot of them aregoing to stay there. How are you guys thinking about the holidays?What are you doing to prep? And do you have any holiday predictions?

KevinUrrutia :

Yeah.So for what we're doing right now is we're just kind of going to bevery conservative just because we don't have that many sales and wedon't want to run into this risk of just having too much inventory.So what we're doing right now is just kind of looking at the rolling180 days of what sold the best and then getting enough inventory forthat because we still have a lot of inventory in our warehouse, justkind of sucks. So the plan for that right now is to just get enoughfor the holidays where if we sell out, it's better because we'rebootstrapped so we don't really care.

KevinUrrutia :

Imean, obviously it sucks if we sell out, but we just don't see it. Atleast for me, I don't see it getting any better so, but obviously,you know people are still going to buy gifts and products for theirfriends or family. So that's what we're doing there. And then anotherthing-

Brett:

Ithink you may find that there's a... And I think that approach makestotal sense. I'm wondering if by December people are going to besaying, "Okay, we're still not traveling now, but sometime in2021, we're going to travel and my husband, spouse, whoever, friendreally wants some cool luggage and this is the luggage for them."

KevinUrrutia :

Ihope so.

Brett:

SoI think that's going to help, but yes, still won't be normal.

KevinUrrutia :

Yeah.I mean, I hope that's it. Yeah, because then so for us too, we'regoing to be also making gift guide lining pages, where it's like getthis for her, get this for him. But yeah, those have always workedwell where it's... So that's another thing that we're working on too.So we're using them on bounce. So those work well, and then anotherthing too, that we're doing is we do a lot of influencer marketingtoo just in general.

KevinUrrutia :

Sowe're going to kick start that up again and yeah. And how we do it, Ithink I told you about how we do it is that obviously when people buyyour product, sometimes they just don't like it so they return it. Sowe have a lot of these returns in the warehouse. So instead ofthrowing it out because it's a nice luggage, we just tellinfluencers, "Hey, look, we're going to get you a slightly usedluggage," and we just clean it up a little bit and then send itto that one. That way we don't have to send them a new product and wedon't have to throw away a pretty good product that's just like maybethey just didn't like the color, right. So that's a way to utilizeyour resources. And that's how we do it here.

Brett:

Ilove that. And really for an influencer, especially if you sellreally nice quality luggage, if someone just got it and barely usedit or didn't use it at all, that still feels like a very new gift.And so yeah. Can you give just a couple, we'll kind of make this ourlast topic, a couple of tips or suggestions for influencer marketing?And I love that approach. Use your returns as gifts for influencers.What else? What other tips do you have for influencer marketing?

KevinUrrutia :

Othertips for that too, it's like because our luggage starts at 200, italready feels like an expensive product. So a lot of theseinfluencers just don't need money, where if you have a cheaperproduct that's like 20, 30 bucks, they're just like, "Oh, theproduct's worth nothing." So then they want more money. So forus, our leverage is that it costs money. So then we say, "Heylook, our product's 200 bucks already. You're going to get this $200product for free. I don't think we need to pay you." Add thatsort of works with them.

KevinUrrutia :

Sowe've gotten Kate Bach to get a luggage from us. And really peoplealways ask us like, "Oh, what's your strategy." I tellpeople like, "It's just like outreach. It's a numbers game. Youjust... There's no .." It's like we literally said, "Hey,do you want..." Literally the message is a sentence. Like, "Hey,let's get you traveling with Chester." And then that's it. Andit's like, "Okay, great. I love the luggage, but the thing too,here is you have to have a really good Instagram account, at leastyour account that the influencers see, because they don't want to bepromoting stuff that looks bad so for us, we curate that-

Brett:

Thatreflects poorly on them, right. They've got great Instagram game.They're not going to link to a company that's just ..

KevinUrrutia :

Andexactly for us on our Instagram, we just... If you look at it rightnow, it's just called Chester Travels, but we post the influencerscontent. We post really good travel. People traveling with theirluggages. Yeah, like I said before, they want to look good too. Sohaving a great Instagram account makes your outreach better. And it'sone of those things where it's like you can't measure it, but youthink it helps. And I think it does because it's like when you lookat it, it looks like, "Oh, wow, this is a really cool brand.It's a premium brand." And you've seen Instagram accountsyourself and you're like, "Oh, this looks bad."

Brett:

Right,right. And influencers are going to be hypersensitive to that. Theywant to promote something that looks cool. And I really loved whatyou said there. I think just like we kind of talked about this in thebeginning, where you're launching a new venture, a new product,certainly you want to be strategic about it. You want to think aboutit, but sometimes just doing it, just going for it, you're going tolearn. And I think the same can be said about influencer marketing. Ithink there's a lot of people listening to this podcast that aresaying, "Well, I've got to get all my ducks in a row and I'vegot to have this and that plan and all these things together forinfluencer marketing." And sometimes it's just like, "Well,why don't you just ask? Why don't you just reach out to somebody oneliner ask, but make it cool and interesting and give them a productand just do it." And sometimes that's all you got to do, right?What was the Woody Allen quote? That 90% of success is just showingup.

KevinUrrutia :

Thatreally is, yeah. I believe that in everything. People always ask melike, "How'd you do it?" I'm like, "I didn't knownothing about luggages." I researched it and I was like, "Letme go figure it out." I have no clue what these wheels are, whatthe sizes of it. We have to learn all this mechanics of what'sinternational travel luggage, what's domestic travel? It's like ifyou think about it sometimes, you just get overwhelmed and it'sanalysis paralysis. Let's just do it.

Brett:

Dothe next thing. Just go do the next thing. Yeah, yeah. I think a lotof people think, "Yeah, I can't start a luggage company becauseI'm not a 30 year veteran of the luggage industry or my family wasn'tin the luggage making business or whatever." And none of that istrue, right. None of that is true.

KevinUrrutia :

Nothing.No. I literally didn't even travel that much until I started doingChester.

Brett:

That'sawesome. Cool, man. Well, this has been a ton of fun and superenlightening. And so share with us, how can people connect with you?Because you're your marketing dude too. You got an agency, got thebusiness going. So one, how can people learn more about Chester? AndI do recommend you go there, look at some of their content, get ontheir lists, follow his company because they're doing a lot of thingswell. So talk about that first and then how can people connect withyou and the agency as well?

KevinUrrutia :

Yeah.So that's ChesterTravels.com or just Google Chester luggages. You'llfind us on YouTube and obviously Google. If you want to connect withme, you can email me, just kevin@voymedia.com or just voymedia.com.That's my agency. We do.

Brett:

V-O-Y,V-O-Y media.com. So Kevin@voymedia.com. Awesome. Kevin bringing the Agame, man. That was a lot of fun. Really appreciate you taking thetime and thanks for coming on.

KevinUrrutia :

Thankyou. I really had fun.

Brett:

Awesome.Absolutely. Well as always, thank you for tuning in. We'd love tohear from you. What topics would you like us to dive into on theshow? Also, hey, if you've been holding out, if you have not given usa review on iTunes, I recommend you do that, right. That's how otherpeople find the show. It would make my day as well if you left areview. You'll feel better about yourself if you do it as well. Soleave that review on iTunes and with that until next time. Thank youfor this.

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Episode 136

:

Chris Lynch - Everyday California

Line Extension and Licensing to Fuel Growth

When should you partner, license, go on your own, or scrap an idea?

In a word, Chris Lynch is cool. So is his brand Everyday California. It’s not a surprise then, that what started as an adventure tour company also became a super popular apparel line. But Chris and the Everyday Cali team didn’t stop there… The brand has now grown to include flip flops, beer, CBD and even a line of sunscreen. So what separates a solid business move into new products vs. an unhealthy distraction? When should you partner, license, go on your own, or scrap an idea? Here’s what we dive into on this episode:

When to lawyer up and why it’s sooo worth it
Be patient - speed in some instances almost guarantees that you land on your face.
One of the best questions to ask about adding a new product is “does it feel right?”
How Chris and team partnered with a brewery on a California IPA and a CBD company to make a CBD product all while strengthening their core brand offering.
Lessons learned from a few license deals
How and why Everyday Cali is launching a brand new sunscreen - if you’re considering a line extension, you’ll love Chris’ advice.

‍

Mentioned in this episode:

Jim Collins

Cherokee (Apex) Global Brands

GreenWave Charity

Sunday Scaries

‍

Chris Lynch - Co-Founder and CEO at Everyday California

Everyday California - Adventures & Apparel

‍

Episode Transcript

Brett:

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 return guest. He's one of the few. We have had a couple of return guest on the show, but this is definitely part of an elite club. This is elite status when you get asked back to the eCommerce Evolution podcast. We did also realize that it's been three years, three years, since we've had this guest on.

Brett:

I am excited to welcome to the show again, Mr. Chris Lynch, of Everyday California. Chris, what's up, man? How's it going?

Chris:

What's up, buddy? Good to hear you. Good to see you.

Brett:

Yeah, you as well.

Chris:

Stoked to be back. I didn't realize it'd been three years. It's pretty wild.

Brett:

I know. Time flies. But we've known each other a long time. Your client and a bro, so we run your Google Ads and stuff. And we hang out in San Diego on occasion, because I like to get out there as much as I can, even maybe once during COIVD. But anyway, excited to talk about a few things. I want to first get everybody caught up. I want people to hear the story of Everyday California. And quick shout-out, I am wearing... if you're-

Chris:

There it is.

Brett:

... watching the video, I am wearing an Everyday Cali shirt today in honor of this-

Chris:

Thanks.

Brett:

... interview. So I want everybody-

Chris:

I'm wearing a hat, thankfully. I probably should rep my own brand.

Brett:

You probably should, but that ..

Chris:

Well, it is. Yeah, it is. Yeah, ..

Brett:

It is Everyday California.

Chris:

Everyday Cal... Yeah, these are the new... We're doing all these new beach hats for up and down the coast, so different beaches and cities.

Brett:

So just the different beaches in San Diego, you're-

Chris:

Yeah.

Brett:

... creating a hat for?

Chris:

Pacific Beach. Ocean Beach. Mission Beach. All that good stuff. Just for fun. A little capsule collection.

Brett:

There's got to be a La Jolla Shores hat, I would assume.

Chris:

Yeah.

Brett:

Of the shores.

Chris:

Yep, yep, yep.

Brett:

Awesome. I want to get everybody caught up. I want people to hear the backstory of Everyday California. And then, what we're going to talk about is how you've successfully taken one business, which is your core business of adventure that we'll talk about in a minute, and you've used that to successfully launch other spin-offs, other related product offerings, even some license deals that are really interesting and I think informative. And so, if you would, just tell everybody how you got your start, what is Everyday California? Tell us the story.

Chris:

Yeah, for sure. So Everyday California, we're an ocean, adventure and lifestyle brand. So we do kayaking, paddleboarding, surfing, snorkeling. We do tours, lessons and rentals, and that's the genesis of our business. And then, we also do men's, women's and kids apparel and accessories, so pretty much everything from hats and tee shirts, which is how we started, to flip flops and water bottles and towels and we have a beer and we're working on a sunscreen. We have all different types of product offering, which is why we truly believe we are a lifestyle brand, because we do everything in the ocean and then we make products for all different types of lifestyle activities.

