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Hello everybody, and welcome to the Nerd Marketing Podcast, episode 31. I am Drew Sanocki, and I am coming at you from New York City, where I’m finally taking a break. A break being defined as being an hour break, not like an extended break. Man, I have been running the gauntlet of E-commerce speaking engagements, and workshops, and classes. I’m going to tell you all about that stuff today. A lot of good stuff to report. Basically I want to spend this podcast just kind of reconnecting, welcoming all my new listeners who I’ve met over the past month or two since my last podcast. I want to do a little bit on what I’ve been up to, and then where I’m going, what I’m working on next.
Let’s start with the former, so what I did first. I spoke at Traffic and Conversion. This is the huge E-commerce and digital marketing conference that’s put on in San Diego. It was, I guess about early March, this Traffic and Conversion went on. I was one of 10 or so speakers, and it’s easily the largest E-commerce and digital marketing conference I’ve ever been to. Thousands and thousands of people, it’s put on by DigitalMarketer.com. Obviously the focus is on traffic and conversion. A lot of big speakers. We had some people from Uber, some people from Casper, plus a lot of industry people there.
I was asked to speak about Karmaloop, and what went on there, and database marketing more generally. I’m happy to share my deck with you guys, and kind of what I did. Maybe I’