Brett:

Yeah. It's just a super fun brand. I will give a quick shout-out. San Diego's of my favorite spots. We try to go at least a few times a year. Even though we live in Missouri, we make it out there. La Jolla is next level, which is where you guys are located. La Jolla's the best. And so, I will say if you're out there, you have to do the kayak tours that Everyday California puts on. It's just a unique experience. There's no place like La Jolla. Also, if you want to pick up surfing, which I've really worked hard to try to learn surfing over last couple years. I surf I could label myself a really... I'm a good surfer for my area of the country.

Chris:

You've tried a couple lessons with us, right?

Brett:

Yeah, I did. .

Chris:

.. water surfing ..

Brett:

You guys did the... Then I'll quick plug, if you want to take surf lessons, the group at Everyday Cali, awesome. Really help you out. Patient, but good instructors as well. So you got to check that out. And what's also interesting is you hang out in the Everyday Cali shop, whether you're waiting for your surfboard or waiting for your kayak tour. People are actively shopping your apparel. This is not just a, "Hey, we called up a screen printer, and they threw our logo on some tee shirts. And now we're hocking them in the shop". You guys have really developed some fantastic products. It's a brand you can tell a lot of thought, a lot of care, when into that. And so-

Chris:

Yeah, we've got we got product developers working with us all the time. Yeah, you're right. That's the one thing, and I'm glad that you mentioned that, because a lot of people do think, "Oh, well, you're just the tourist spot and you're printing logos on blanks." But we're manufacturing in, not only U.S., but Mexico, China, Brazil, Vietnam and really creating products and not just printing on blanks.

Brett:

Yeah. Was that the goal from the beginning, when you started doing.... Because you started with kayak tours, right? That was the very first thing you did-

Chris:

Yeah.

Brett:

Did you always think there's going to be a lifestyle brand, apparel was going to be next, or did that come later?

Chris:

It was in the initial concept. That was really what we wanted to do was use the platform that we had to build a bigger brand and build that lifestyle around the ocean and around all the activities that we do. You and I talked, and to tell the story quickly, but when we started, it was myself and a business partner. We had some pickup trucks... or we had a pickup truck, some kayaks, a cell phone and an iPad, and we basically kept it in a storage unit, and we would wake up early in the morning and drive down to the beach and drop everything off. And while we're in the truck, I'd make calls and return calls to Groupon customers to get them to come out on the ocean with us. So what started-

Brett:

So you and your business partner, you guys were tour guides and everything. You were doing the whole thing?

Chris:

We were tour guides. We were washing wetsuits. We were moving boats. We were still going to the storage unit. We were up at 6:00 AM, moving those things and putting a rope around them and driving them down to the beach. And it was everything. No one was answering the phones when we were in the water. So you would do a two hour kayak tour, run out of the water, check the phones, all that. We quickly learned that we needed a couple employees, so we did we hire out a couple buddies right away. And it just evolved from there. We opened our first store, about 500 square foot shoe box. I wouldn't even call it a store. Our first little area to operate out of. Eight months, we were able to get a new spot.

Brett:

Is that where... Was the original shop, is that where that awesome taco place is now ?

Chris:

Yeah, that's where the taco place is now. Yeah, yeah.

Brett:

Okay. That place is tiny.

Chris:

Yeah, it was a shoebox for real. And that's where the genesis of the branch comes from, that's where that started. Once we had the little store, it was, "Okay. Now let's make those... Let's print on those blanks and sell something." Si we had a tee shirt and a hat. And once we sold out our first 24 hats, we were at 48 hats. And once we sold out of those 48, we made 100. And we started from there. And it was one product at a time... one hat, one tee shirt, one tank top, all that stuff. And then, that's when the brand really started to grow, and the company itself started to grow. As we continued to get more customers, as we continued to get busier and have more kayak tours, more paddleboard rentals, whatever it may be, we had to hire on more and more people. And now, sitting at today, we have about 80 employees, and we see about 75,000 customers a year that go out on the ocean with us.

Brett:

That's crazy, man. That's crazy.

Chris:

Yeah. Yeah.

Brett:

Yeah. And it's a well-oiled machine, man. The tours are fun. I've done four now, and I'm still not tired of it. But the check-in process is smooth. The way the employees treat you as you're out there... It's just awesome. So I want to talk a little bit about the apparel, and I love how you got started with just one tee shirt, one hat and did well there. Did you start with the... I'm wearing the El Classico. Is this what you started with?

Chris:

That is the original?. Yeah, that's the original print. We had it in the one color. We had it in a charcoal, like a heather charcoal tri-blend. That was my favorite, basically, my favorite blank. And that was the original design, the original flag design that everybody loves. It's still one of our top sellers today. I think... It's a legacy project I will always keep around. We're definitely... That went on everything at the beginning. We're definitely evolving the brand now. We have a lot more product offerings, a lot more designs. We're trying to get more technical with our gear. We actually just brought in one of the original founders of Blenders Eyewear the original designer-

Brett:

That's awesome.

Chris:

... and founder. Yeah, he sold his part of the company a couple years back and has been doing some outside design work and consulting and having a good time. And we were friends when he started Blenders, and I start Everyday California. So I don't know if everybody on this podcast knows who Blenders is, but they're a major eyewear brand now.

Brett:

Huge eyewear brand. What a great story. It's similar beginnings, right? Just real, real humble, a couple dudes...

Chris:

Very similar. Yeah.

Brett:

Invented an eyeglass company, and this thing exploded.

Chris:

Exploded. So him and I were roommates, and he actually was working for us, when they had started Blenders just prior to that, and helping out. And now, things have come full circle, and we've got him Now as our brand manager and our design lead. So we're really pushing and hoping to push the envelope of our designs and our capabilities now the team is growing a lot.

Brett:

That's awesome. I love that. And what's really interesting, hearing you tell the story reminds me of this principle that Jim Collins teaches... Jim Collins, the author of Good to Great and Built to Last and other amazing books. He talks about successful companies fire bullets first, and then cannon balls, to use a ship metaphor. Companies that tend to make big mistakes, maybe crippling mistakes, fire cannon balls first, and then, maybe they realize they're out of money or out of whatever. But it seems like you guys have done that, because this is where, "Hey, we believe we can make apparel work, so here's one shirt or here's one hat." And then, it sells out. It's successful. So now you begin to expand. So talk about, what does that process look like, as you had those initial successes with shirts, how do you decide where to go next? Is it just you guys are really creative and you're trying to design for stuff that you like, or are you asking people, doing research? What are you doing?

Chris:

No. I think you hit the nail on the head there. We continue to fire bullets. We really don't throw a lot of big crazy ideas out there. We can't afford to invest in crazy ideas, just because (A) we are seasonal business, so we really learned how to manage cash flow early on. When you start to grow as a kayak company and a surf company, and your whole business is adventure and tourism in the water, those customers go away in the winter time.

Brett:

Even though winter is still nice in San Diego, it slows down big time.

Chris:

Winter is still beautiful, but it definitely, you got 60% less, 70% less, people around and coming out of the water. So as we developed products over time, it was really a bullet here and a bullet there. And they were natural progressions. You make a tee shirt first. And then, after you make a tee shirt, you make a tank top. And then, once you figure that out, you make a sweatshirt, because you're heading into the winter, and you hope that some people will buy those sweatshirts. And this was also at the beginning of the eCommerce, I would say, revolution. Our first website was on WordPress. You couldn't even really sell a product on there. I don't think we dove into Shopify until maybe... I'd have to look, but maybe 2015, 2014, 2015, something like that. And that's when we started selling online a little bit. We were so focused on our own retail in store and our customers in store that we didn't really get that up and running. And again, it was a natural progression of, "Hey, let's master... Let's figure out what our best videos and our best material and our best ideas around that, before we you make a Lycra UPF shirt for the water," which is much more custom and much harder to make. So definitely one thing at a time.

Chris:

And when it comes to product development, again, we try and base it on what we're doing around the water. We don't try and expand outside of our capabilities too much. We know where we are. We know what we're good at. We're not trying to compete with O'Neill to make the best wetsuits. That's not our business. But we do have a really cool floating waterproof hat that we made that works really well for our guides and works awesome for our surf instructors, and it just fits the brand, fits the vibe. And to develop a floating waterproof hat is a hell of a lot easier than to develop a wetsuit for men and women in 10 different sizes in different thicknesses and all of that. We develop products that we know that we can hopefully hit home runs with without breaking the bank and without hiring on the 10 technical designers.

Brett:

Yeah. Yeah. And so, do you have a detailed process that you go through to evaluate what's it going to cost to actually do R&D for this product and then, manufacture it? And then, what does the demand that should look like for this product? Because you mentioned wetsuits, and it's always just people that live there that are probably going to buy wetsuits. Everybody else is going to rent them and what's not.

Chris:

Yep. Yeah.

Brett:

So what's your process there when you're looking at a new product? And if it's more just organic, kind of feeling it out, that's cool, too.

Chris:

Yeah, so it has been just organic, and it has been like, "Hey, we like that. Let's try and make that." And then, it goes over to Brody, who is our logistics manager and product developer. He works with all the manufacturers. If we have an idea, he can take that idea and shop it around and see how much it costs. And we can make a decision on how much time needs to be invested, how much money needs to be invested. We are, and this is part of the reason why we have hired Blake as our brand manager now, is to tighten that process up. I don't think we're going to be able to get... We're not gonna be able to get to the next step without more standard operating procedures in place. We've been able to... We've been lucky enough to be successful in the ways that we're doing things, but it's not the way we should be doing things. We develop products as we go along and as we think something's cool, we make it. We drop it.

Chris:

And we've had a lot of issues in the past with, it's February or it's March, and we want to make this cool new board short. And then, we get the designs and then we get the samples from China and those take six weeks. And then, they come back and say, "Okay, you got to order a thousand of these." And then, they need another three months to manufacture them. And then, they sit and go to customs, and then they're sitting in customs for a month. And the next thing you know, you got a thousand board shorts, and it's the end of August, and the summer's basically over. You're like, "Aw, man."

Chris:

So we're trying to get a lot better at that and change those processes. We still like throwing things at the wall. I can't tell you I don't throw things at the wall all the time that are just sitting in the back ..

Brett:

I think that's part of the creative process. That's part of the being an entrepreneur. You have to have that. I think most entrepreneurs just have that inside them. They have to be kicking out new ideas, and it's..

Chris:

You have to do it. Exactly. We're having this conversation in August now, and I know it sounds early, but we were looking at developing a flannel shirt that has a bottle opener in it, and it's a little bit thicker and potentially has a little bit of water wicking to it. And that product, we would like to drop in November... October, November. We're already behind the ball on that, and we've worked with the manufacturer, and we realize that, for the quantity that we want to do... because we have no idea how it's going to do, how well it's going to sell... it'd be a small capsule collection... that the cost per shirt would be something like $38, which if-

Brett:

That's a pretty expensive cost.

Chris:

... you're in the world of apparel, is very expensive on the cost side. But it might be something that we might try and make a hundred of them and see what happens. And hopefully, they come in, in November. But, again, this is why we're bringing... This is why I'm hiring more people and bringing in more people, because these processes and procedures need to be tightened up a lot more. I've learned, as being a CEO, that my time is so scattered and so all over the place that, as much as I would love to sit and develop every single new product and create that timeline and design and go back to when we first started I was on Photoshop and learning Photoshop on how to make things. Now, my time is spent between meeting with the accountant, and then meeting with the lawyers, and then meeting with the city officials and then meeting with our managers and our directors. And so in dialing all of that in and just becoming more of a thought leader and not being as hands-on.

Brett:

And you've done.... And just being able to observe you now for several years, you've done a great job that.

Chris:

I appreciate it.

Brett:

And it's interesting. And then, I'm the same way, just in a different world, the agency world, where it's very easy for me to just want to get into some of the details and craft campaigns and do some stuff that I've done for years and I'm good at, but really the highest and best use of your time as a CEO is often to get the best out of your people and to inspire them and equip them and train them and give them everything they need to do what they need to do, because you could very quickly become your own bottleneck and the thing that slows down your business and keeps that next great product from being introduced. And so, you've done a really good job of that.

Chris:

I appreciate it.

Brett:

So that's that's awesome. Now, I do have just a quick question, because this is fascinating to me. So flannel shirt with a bottle opener in it.

Chris:

Yeah. Yes. Yeah. ..

Brett:

You have a few other.... Do you know the guys at William Painter? William Painter Sunglasses?

Chris:

Yeah. Yeah, I know those guys. Yeah, they're right here in Pacific Beach, right with me.

Brett:

They are. Yeah, yeah, yeah.

Chris:

I'm wearing my Pacific Beach hat right here.

Brett:

Yes. So they're buddies of mine. They've got the hook on their sunglasses to pop open the bottles, which is cool. I bought a pair of flip flops a few years ago, not Everyday California brand, which was a mistake.

Chris:

It's Reef. Reef has that trademark.

Brett:

With the bottle opener on the-

Chris:

With the bottle opener, yeah. They originally did that with Mick Fanning 15 years ago or something like that. I don't know if the patent on it has expired, because it's a potential that other companies are doing it now. But it was Reef who originally-

Brett:

I think they are Reef flip flops. Although, after you wear flip flops and especially in a COVID world, that's the last place I want to put my beverage is right where, the underneath part of my foot. Anyway...

Chris:

I never used it. I never used it either.

Brett:

I've never used it either.

Chris:

That was my whole thing. I don't want to put my foot on the top of my beer, the bottom of my shoe.

Brett:

It also depends where I've been walking.

Chris:

But they've probably sold a hundred million of those things,

Brett:

Isn't that-

Chris:

You can't hate on it.

Brett:

It feels like a good idea before you start wearing them maybe. Where did that idea come from? So bottle opener on a flannel shirt. Was that just a crazy idea or was there an interesting story ?

Chris:

It came from the staff. It came from the staff. I believe it was Brody and Robin, who is our... Sorry, we have company. I'm working from home, because it's COVID.

Brett:

Hey, what's up?

Chris:

So I think this is getting pretty normal for everybody, right?

Brett:

Oh, absolutely. Yeah.

Chris:

You guys are on the eCommerce Influence podcast right now.

Brett:

That was like, "I can't believe I'm actually on this podcast, because heard of it."

Chris:

I believe that's what they say, "Yeah. Oh my, God, I can't believe I'm on this podcast."

Brett:

That's completely normal. I've had my kids interrupt doing crazy things and stuff. Yeah.

Chris:

Yeah. Yeah.

Brett:

Totally normal.

Chris:

Sorry. I lost my train of thought. What were we... We were talking about... Oh, the bottle opener.

Brett:

bottle opener ..

Chris:

So I believe it was Brody and Robin and Jana. They're on our brand team. So graphic designer, basically social media manager and photographer and then logistics and product development. So those guys have really stepped up. Again, it's a matter of me trying to get out of the way, and let everybody do their thing. Let them come up with ideas-

Brett:

Let those ideas come out of the team, man.

Chris:

... to develop products.

Brett:

They've got them.

Chris:

Yeah. Yeah. For sure. For sure.

Brett:

Awesome. Fantastic. And I would be much more likely to use the bottle opener that was attached to my shirt than I would the bottom of my shoe.

Chris:

Absolutely. Now let me ask you, would you want it on the pocket of the flannel or on the bottom of the flannel?

Brett:

Dude, I think... I would have to see it. I'd have to see it. I think I'm going to go bottom of the flannel though.

Chris:

Got you. All right.

Brett:

I think that's a little inconspicuous.

Chris:

A little more hidden.

Brett:

I think it's cool you open it down there versus up here. A little awkward to open-

Chris:

Yeah. Yeah. It's true. It's true.

Brett:

I've got long arms. And so yeah... Anyways, .

Chris:

These are things we talk about around the office... at home now.

Brett:

Fun stuff. Well, yeah, virtually now, I guess. Awesome. So let's talk a little bit about some of the partnerships, and so partnerships, licensing deals. I know there's some awesome things that can come from that. There are real horror stories and/or just meh stuff that can come out of that. Talk about your journey there, because I think that's an area that not a lot of people... that's the path that not a lot of people go down. And I think it all starts with the fact that you put so much time and attention and energy into creating this brand. This brand that's really cool. And this brand that other people want to be a part of. So if you just had a real cheesy brand, no one would want to do this with you. But talk about some of the licensing and partnership deals, the good, the bad and otherwise.

Chris:

Yeah, so we first got introduced to licensing back in 2015. We were approached by a company called Cherokee Global Brands. Now Cherokee Global Brands is a major licensee. They own the Cherokee brand, which was in Target for forever and has been around, I believe, since the '80s.

Chris:

They also own Tony Hawk. They own Liz Lange. They now own Hi-Tec. They own Magnum Boots. They own a lot of companies and a lot of licenses. So we first partnered with them in 2015, and that licensing deal was essentially for them to do our mass-market retail, so your Targets, your Kohl's, your potentially Walmart's or Ross or all of the big... JCPenney, a lot of companies, major retailers. And then, they were going to do that, as well as our international licensing. So when we first started, our first stores we were in were... Actually, Sears Canada was the first-

Chris:

.... licensing deal. Yeah. And currently, we only have one licensing deal through Cherokee... they're actually now known as Apex Brands... and that is in Mexico. I believe about 400 stores in Mexico. So it was an interesting learning experience. There are a lot of ups and downs with licensing. I might have done things differently. I was a little bit younger, and now, having a partner is great.

Brett:

One of the issues is you lose control, right, for that ..

Chris:

You do. You do lose some control. So they typically own a portion of our intellectual property that is licensed out to other companies around the globe, essentially. Now, they don't own all of our intellectual property. For example, right now, we are working on our sunscreen. Our sunscreen has been in development for about 18 months. Now we own that intellectual property for Everyday California, for bear, for our trade, our name, our word mark, and we can do with it what we please, without having to really ask anybody. However, creating a sunscreen is very difficult. We're not white labeling this stuff. We're not just going down and slapping our name on a random bottle of sunscreen and selling it out. We brought in a different licensing partner who basically is licensing out our name and helping us develop the product. It's a different type of contract where it's a shorter term it's not a forever in perpetuity deal. It's more of like a three-year deal, five-year deal with some revenue goals and kickers there. But we did that, because we have no experience with this. I've never developed a skincare product before, and we were very-

Brett:

Right. When you're going from apparel to something like skincare... more regulations, more complexity, just all kinds of stuff you wouldn't know.

Chris:

Yeah. Tons of things you wouldn't know. And also, we want it to be reef safe. We want it to be environmentally friendly. We wanted it to be every little sticker you see on a bottle... the non-GMO and vegan and cruelty free. We wanted all of that, because we're an ocean adventure company. Our brand stems from the ocean. Our employees are in the ocean every day. We wanted to make sure that this stuff was not hurting the environment. So we developed a formula with our licensing partner, with different labs, so actual scientist, which is crazy, to put sea kelp and algae into the-

Brett:

Super cool.

Chris:

Yeah. It's really, really cool, because we're part of 1% for the Planet, so we donate 1% of our revenue to charity. And the one that we work really closely with is called GreenWave, and they basically are kelp farmers, which is a whole other conversation we can talk about. But that's why we wanted kelp in there. And they brought in employees from Estee Lauder to help develop it. We used our internal design team to design packaging, alongside of another company that only designs packaging for CPG, so consumer product goods. I believe, yeah.

Brett:

Yeah, yeah. That's right. Consumer packaged goods, right?

Chris:

Sorry. Consumer packaged. I knew I was saying it wrong. Consumer packaged goods. So we brought in a designer to do that. And that's a totally different licensing deal than the other licensing deal with apparel. However, both of those, we have the ability to sell... We have the contracts, in all those contracts, that we are the sole online retailer. And it's great, because we made these deals, the original Cherokee deal so long ago, that online wasn't as big as it is now. And I said, "There's no way we're giving up anything online." So we didn't. And we have the same deal with our sunscreen or anything that we do, we control everything that's online. And basically, all the messaging for Everyday California comes out of my office and our team, which is really cool.

Chris:

Yeah. There's ups and downs about licensing. Those are just literally two examples of licensing. Another really cool license we've done is the Everyday California IPA, which is a beer. And we do that through Resident Brewing here in San Diego. Just another really fun thing to do. You license it out-

Brett:

Do you do that mainly for the fun factor or was it a little bit of business?

Chris:

100% for the fun factor. It's a little bit of business, but it's a marketing play. And it's a loosely... I would even say it's hard to say it's a license. It's like a loosely-based collaboration where there is a small licensing agreement in it, and it's cool marketing for us. It's fun for them.

Brett:

It's fun to put that beer-

Chris:

We changed our logo.

Brett:

... on your tee shirts. You got guys drinking the Everyday California... People drinking the Everyday California beer locally. It's super cool.

Chris:

Yeah. We're in 20-plus bars around here in San Diego and La Jolla. Sot it's just cool. You see our tap, and it's got the Everyday California bear, but instead of holding a surfboard, he's a holding basically a pint glass. So that's cool. So there's licensing opportunities that way. We are launching a... I'm very excited about this. Another one, just fun. I like to do this. We're doing a CBD license with-

Chris:

.... Sunday Scaries.

Brett:

Yep. Yep. Sunday Scaries-

Chris:

So Sunday-

Brett:

.... a fantastic brand. I've tried the product. It's really good.

Chris:

Amazing. Mike Sill and Beau over there, the team over there, we're friends. We're in the same entrepreneur organization together. And it just made sense. "Hey, we're Everyday California. They're Sunday Scaries." They have a gummy bear. We have a bear holding a surfboard. California and CBD and the marijuana industry and all that is just.... all goes hand in hand. So we said, "Let's do this collaboration." So September 1, we are dropping the Everyday Scaries Collection. So we got their custom gummies for us, custom packaging, all kinds of cool stuff. And then, we switched Brutus out, our bear, for a gummy bear. So now we've got a gummy bear holding a surfboard. And we created all these really cool graphics, and we're doing cool tee shirts and hats and it's just... Again that's another "licensing deal," but it's more of a collaboration.

Brett:

It's kind of a co-branding opportunity.

Chris:

It's a co-brand collaboration. We get introduced to their customer base. They get introduced to our customer base. And we just have fun with it. I ordered a hired a big inflatable gummy bear that we're going to have one of our guys go out and surf. And both of our brand teams are going to take photos and do real photo shoot.

Brett:

He's going to surf the bear or he's going to surf with the bear?

Chris:

He's going to surf the gummy bear. He's going to surf on the gummy bear. Yeah. Yeah.

Brett:

Okay. That's awesome. I think there's a lot of good things can come out of a licensing deal. Sure, they can fall through or maybe not live up the expectations or whatever, but you get to leverage expertise that you don't have and distribution networks that you don't have and just talent that you don't have. But then, also, you get to expand your line, and then you do something fun, like the gummies where your customers are probably, or a good percentage of them, would want to give a try to a CBD product and same with their customers wanting to buy something of yours as well. When do you... How do you evaluate a deal to understand, this is good for my brand or this is potentially just a distraction. Because, as entrepreneurs, we love ideas. We love deal making and things like that. How do you determine if something is good long term versus a distraction. And, obviously, you can't know everything before you start.

Chris:

I think at the beginning, when we first started the company, you say yes to everything. You're just excited that people accept you or like you. If somebody comes to you and they have a deal and they have an idea, you're like, "Yes. Yes."

Brett:

Let's do it.

Chris:

Yes. You say yes to everything. Now we've been through so many and we have just much more opportunities, if it doesn't.... I feel like you can just feel when it's right. We know when it's right. You know when it fits the brand. You know that Everyday California, IPA and beer just feels right. California was big into IPAs.

Brett:

IPAs are hot right now, especially with the younger generations and stuff.

Chris:

Yeah. And as soon as you start thinking about it, you're like, "Oh, imagine that what the apparel ideas we could do," or "Think about what the tap at the bar would look like." You just start to... You can just feel it, and you know when something's right. I think the most important thing is to make sure that, if you're going to do a licensing deal or collaboration, that you have the contracts down in an extremely favorable way. I think as long as you're comfortable with the contracts and with what the agreement is ahead of time, it's going to be whether it's successful to your wildest imagination and everyone's making money and that contract is solid or whether it's a huge flop and you can get out and forget about it, and no one really saw it. You need to have that in place so that you're just taken care of. You're just protected. It's not ..

Brett:

Yeah. Without that, you're asking for a complete nightmare and likely legal battles. I think sometimes entrepreneurs want to avoid some of the legal hassles, because we don't like to do that. It slows us down. We like to get deals done, but if you don't do the legal stuff up front, the legal stuff will come back to get you in the end, and it's not worth it.

Chris:

Yeah.

Brett:

Do you recommend then finding an attorney that specializes in IP issues and licensing deals and stuff like that or is that ?

Chris:

100%. 100%. Yeah, we have an amazing licensing attorney based out of New York, who has represented some of the biggest names in sports and entertainment, and amazing, firm, amazing guy. And that's just the work that he did five years ago, you don't understand it or realize it at the time. The contract are so big and you're negotiating 50 different deal points. And then, you look back five years now, and you're like, "Oh, that's why that's in there."

Brett:

Yeah. Yeah. So glad. So glad .

Chris:

That's why this clause is in there. That's what that is... You're so glad you do it right. These collaboration deals, you don't... Sunday Scaries, I'm good friends with the guys. It's a licensing deal, but it's a collaboration. We don't really have... It's not-

Brett:

And that's not like a big company.

Chris:

It's not a formal thing.

Brett:

It's a fun thing. It's like the beer.

Chris:

Exactly. Exactly. It's not a long-term thing. They're not going to be selling Everyday Scaries Gummy Bears forever. It's a one month thing. They're doing it. We're doing it. We're dropping it. It's going to be fun, and then it's over. They make their money on CBD. We make our money on apparel. Boom. We're done. That's not a bigger deal when you're talking about a sunscreen license or a licensing deal with Cherokee Global Brands or if you're working with major retailers that.

Brett:

Cool. So I love the way you described it there. That it just it feels right, and then, a lot about a brand is about perception and does this lineup and will somebody look at this and say, "Oh, yeah, of course, the Everyday California IPA?" And I really think people will do that with sunscreen. And I want to talk more about the sunscreen products just a little bit here. It's kind of our last topic. But I think people will look at sunscreen and say, "Of course. They're out on the water, and they're out there." And you have to have sunscreen, and most sunscreen is terrible. I remember that realization when I started learning that maybe... So obviously, we have been trained that skin cancer is bad, and it is. Then when you realize that if you use the wrong sunscreen, it may be doing as much damage or more than just without it. And so, it's like, "Okay. This is terrible." So why did you choose sunscreen? And let's talk through that, because that is a... you hinted about it and you talked about it a little bit before... That's a big departure from adventure and apparel and things like that.

Chris:

Mm. So you hit the nail on the head with yes, it just makes sense for us. It's another one of those when you have the aha moment, and you're like, "We're selling a ton of Sun Bum in store. They have a great brand. Why can't we do that?" There's no reason why we can't create our own sunscreen and figure this thing out. So that was one thing that it just made sense. Number two, looking at-

Brett:

It tied into your mission, too. So it ties into the brand. It ties into the mission, which is a nice little bonus.

Chris:

Exactly. It ties into all of it. And our thing is, make fun happen and create cool products and use business to improve the environment. So we'll improve the environment with this product, because it's not going to be terrible for the environment like every other sunscreen. We're trying to be as natural as possible and make this as environmentally friendly as possible. Create cool products. It's a dope product. We think it's a cool product. I think it smells great. You should have-

Brett:

It goes on easy.

Chris:

Yeah.

Brett:

You spray it on. It goes on easy.

Chris:

Yeah. You should have seen me at all the different perfume stores like smelling different sense as we're making this. And we finally decided on a scent that we're calling Malibu Beach.

Brett:

Malibu Beach. I like that.

Chris:

So it's a cool product. And then, make fun happen. So this is part of making fun happen. When you're out on the ocean with us, when you're in the water, when you're kayaking, you're paddleboarding, surfing, whatever it is, you're having fun, but you still need this product. So it fits in completely with our brand message. And then, also in order to scale, as I Look to grow into the future, as we grow the brand online, as we make more apparel, and as we see what's going on with e-commerce, in general, consumer packaged goods is one area that is just absolutely on fire. Consumer packaged goods seems like it's literally built for e-commerce.

Brett:

It is.

Chris:

And I had been looking around, thinking, "Okay. What can we do? What product can we do to scale this business to take us to the next level? How can we hit everybody in the U.S.?" Some people aren't going to wear an Everyday California tee shirt, because you know what? They are hardcore Texas or whatever it is, which is totally fine. They're not our customer base. I'm not worried about it. California's big enough for us. But in order to expand to grow to get that national reach, a consumer packaged good like sunscreen can be sold anywhere in the country. Hawaiian Tropic, does anybody not wear Hawaiian Tropic, because it says Hawaii on it?

Brett:

No, I live on the East Coast, I can't wear a Hawaiian Tropic.

Chris:

You can't wear Hawaiian Tropic. Yeah. So that works for us. And then, it's really about that scalability. We can create a product that you're going to use it once and if you like it, you're going to buy it. And you're going to continue to buy that product into future. You're going to use it as much as possible, and we're going to have you as a customer for life. We're going to have a higher lifetime value. We're going to potentially have options for subscription-based. We're going to be able to expand that product line, so not just a 30 SPF and 50 SPF spray, but that 30 lotion, a 50 lotion, and you get into 70. And then, you have a face sunscreen, and then you have a stick. And then, that's where we get into after sun care, which I'm hoping to call A California Tan in Your Hand.

Brett:

Nice.

Chris:

So if you can create an environmentally-friendly even, spray-on tan, whatever that may be, the product options are endless. The lifetime values are higher. The subscription opportunities are massive. That's going to be, I believe, our big winner when it comes to e-commerce. We've learned so much by selling apparel online, which is the hardest thing. You could probably speak to that.

Brett:

Yeah, we were talking about that. The apparel's so hard, because you got to always be reinventing things and you don't really... You guys are really good designers, and you guys have an eye for what school, but you don't really know, right? You may design some board shorts that you think are cool, but then people don't buy them. Apparel is so challenging, where you could have that same formula sunscreen and sell it forever. Maybe it just needs a packaging change, a few little things here and there, but sell it forever.

Chris:

Mm-hmm (affirmative). Mm-hmm (affirmative). And not only that. It's one size fits all. So even that shirt that you're working right there, the El Classico, which is our legacy design, I've got that tee shirt in six different colors for men, and through that, we have small, medium, large, extra large, double extra large. So I've got five sizes for each six colors. So think about how many SKUs that is for one-

Brett:

Inventory management challenge.

Chris:

Inventory management, dealing with manufacturing, everything. Logistically, the retail apparel and online apparel game is just... It's just hard. It's just hard.

Brett:

It is. It is so hard.

Chris:

And I couldn't be more excited to get into... Obviously, the brand is always going to be here, and that's why we're bringing in a bigger team and a better team to make us better. But I couldn't be more excited to create a really good consumer packaged product that seems to be.

Brett:

I love it, man. I love it. I'm really excited for it, excited to test it, excited to see it. I've seen some of the early materials and the video and stuff. It's an awesome story. I think it's going to do really, really well. So when can we expect... and I obviously won't hold you to it... When can we expect the sunscreen?

Chris:

Well, unfortunately, it was going to be this year. I don't know if everybody heard, but there's a global pandemic that-

Brett:

A what? A what?

Chris:

Yeah. So that has pushed our timeline. We'll be launching in Spring of 2021, which is okay. It's given us more time to nail everything down and just get better, get our marketing better, get our messaging better, get our products better, everything. We're stoked. Spring 2021 with the Everyday California sunscreen will be all over the place.

Brett:

Awesome. I love it. Let's wrap up with just some words of wisdom, pitfalls to avoid, things like that. And I guess the way we can frame this, so it would be, when do you think people go wrong when it comes to licensing deals or line extension? And any words of advice that you would give to the entrepreneur that's saying, "Man, I really want to extend my brand. I either want to get into a parallel or I want to get into this or that." What would you say to them?

Chris:

I would hold off as long as possible, to be honest with you. I would take the time. Look, I'll be 10... Everyday California will have its 10-year anniversary on November 1st, which is wild. I dove into a lot of things really quickly and made a lot of mistakes early on and fell flat on my face. It's taken me a long time to gain patience, I'd say that. Patience has been something I've needed to learn. And I think, if you're going to jump into something else, I would evaluate it more times than you can imagine and wait and let it sit. And then, if you are going to do something, like I said before, lawyer up. Get the best lawyers you can and make sure you're making the right deal for yourself. And if there is a deal on the table, know that they're always going to be... there'll be another deal.

Brett:

Yeah. Yeah.

Chris:

If it's... There will be another deal.

Brett:

I think that's huge. Be willing to walk away. Be willing to make that tough decision. Be willing to walk away. Be willing to delay something if that's going to be what's best. I think sometimes we get emotionally wrapped up into our decisions, and you have to check that at the door, be willing to walk away, be willing to postpone things. Be willing to make those tough decisions for sure.

Chris:

Yeah. It's funny, because you think that in... Just a quick side note, in business that I had to learn that patience as well, not just with licensing deals or collaborations or opportunities. But when we first started, I always thought that things could be done quicker. You have an idea. You need something done. You make a phone call. You send an email. We need this done now. Why is this taking a week to get done. Or it should take a week, it should take twice as long as you expect it to take. So that patience is really across the board, just learning that patience. Yes, you want to push everybody, but some things, speed just... There's not a lot of speed.

Brett:

Yeah. Yeah. And sometimes going a little bit slower up front is going to allow you to really accelerate on the backend. It's having the wisdom to discern that as well. So that's awesome. This has been a ton of fun. Love talking about your brand and your business. So if people want to just follow what you're doing, which I highly recommend. One of the best things you can do as entrepreneurs is watch other successful entrepreneurs. So where can people learn more about Everyday Cali, and can we get on a wait list or notification list about the sunscreen? How can we?

Chris:

Yeah, for sure. We're going to be dropping a lot of that stuff this fall. We'll be talking about the sunscreen. We'll be building up for it. So you can follow us @Everyday California on Instagram or Everyday California on Facebook and check us out at EverydayCalifornia.com. And if anybody ever has any questions or wants to reach out, I'm always available and my email's just Chris@EverydayCalifornia.com, so it's pretty easy to find me.

Brett:

Awesome. Chris Lynch, ladies and gentlemen, bringing it. Chris, really appreciate it, brother. Thanks for coming on-

Chris:

Thanks, Brett.

Chris:

Appreciate it, and we'll talk soon. Bye.

Brett:

Appreciate it. So, as always, we appreciate you tuning in. We'd love to hear from you, our listeners. What would you like to hear more of? Give us some show ideas. Give us some feedback. Also, if you feel so inclined, would love that five star review on iTunes. That helps other people discover the show. And with that, until next time, thank you for listening.

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Episode 135

:

Peter Awad - Mission Meats

Balancing Growth on Amazon & Your Own Store

Peter Awad is a long time eCommerce pro. Now he and his co-founder Nick have built a meat snack store with a mission.

Mission meats is just a few years old, but it’s gobbling up market share in the red-hot meat snack category. Peter Awad is a long time eCommerce pro. He started selling auto parts on eBay in 2000. Now he and his co-founder Nick have built a meat snack store with a mission. They’re using profits from eCommerce to help fight deforestation, educate children in Africa and support homeless women and children.

But they don’t just have big hearts, they have some serious marketing chops too.

In this episode, we explore the challenges and opportunities of marketing a product that could literally appeal to anyone. We also explore how to maintain the balancing act of growing your own store AND growing on Amazon.

How to treat Amazon from a merchandising perspective.
Prospecting for new customers - Is this and Amazon first or Shopify first strategy
How to increase repeat purchases in a fun way
How pride or ego can limit growth with any paid ad channel
Crazy CRO tests and the practice of asking “what if the opposite were true?”
Important mindset issues that help fuel successful entrepreneurs

‍

Mentioned in this episode:

Andrew Youderian

Perspectives

I Pour Life

Mission Meats: Amazon

The Legend Planner

“How Tim Ferriss Uses ’The Five Minute Journal’"

The Five Minute Journal

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Peter Awad - Co-Founder and CMO at Mission Meats

Mission Meats - Mission Meats Grass Fed Beef Snack - Sticks that Give Back

Live Your Mission Podcast

Via YouTube

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Episode Transcript

Brett Curry:

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 treat for you. We're going to dig into a merchant story. You're going to hear the background of a very successful, very fun online store. And we're going to tackle a lot of stuff. We're going to talk a little bit about strategy and we're going to get tactical. And we may even talk about mindset and some of the things that trip us up as entrepreneurs so it's going to be a lot of fun. I'm super excited about it.

Brett Curry:

I have with me today, the co-founder and CMO of Mission Meats. He's also the host of the Live Your Mission Podcast, Mr. Peter Awad. Peter, how's it going, man? Welcome to the show and thanks for coming on.

Peter Awad:

Doing great, man. That was quite an intro. I appreciate that.

Brett Curry:

Yeah. Thanks. So quick interesting story. Peter and I met through a mutual friend, Andrew Youderian. Shout out to our good buddy there, what's up, man? So you and I were on a virtual call talking about Google ads and talking about your business. And then you were like, "Hey, I live in Dana Point. And I was like, "Whoa, weird." And I live in Missouri, I think a lot of people know this, I live in Missouri. And I said, "Well, I'm going to be in Dana Point three days from now." So we ended up having lunch in person, which was crazy.

Peter Awad:

Yeah. It was crazy.

Brett Curry:

So that was a ton of fun, but lots of cool stuff to talk about. Let's do this first. Explain to everybody, what is Mission Meats? What do you guys offer? What's unique about it and then we'd love to rewind the clock a little bit and hear the origin story as well.

Peter Awad:

Yeah, in a nutshell, we're super clean meat snacks, serving people that just need something portable. That's high protein, low carb, keto, all those buzz words. So meat stakes, bars, jerky that whole line. So if you're familiar with-

Brett Curry:

Which has become a trend. And I think I told you and I know a bunch of brands, because it's before I met you. But my wife and I went on a hike in the Grand Canyon. And super dry, dry of electrolytes so we ate meat snacks and coconut water. And that was the perfect combination. We felt like a million bucks. So meat snacks, I'm a huge fan and it's a big trend.

Peter Awad:

Yes, totally, man. When we started the business, I've always loved jerky. I've always loved meat snacks, but grew up on Slim Jims, which was just not necessarily clean.

Brett Curry:

If you're a professional wrestler, that's good for you. Who's their spokesperson, do you remember?

Peter Awad:

Macho Man Randy Savage.

Brett Curry:

Those are great. That's brilliant marketing, but yeah. When it comes to clean meat snacks, I don't think that probably qualifies.

Peter Awad:

No, I won't dog them here, but yes, they're totally conventional, artificial color, nitrates, all that stuff.

Brett Curry:

Yeah. So how does one get into the meat snack business? How did this all begin?

Peter Awad:

All good stories start with an accident. It was just by accident. I never thought I'd be in the food business, CPG, all that stuff. But I'm an old eCommerce guy, I've been in eCommerce since 2000, selling auto parts. And then from there-

Brett Curry:

That is real OG. 2000, that's old school, for sure.

Peter Awad:

The category I was in when I was first listed on eBay, I think we were like one of four listings or something like that.

Brett Curry:

And eBay was top dog back then too.

Peter Awad:

It totally was. And that was also another accident for... We can tell that story another day, but did that. Started a SaaS company, which was a huge failure. We did all kinds of stuff. But anyways, about six years ago, I knew I wanted to have a business that was started from the beginning that had a mission component. And it didn't need to be like the marketing focus, but we knew we wanted it baked in. But I didn't know what I was going to do with that idea. So I just put it in my back pocket. Fast forward several months, a friend of mine that was also in CPG, also in meat snacks. He was exiting and I had worked with him a little bit on it and I had some insight into the business and I also just loved that sort of product. So he was like, "Man, you'd be really good at this. It's something you should think about." But I didn't know anything about it. I don't know anything about animals and agriculture. I'm a Florida boy living in Ohio.

Brett Curry:

It seems really complex too. Just thinking about, it seems daunting.

Peter Awad:

It is. I don't know how to source these materials and where to get them produced. I didn't know anything. But I also happened to have a friend of mine that's an aggie, who's now my co-founder. Who had all the experience I didn't have and I have all the experience he didn't have. So we were just perfect compliments, like match made in heaven, I always say. So talking with him, it turned out just fast forward a few months that we both wanted to start the same business. We both had similar ideas for the name. We both wanted to have a mission component baked in. We also, oddly enough had same ideas for a logo, like almost identical. We had both hand-sketched separately. It's crazy. So him and I started chatting and the rest is history. We order our first pallet and we hit the ground running.

Brett Curry:

That's so cool. I personally love partnerships. I think they can be fantastic. They can also be a nightmare. We hear lots of nightmare partnership stories. But I think if you have the right partner and you guys are really complimentary, like you guys talked about and all those other things, that can be great. Quick, funny story, I don't think, I've mentioned this on the podcast. Three years before we started OMG, my business partner, Chris Brewer and... I'd done some projects for Chris and we'd done a few things together. And I started telling my wife like, "Hey, I don't think I ever want a business partner. But if I did, Chris Brewer, I could partner with that guy, trust that guy." Anyway, either way we ended up being business partners and it's all been really good. So let's talk a little bit about the mission component. So you and your co-founder, you wanted a mission component. How is that baked into the company? Why is that important to you guys? Just talk about what that looks like a little bit.

Peter Awad:

Yeah. So we committed in the beginning at minimum 10% of profits. We were going to go to organizations that were doing amazing things in the world. So in the beginning, I had a friend of mine that had taken 1,000s of people to Africa. She's a missionary, running an organization, amazing person, her name's Jodi. And I called her up and said, "Hey, I'm going to start this food business. I want to support food-related organizations, relief-related organizations. What do you think?" And she said, "I hate it." I said, "Okay."

Brett Curry:

Not the response you were expecting.

Peter Awad:

I'm like, "All right, tell me more." And she's like, "I think that you're a founder and you should support organizations that are giving people the opportunity to lift themselves up instead of just going in and supporting a food program." She said, "Food programs are great. And I think you should support organizations that are more entrepreneurial." So our first mission organization's called Educate throughout Uganda. And they take kids in high school, in college and they put them through an entrepreneurship program, essentially. Where in the end they'll have a business to support themselves or maybe even support a few employees and support their community in that way. And since then, we partnered with perspectives in Minneapolis, women and children's home, helping people get off the streets. But also they're very, very strict. They help you eventually support yourself. And they're like, "Hey, you're not going to live here forever. You are going to figure out how to support yourself and you're going to leave this place one day. You're not staying here forever. This is not a career for you." So that's how it's been baked in from the beginning. And we've got a multitude more that we support.

Brett Curry:

It's so cool. I love it. And we personally invested in mission work and as a company we have as well. And it was so interesting. It's been a number of years now. Not exactly the same story, but I remember talking to a guy who ran an orphanage in Haiti. And this was around the time when they had big earthquakes. And I said, "Well, all this relief, it's got to be really good." And he's like, "No, man, it's priced us back 100 years." And I think that may be an exaggeration, but he said, "You know what? What can happen is sometimes you get all this relief that just squashes the local economy. And now they're no longer self-sustaining. So what you think is charity and compassion, you're actually crippling.

Brett Curry:

So it's not that you don't help, you just help strategically and you help with micro loans and you help entrepreneurs and you help feed sustainability in those communities. That creates lasting change." That was like this huge aha moment to me, like we can't just throw money at a problem or throw food to a part of the world. You got to be strategic to really create a lasting impact. So that's fantastic. It does seem like this mission component, like meat snacks has become popular, where you got Toms giving away shoes. And all these other companies. It's also become kind of a marketing play as well. It seems like that was more of a passion and a calling for you guys rather than just a marketing ploy.

Peter Awad:

No doubt. Nick spent three years in Haiti. Melissa, my wife and I, we've gone on a couple mission trips and even perspectives in Minneapolis. We've taken the kids there and they packed backpacks with us for their Summer Backpack Program. It's just one of those things that we do. It's baked into who we are and we wanted it to be part of the company that we are building. And this is also why really it's not at the forefront of our marketing. It's there and if you like that, cool, we win, this is what we've got. But if you're just here for clean meat snacks, we're going to win too. So we didn't want it to be like, "Hey, come support our mission. And by the way, we've got these meat snacks." It couldn't be that way. And that came from the advice of other friends as well and you can do that. And maybe most people might not even care about it, but it's who we are and we're going to bake it into the company that we're building.

Brett Curry:

That's fantastic. I love it so much. We've really spent a lot of time investing and there's an organization called I Pour Life that we're a huge fan of. They help develop at-risk younger adults build life skills and help them get jobs, stuff like that. And they also help widows in Kore, Africa start their own businesses. So we're helping with that. Just really cool sustainable stuff. Well, let's shift gears a little bit. Let's talk strategy. So I want to hear your thoughts. It's always so fascinating to talk to merchants and figure out how you view different key topics in eCommerce.

Brett Curry:

And then after we talk strategy a little bit, we're getting into some tactics as well. So I first want to hear your philosophy on Amazon. I know you guys do a lot of volume on Amazon. How do you view Amazon? Are you full assortment on your website? Full assortment on Amazon? Are you full speed ahead with growth on Amazon? Or do you view Amazon more as a necessary evil and you need to be there to capture that demand? What's your overall strategy with Amazon and your own website?

Peter Awad:

It's definitely changed over time as all good strategies should. One thing, we believe in it. And if you heard me talk in a podcast two years ago, I'll probably say something completely different now, and it should be that way.

Brett Curry:

That's a sign of a good entrepreneur though, right? We all have sometimes this tendency to consistently hold onto something, but when the data changes, our opinion should change. And that's so it should be.

Peter Awad:

Absolutely and with all the stuff with Corona, it's like, "Hey man," I remember joking. I think I even said this to you. It's like all the things that were conventional wisdom, they're not anymore. It's like you got to test everything now because the stuff that didn't work before that absolutely you would've said would never have worked, well it's working now. The things that we offer now, I would never have thought would work before. And now we're like, "Well, let's just try it. Let's see what happens."

Peter Awad:

And it works, sometimes it doesn't. For Amazon, I think it's a necessary evil. I think there's so much traffic there. I think that people's eyeballs are there, that you should absolutely be there. A lot of people are going to disagree with me on that. I think at least for our category, you need to be there. It's definitely a great customer acquisition channel for us. As far as our assortment, the thing that has changed for me is that I felt like you shouldn't put everything everywhere.

Peter Awad:

So we have everything on the Amazon. We've got everything on the website and if you want to shop directly from us, cool. If you want to go directly to Amazon, because that's where you shop for everything, great. And where I've changed, and especially throughout this year and as Amazon's fulfillment service has been up and down. Right now, as we're talking, delivery's terrible, inbound shipping is just awful. I don't know what's going on over there, but it's terrible. So as that has changed, we've realized like, "Man, we can offer a much better service level on the website."

Peter Awad:

And then we also are much more nimble. So we can merchandise in ways that Amazon won't let you merchandise. You can't get eyeballs in front of people or get in front of eyeballs. So we offer bundles and packages and limited edition products in the website that we're just never going to offer on Amazon or we're not planning on doing. So that's been our opinion. I know there's plenty of brands that have decided that there's not going to be on Amazon at all and that's fine. I feel like at least for our category, that's a huge mistake.

Brett Curry:

Yeah. I fully agree. I do think a case can be made that, "Hey, we want to build our own website and build our own customer base first. And then we'll also offer our products on Amazon." Or, "Hey, there may be some brands that can do really well apart from Amazon altogether." But when you consider that if the percent-ish of eCommerce, maybe it's a little more, maybe a little less is on Amazon. I know a lot of people, as you look at the older demographic, my parents, my in-laws, as they start to shop online more. A lot of times they're just shopping on Amazon, that's it. You have to consider it. But I actually like the approach that you guys have where you're looking at, "Hey, so we've got these limited edition products, these special bundles, these unique things we're doing on our site."

Brett Curry:

And one thing we noticed and the spotlight was shined on this during the lockdowns is when ship times are delayed on Amazon or some of that messaging changes. People will go to Google, then search for your brand there. We saw this huge spike with several of our clients, some in the supplement space and some in the educational space and a few others. But whenever the lockdowns got real nasty and Amazon was delaying shipments, we started to see a spike of brand name two-day shipping, people searching for that on Google. So you've got to diversify. But even some good friends of mine, they were always like, "Nah, we're just going to keep waiting on Amazon." They're going on Amazon now. And I think it's more about just being smart and having control. So any advice you would give, how do you protect your brand on Amazon? How do you avoid some of the negative side of Amazon, whether that's knockoffs or fear that Amazon's going to steal your business? How do you capitalize on the traffic and try to mitigate some of the downsides of being on Amazon?

Peter Awad:

Yeah. So being an old automotive guy, I understand all the knockoffs. And I also understand if you are a reseller, you're just one of many, and it's really hard to get the buy box. And you're just like a race to the bottom, all these problems. But as a brand, especially in the food space, it's like, there's not necessarily a knock... You can't knock our stuff off.

Brett Curry:

It's not so easy to go knock off a beef stick, right?

Peter Awad:

You can have your own and that's fine, but you're not going to necessarily knock ours off. But we do not let any of our resellers, any of the people that we wholesale to sell on there. We're not going to compete with you in that space. I don't want to deal with, maybe someone's shipping some product in that's commingled with ours that is going to expire. We still don't want to deal with any of that hassle. So we definitely don't let anybody else sell on our listings. So we don't deal with any of that stuff either. And of course, you want to be brand registered and have that little bit additional, extra protection, although that's also proving not totally foolproof. It's still a must, but there's plenty of times where, like we're dealing with an issue right now where they're like, "Oh, well, you can't really change it." And it's something in our listing. It's like, "Well, it's ours and we're registered and I don't understand your response."

Brett Curry:

Yeah. Amazon and so whatever.

Peter Awad:

So whatever. Yeah.

Brett Curry:

Cool. So are you guys primarily FBA, Fulfilled by Amazon, are you Fulfilled by Merchant? Are you doing any vendor stuff, any 1P stuff?

Peter Awad:

We're not doing any 1P for the same reason, as far as if you want to have some control, we're not selling to Amazon and they're going to... So we're not doing any that. And we're mostly FBA, because of what we sell, we've got multiple pack sizes and everything. So it's like almost impossible to stock everything. So the fast movers, of course, they're in FBA and otherwise we're doing Fulfilled by Merchant on the rest of the product.

Brett Curry:

Cool. So you're the CMO, you're a marketing guy, you've been doing this since 2000, which is amazing. As you guys are pushing for new customer acquisition, you're reaching cold audiences, you're reaching new customers. Are you primarily pushing them to your site? And then just with the idea of, okay, but then if someone sees that, they go to the sign and they just want to see if it's on Amazon, will capture them there, if they go there? Or are you also aggressively growing on the Amazon platform? What's your philosophy on new customer acquisition?

Peter Awad:

We're only driving to the website right now. So for paid, we're driving everything to the website. Now there's new attribution options with Amazon where you can measure. So that might change your opinion moving forward. Up until now, it's always been like, okay, well, we're going to bleed some of these people to Amazon. But that's okay, we're creating brand awareness. And then our branded search is going to go up. And our branded traffic's going to go up on Amazon. Let's see if we could still make the RoAS work. But at the same time, it's like we're creating a... As we're trying to improve, our way to capture and keep people on that website versus bleeding over to Amazon. So whether that's free two-day shipping or free one-day shipping, which is stuff that we're working on right now, actually to 95% of the country or customer service or live chat, or points or rewards programs. Whatever it is, subscribe and save to keep people there. We're focused on that.

Brett Curry:

I love that. And I think if you can speed up that delivery time, if you get someone to order once, the repeat orders, and then you guys are Shopify, correct?

Peter Awad:

Mm-hmm. (affirmative)

Brett Curry:

I've had several merchants now that I've got everything saved on Shopify. I like the shop app, it's kind of handy so getting those repeat orders is really quite simple, quite easy. So I want to talk about a few things related to what you just said. So the Amazon attribution piece and that's something our Amazon department's working with that a lot. In a lot of cases, take Google ads as an example, we run most Google ads obviously to the.com right to our clients' sites. But we also look at, Hey, what if someone's searching for our brand and then Amazon, or maybe a competitor and then Amazon. So then where someone's identifying themselves as an Amazon buyer. Then we want to maybe run a Google ad, but send it to the Amazon listing or the Amazon storefront or whatever. Is that what you're talking about, using Amazon Attribution to help track that through?

Peter Awad:

And we have not done that yet, but I love that. Because you're not going to change their mind. It's like similar to conquesting. You know conquesting is like, "The RoAS is going to be lower," because you're trying to change people's mind like, "Oh, they're looking for that brand. Let me get my brand in front of them." Trying to steer somebody away that's an avid Amazon user, the person that's got multiple packages showing up every day, this guy over here, probably you. It's hard to change that because you just know what to expect. You touched on earlier Brett it's like that tide did shift a little bit and it's a little wonky right now with not knowing like, "Oh, is my package going to show up today? Or am I going to go to Amazon and it shows like five additional day lead time?" So the tide has shifted a little bit and I think it's created an opportunity for us to get out of our seat and fix some things that maybe you weren't focused on. Because you felt like you were going to bleed those folks to Amazon. The tide has definitely shifted back a little bit.

Brett Curry:

It has. And it's been one of those... Obviously Amazon is a huge beneficiary of this shift to increased online consumption. But because so much traffic went there, smaller merchants really benefited as well. And I think again, once someone makes that initial order and they see how easy it is and then they're likely to reorder. And to your point about multiple Amazon packages. I asked my wife the other day, Brittany, I said, "How many days out of the week do you think we get an Amazon package?" And she's like, "The most." So I think that may be an.. But it happens. So that's where I think with that strategy we were talking about before, where someone identifies themselves as, I'm an Amazon shopper. You're probably not going to change their mind. You could try. Or you could also not fight that uphill battle and just say, "Well, great then I'm going to capture you on Amazon and go that route." So let's talk a little bit about some of your acquisition strategies. What have you found to be most powerful? What traffic strategies work for meat snack business?

Peter Awad:

Yeah. So here's what's tough about us. I'm going to give you one of the worst answers ever in marketing. I think you may have even asked me this when we met Brett, it's like, "Who eats this stuff?" I'm like, "Everybody."

Brett Curry:

On the surface they like, "Oh, that's easy." No, it's actually harder that way.

Peter Awad:

It's terrible. So I was like, "Oh, I got busy moms. I've got busy executives. I've got people at Lyft. I have people that hike. I've got people that rock climb." You name it, we cover it. We sold a ton of preppers during coronavirus spikes as far as the quarantine stuff. So it's all over the board. So I don't know if I'd point at one thing, but I think that for us, what's worked really, really well is targeting affinity groups. And really finding out who in these affinity groups are actually spending, that are looking for the products that we offer. And just churning through them. So we may be focused on camping one week and hiking the next and just churning through all these different affinity groups and finding out what it is that's working for them. And then on top of that, what's been interesting is bundling packages that are also appealing to those affinity groups. So we actually target people that like spicy products and we're putting together spicy bundles.

Brett Curry:

You got me there, buddy. You got me intrigued now. I am a spicy food fan for sure and I love hot sauce.

Peter Awad:

We've got a Carolina Reaper jerky, I can send you.

Brett Curry:

Is that a Reaper jerky, you said?

Peter Awad:

Mm-hmm. (affirmative).

Brett Curry:

Yeah, dude, I'm all over that. I'll repay you somehow. That's amazing. So what's really interesting there, some companies may say, "Okay, hey, where are the..." She and I were just talking about this before we hit record. I was talking about David Ogilvy, one of the fathers of modern advertising. And back in the 60s, I believe maybe 50s, he got the Dove soap account and Dove soap was just focusing on cleanliness and anti-bacteria and all that stuff. And he said, "No, I don't think that's our market. I think we need to make this the luxury bar and as an escape from your problems." And I'm actually butchering, because I don't remember the exact tagline now. But all the pictures were a woman in a bath using Dove. And this was the relaxing luxury bar or whatever.

Brett Curry:

So you could look at a product and say, "Hey, we're just going to focus all of our branding at this one niche, this one category." Or you could say, "Well, no, that doesn't make sense long-term because the same meat spec could appeal to a busy mom or cross-fitter. So in that case, we'll just speak to them, but speak to them, not with one blanket message. But with a tailored message to them." And that's easy now or easier with Facebook and YouTube targeting, things like that. So I like that approach a lot. So tackling that problem of, "Hey, it's hard to be everything to everybody. So don't do that." Get a tailored message to those individual audiences.

Peter Awad:

Yeah. Because what are you looking for, man? You're looking for conversion, but you need click-through first. And the way that you're going to increase click-through is by being relevant to that audience that you're serving to. So just like working backwards from the goal of open your wallet please and buy my stuff too. How can I get you to even click through to what I'm serving up?

Brett Curry:

Excellent. Any interesting takeaways? I know you guys have done well on Facebook and stuff. Any interesting ad approaches or unique offers or anything that's been interesting of late?

Peter Awad:

I don't have something super interesting, but I do find something fascinating. A lot of times it's the creative that you thought would be the worst, sometimes it turns out to be the best. So Janell, who's my counterpart, who helps me with a lot of the stuff, she's really probably the brains behind this and not me. We were going through some of the creative and some of the data. And she's like, "Look at the photo that's winning right now." And it was like the ugliest, it was like .. sticks in a wooden bowl. I hate the photo. I can't even look at it now. I hate it.

Peter Awad:

But out of the 10 that we were serving up, that one, for some reason, I still don't even understand it, Brett. Why is that interesting to you? Why does that get you to stop scrolling? Why are you clicking through on that ugly photo? Maybe you can relate to it. Maybe you're like, "Oh, I got an empty bowl with no snacks on my counter. And I would like for it to be full like that one." I'm not sure. So to me, and we all know this already. It's like you can go in with an educated guess at what's going to work. But you really got to throw in some outliers there to say, "Okay, well I hate this photo. Maybe there's something about it that's going to resonate." And try them because you really just don't know.

Brett Curry:

I love it. I think it's the difference being right and getting it right. Sometimes as entrepreneurs we want to be right. So we want to say, "Oh, this is the image that I think is going to be best. So we want to just push that and only run that." Versus, "This is what I think is going to be right. But I'm also going to test these other things. And at the end of the day, I want to let the data speak." And I'm going, "Whatever image, whatever ad is working, that's what I'm going to go with." And yeah, man, it happens. We just had an automotive client recently where we retooled a couple of their ads and some of the ones we retooled really worked well. But there's this one variation that I was like, "I don't really like that," because there's this one part where this regular, like a really bad actor. And we were all just cringing at it, but we were like, "Ah, we'll run it." And it was the winner. So we were like, "Okay, it's painful for me, but I don't care." I want the CPA. I want to be able to scale this thing.

Peter Awad:

And a story about that just really, really quick. I don't want to glaze over it. This to me is the difference between the folks that get it and the folks that don't. And what I mean by that is like, you've got to leave ego. You can't have it. So Nick and I talk about all the time, like, I don't really care-

Brett Curry:

And Nick's your co-founder, right?

Peter Awad:

My co-founder. I don't really care if I'm right and I don't care if he's right. I want what's right for the company. And I want what the customer is actually going to show us and vote with their wallets and show us like, this is what we want. Whether it's a product or service or ad group, whatever. So to me, I think early on, you got to remember, this is not about you winning. This is not about being right. This is not about your ego. Forget that. Leave that at the door. We just think what's best for the company. And when you can do that, then you can think more creatively, I think.

Brett Curry:

100%. I love it. It's so interesting actually, that quote of being right versus getting it right. I actually heard that applied to Steve Jobs. And a lot of people think Steve Jobs, huge ego, really pushed for things. And those assessments are probably true. But I heard someone say he always got it right. And he was very opinionated. He would push and push and push for his opinion. But if the evidence was stacked up that showed that he was wrong, or if he would sometimes just push his employees just to see if they would push back. And if they pushed back hard enough and it made sense to him, he'd be like, "Okay, fine. We'll, go that route." And in the end, he usually got it right. So, yeah, it's just super, super important. Let's talk about a couple things. So you mentioned bundles, you mentioned getting someone to buy again on your site. Anything interesting or any tips for getting more repeat purchases? And you still have consumable, it's very tasty. So that helps for sure.

Peter Awad:

Yeah. And that was to me, a real big appeal in starting the company it's like, you can build that relationship over time. Which to me is really exciting. I like talking as you can see. I like talking to people. I like developing that relationship. So instead of it being a one-off purchase, it's like to me really, really fun. So we offer subscriptions on the site. We offer a 10% discount. If you get on the subscription, we promote pretty heavily. And then if you're on our email list and typically we're marketing to repeat purchasers. We will release a new product or a limited edition product, or offer a sale to people that we consider super fans first. So if you hit a certain threshold that we've set in Klaviyo, then you're going to get this promotion or deal before anybody else. So we try to do that. We're encouraging-

Brett Curry:

And you're letting them know that as well. You're letting them know, "Hey, you're the only one that has access or you're part of a select group that has access to this new offer."

Peter Awad:

We do. The cynical side of me is if I got that email, I'd be like, "Yeah, whatever. You send this to 10,000 people and so I'm not that special," but we do do that. They know to hit it and then we also have a rewards program. So very quickly you can get a 20% discount, which is heavy for us. We don't usually discount that far. So just to encourage that repeat purchase rate.

Brett Curry:

How does your rewards program work? Because I've seen some companies that really do that well. In fact, I got an email from a supplement company where I'd made a bunch of orders for a while. And then I've tapered off one, because I still have a lot of product left. But I got this email saying, "Hey, you have X number of reward points." And, "Hey, that's enough to get one of these things free." And I'm like, "Well, maybe I should go check it out and get that thing." How do you guys run your rewards program?

Peter Awad:

Yeah. So it's a point system, which they all are. And then at certain thresholds you'll get a discount. So you can use your points and redeem them for a dollar amount at any time. Or you can save them up and get a 20% discount coupon. Or you can save them up and get a free sampler pack. Those are the way that they work. And then we have them tied into the reviews and stuff. You leave us a review, you'll get additional points. If you follow us, you'll get additional points. All those things to increase engagement and try to just build the greater ecosystem.

Brett Curry:

Yeah. And how do you promote the rewards program? Is that something you talk about right out of the gate? Or does that come after purchase number two? How does that look?

Peter Awad:

So on the thank you page, I believe because it's just changing all the time, as you know.

Brett Curry:

Hopefully you're split testing, all that.

Peter Awad:

Right. So on the thank you page, we encourage them to create a rewards account. So they can essentially get the points for the purchase they just made. So we feel like that's the best way to onboard them. It's like, "Hey, you just made a purchase. Don't you want the points and you can sign up here." And that's just a couple of clicks and they've got that account. And then we're promoting that with, the rewards program we use is called Smile. So Smile's got a widget. So all the emails we send out have a section that's dynamic, that'll show if you're not a rewards member, it'll say, "Hey, don't you know we have this?" And if you are, it'll actually show your points balance on there and that you can redeem them. So that's what we're doing.

Brett Curry:

Very cool. What are you doing to incentivize? I know you're doing the 10% discount. What are you doing to incentivize subscription? Any interesting things you're doing on page and, or email followups, maybe after someone makes one or two purchases, how are you pushing subscription to them?

Peter Awad:

Yeah, we're promoting them on a regular basis, just because on our editorial calendar, we have them scheduled to send out to market those. Sometimes as another snippet on like a promotion that we're running, we'll say, "Don't you know you can save an additional." So if we're running up 10% sale on product, like all the spicy, we just ran a sale on all spicy. And we'll say, "You can save an additional 10% if you subscribe." So that's what we're doing. It's nothing super fancy.

Brett Curry:

But that's great. So the save an additional 10% if you subscribe, you're doing that in the cart, like as a checkout? Or are you doing that in the email afterwards?

Peter Awad:

We're doing that in the email afterwards now. And we're about to get this built because it seems simple on the surface, but it's super complicated. Just a one click check box in the cart for you to be able to switch over from this one-time subscription that you've added over. So we're working on that. We're working on some on-page, silent nudges, we're calling them to get you to move over into subscriptions. So those are the things we're doing. What I find fascinating about subscriptions is that it's pretty dang clear. It's right there. There's price. And then there's a one-time purchase price and there's a subscription. And we'll have people along the live chat say, "How do I subscribe?"

Brett Curry:

It's the button that says subscribe that's right in front of you.

Peter Awad:

Yeah, it's right there.

Brett Curry:

How do I say this without sounding snarky? Yeah. So what's really interesting to me, just heard Ezra Firestone, a friend of mine talking recently about subscriptions. And his whole business is BOOM, by Cindy Joseph.

Peter Awad:

And he does an offer?

Brett Curry:

He doesn't, but here's why. His market hates him. So he even said they've offered a few times. So they're mainly selling to boomer women, women over 50, a lot of them over 60, 65. He said when they offered it, they got pushed back and not many takers. And then even now he said people will make orders and then call to say, "Hey, that's not like an auto subscription." There's one-time order like, "No, it's just one-time." So it's like, you do have to understand your market. Personally, I love subscriptions because I don't want to think about. So my cereal's on subscription, my supplements are under subscription. So I think for most people it's great. But I think this also goes back to knowing your audience and knowing what do they want? Most want subscriptions, but what do they want? How do you communicate it clearly? All those things are super, super important.

Peter Awad:

Yeah. And to that point real quick I think that demographic is used to getting taken advantage of as far as getting a phone call, to get them to send their life savings over to whoever the heck. So that-

Brett Curry:

It's still hard for them to cancel. They don't understand how to cancel so they're afraid of waste.

Peter Awad:

Yeah. And they're not as tech savvy, typically not to generalize. So that's super interesting. So we have some older demographic that purchase our product and we had issues with subscription too. So I've got another app. I don't know how many. We've got 75 apps, it feels like now on Shopify. And this one, all it does is it's very, very clear and well-designed notification three days before subscription, like, "Hey, just a heads up, you have a subscription and this is what it is. And this is when we're shipping it out. And if you have too much, just click this button and we'll delay it. If you got on this by accident, just click this link and you can cancel." So that has helped confusion a ton because we had folks that it would just show up on their door even though we sent a three-day notification before. And they would say, "Hey, what the heck is this? I didn't order this." And they did, right?

Brett Curry:

Subscription did, click the button. And I think that's something that's huge. And I think there may be still some this old school mindset that some people have where it's like, "No, no, I don't want to make it really hard for someone to cancel because it's going to kill conversion and stuff." But no, you're just going to make people mad. And if someone feels confident and comfortable, but canceling, adjusting, whatever is easy. They're going to be more likely to subscribe and more likely to be happy and refer and your life will be way easier. And theirs will be too, if you make that process smooth.

Peter Awad:

And you already paid to acquire them. So if you can just let them kick the can down the road another four weeks before their next shipment and then they go ahead and reorder. Totally cool. No problem. I'd rather you do that than cancel any day of the week.

Brett Curry:

Absolutely. That's really cool. Any new things you're testing from a CRO perspective, conversion rate optimization, perspective? Anything you're testing or any recent wins or anything to highlight there?

Peter Awad:

Not a recent one, but definitely testing, doing something like I said earlier, counterintuitive, which is removing all product pages.

Brett Curry:

Removing all product pages, what do you mean?

Peter Awad:

So just having one option, which would be like, "Hey, here's a... Create your own..." So we just started build your own bundles. So you can pick whatever flavors you want and whatever quantities you want, put that together and leave. I'm just curious, like what if we got rid of all our product pages and what if it was just this one build your own bundle page. And you just came there and there's nowhere else to go and just pick your flavors and leave.

Brett Curry:

That sound nuts. It could be great, I don't know. So you're rolling out that test now?

Peter Awad:

So we just got the bundle builder all set up and ready to go. And we're running some tests as far as like, if people are using it with still keeping our product pages. So one thing to know about me is I like drastic tests. I want information right now. A lot of times it bites me, but sometimes it's like, "Oh, well we just figured it out, took 24 hours and we figured it out." And if it doesn't work, we don't do that again. And let's move on instead of just having this long drawn out test. It's probably not for everybody, but-

Brett Curry:

Yeah, but I love that you're thinking that way, I love that you're testing. And it reminds me there's this exercise actually saw this again in a Scott Adams book, the guy that wrote the Dilbert cartoon. Who would always say, "Hey, what if the opposite is true? So this is our long-held belief. This is what we've been doing as a business. What if the opposite was true?" And not that you would do the opposite, but just that you would question the opposite. And sometimes you'll get brilliant breakthroughs. Or I think this is a cousin to that. Well, let's do something like a radical test, not with all of your traffic and not with your entire business. But let's do a radical small test and see how it does, which is super interesting.

Peter Awad:

That's where a lot of the innovation comes from though. It's like when I was walking through the meat plant for the first time, I didn't know what any of the equipment was. I didn't know anything. So almost every question I asked, I was like, "Hey, listen. I'm not a meat guy. But this is probably a stupid question, but why do you guys do it this way? Over in automotive, we would do it this way." And almost every single time they would say, "I don't know."

Brett Curry:

Maybe this is the way we've always cut the meat.

Peter Awad:

Yeah, I guess we can do that. Almost every single time. It's just because they've been so close to it and they've been doing it for so long that they just... So I love what if we did the opposite? This is the perfect question.

Brett Curry:

Yeah. So cool. Awesome. Well, let's do this. So a quick recommendation, then we're going to talk mindset for a minute because I think it'll be really fun and you and I had great offline chats. We'll talk mindset. I do recommend everybody go check out Mission Meats and it is missionmeats.co. Is that correct?

Peter Awad:

It is.

Brett Curry:

So missionmeats.co first of all, get some snacks. You can get them from the office for your remote workers or whatever, check that out. But also get on the list, pay attention. And I say this a lot on the podcast, but one of the best things that I think you can do is follow smart marketers, follow people that are really good at what they do. So check out what Peter and crew are doing at Mission Meats. So let's shift gears just a little bit Peter. I had a great conversation, I think before we hit record about mindset and about self-doubt. And about just some of the crazy things that creep up on entrepreneurs like us. They can get us down a little bit and keep us from being as successful as we could be mentally and spiritually in business and all that. So do you want to talk about your recent experience and some takeaways there?

Peter Awad:

Yeah. So Brett and I were talking, just before we hit record, you'd asked what else I want to talk about. And for me, I think that mindset's such a huge thing. And I've been infatuated with it since the beginning, because I feel like entrepreneurship is a roller coaster. It always is. It always has been. It's never going to end. So you have great days where you're on top of the world and the next day, you feel like the dumbest person ever and things are just not working. And this is why I've been infatuated actually with a planner and just documenting my thoughts. And what I'm working towards so the down days I can remind myself, like, "No dude, two days ago you were super inspired and you were inspired to do this. And this is what you were excited about. Don't forget dummy."

Peter Awad:

And I think we need that because we learn things and we quickly forget them. So what I was talking to you about earlier is that on Monday, this week, I was just having a down day, man. I just felt like nothing's working. And even my wife was like, "What's your deal? Last week you were like on top of the world, you were super inspired. You were driving me nuts because you were so on fire and it's Monday and what the heck's wrong with you?" And the thing that I've learned over the years, is it only takes a couple of losses. It takes something you were super excited about like a new campaign, a new product you wanted to launch something you were so sure, like this is brilliant. It's going to kill it. And then it doesn't. And you get a couple of those in a row and the devil on your shoulder's like, "Hey, dummy-"

Brett Curry:

"You didn't go as far as you thought you would. You're not as good as you thought you were."

Peter Awad:

"You're a fake man. You're a fraud, you're an imposter." And I feel like we've all got that. And the thing is you're not going to eradicate it. It's there. And being of the faith that I am, I know that that's just lies. Lies from the enemy that's just telling me these things that are just not true. And it's okay for a minute, wallow in it. I had a Monday where I'm like, "Man, nothing's working. I don't know what I'm going to do." But Tuesday I woke up and I thought, "No, dude, this is BS, it's not true. Couple things maybe work and what can we learn from them?" And sure enough, we made a couple of tweaks and we started to see, not like amazing home runs, but glimmers of hope like, "Oh, okay, this needed a couple more tweaks and it's going to need a couple more. And soon enough, we're going to keep turning those screws and soon enough, you're going to have some wins there." But if you can't get out of that Monday for me, the Monday, you're not going to find the Tuesday. You're not going to find the wins because you're just wallowing in these lies.

Brett Curry:

I love that so much. I think a couple of things that are encouraging here. One a reminder that all of us deal with this. So Peter, I was running a mission based company and killing it and doing so good and appearing on other podcasts, all this stuff. He has bad days too. Running a successful agency, I have bad days too. I mentioned to you before we hit record and I already talked about David Ogilvy a little bit. But David Ogilvy, one of the most successful advertising dudes of all time build one of the largest ad agencies of all time, it's still going today, long after his passing.

Brett Curry:

I remember reading a quote from him, and this was during the height of his career. He said, "In the back of my mind, every time we closed a new account, I wondered is this the one that I'm going to drop the ball on? Is this the one I'm going to screw up." And I thought, "Well, if it can happen to David Ogilvy and he's just like top of the world, it can happen to all of us. It's going to happen." So I think one it's normal. And two, you hit the nail on the head. It doesn't take more than just a couple of failures to create all this self-doubt or questions or whatever.

Brett Curry:

And think it can also be a loss in other ways. So just something that I've been processing is our company is really growing and we're growing in terms of number of people. And a lot of that is really, really exciting. I love investing in people. I love seeing our team grow and see them grow individually. But part of this process of growing is me as CEO, stepping back and saying, "I can no longer do this thing that I used to do and I could do really well." Or, "I've got to give up control of this thing. And my COO Sara's going to take more responsibility because she's doing great."

Brett Curry:

But there's also this feeling of loss there too. I guess in some ways I had some identity wrapped up in that thing, that one task that I did. I can't do it anymore. We're growing too fast so I've got to focus over here. So I think that's caused me to like, I've gone back to some Peter Drucker books, Effective Executive and looking at some other stuff and reworking my calendar. And just saying, "Hey, it's not supposed to be easy. If it was easy, then everybody would do it." And this is part of what makes the journey interesting. So yeah, I'm really glad you brought that up because we all need that mental retooling, that mental reset, whatever it is. Whether it's changing our inputs to get better advice from people, whether it's just changing ourselves talk a little bit. It's just critical. It's critical for success and health and enjoyment and all those things.

Peter Awad:

Yeah. I mentioned a planner.

Brett Curry:

Yeah. What was the planner? I was going to ask about that.

Peter Awad:

It's called the Legend Planner. I probably did five minutes of research and grabbed this off of Amazon. For me, it was just about the format and placeholders for certain things. And where it's helped me is like the days that I'm inspired, I write that down. Those are the things like, this is who I want to be, these are my dreams, this is the person that I want to become. These are the goals that I want to hit, all these things. So when I'm down, I can look and I can remember like, "No, dude, this is just a rough day." And you also said something too, before we started recording, which I think is super important. Sometimes it's just purely over-work or not getting-

Brett Curry:

Yeah.

Peter Awad:

Right. Sometimes you're not having a bad day, bro. You've been working too long. Turn the dang computer off and go chill out, man. Or get 10 hours of sleep tonight instead of getting six. That sometimes is enough to just snap you out of it. You're not depressed, you're tired.

Brett Curry:

Yeah. 100%. Love that so much. And one thing that I started doing, I don't think I've ever mentioned on the podcast, but a five-minute journal. And I remember this from the Tim Ferriss Podcast, it seems like it's maybe similar to what you're doing, but it's like .. Yeah, start the day with gratitude. What am I going to accomplish? And then at the end of the day, what are three amazing things that happened. Three things you learned from, whatever. I've been doing that for about two years now. My to-do list, I keep digital because that's just the way I like to work. But something about writing stuff down is still really, really powerful.

Peter Awad:

Yeah. There's a thought process of planning from behind and essentially what it means, it's like I asked you a homeschool statement. But at night I write down just... Instead of having, because, I'm the same, I'm in the sauna all day long. All my to-do's in there, I'm not going to write them down. This is stupid for me. But for my Monday plan, I do it at night and it's like, "Oh, these are the things that I got done. It felt really good." And it's not like checklists from work. It's like, "Oh, no, I played kickball with the kids, went swimming in the ocean." All these things. It's like the same thing as gratitude. It's like, "Oh, this was a really good day." I'm thankful for those things.

Brett Curry:

One of the simplest things you can do to increase happiness and I think it's just so powerful. So that's awesome. I will link to that planner in the show notes. I'll also link to the five-minute journal. Really good stuff, man. Peter, this was a blast. I'm really glad you carved out the time. Glad you made this happen and glad you also pushed to go beyond, I stay tactical and strategic on this podcast a lot. But talking mindset, it was a good little addition. It added some flavor to this podcast, which was really fun. So thank you my friend. Appreciate you taking the time.

Peter Awad:

Thanks bro. I appreciate it.

Brett Curry:

Yeah. Awesome. So we'll have to do it again sometime. With that, that will do it for this show. As always, we'd love to hear from you, our listeners love feedback. Let us know what you like, what you don't like. And if you have it already, we'd love that review on iTunes, that helps other people discover the show. And with that until next time. Thank you.

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Episode 134

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Molly Pittman - CEO Smart Marketer & John Grimshaw - CMO Smart Marketer

Navigating Volatility with FB Ads and Turning Problems Into Opportunities

These are two of my favorite people to interview and today I have them both with me for the same episode. And it’s a doozy.

CPAs that suddenly double overnight. Skyrocketing CPMs. Winning ads that suddenly turn into losers. Data changes that impact how ads are being run now. The list of potential issues, potholes, loopholes and blackholes for online advertising goes on and on. So what’s an eComm store owner or media buyer to do? Call in Molly Pittman and John Grimshaw from Smart Marketer. These are two of my favorite people to interview and today I have them both with me for the same episode. And it’s a doozy. Here’s a look at what we cover:

How to have the right mindset for navigating volatility (this is more important than you think)
What to do when ad performance tanks
Where you should tinker to improve performance and where you shouldn’t
Why this is still the greatest time in history to be a marketer - volatility and all.
3 Spot checks to make sure you are ready to scale traffic
The impact of the California Consumer Privacy Act and new changes coming to iOS 14….the good, the bad and the scary.

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Molly Pittman - CEO at Smart Marketer

John Grimshaw - CMO at Smart Marketer

Smart Marketer - eCommerce Courses by Ezra Firestone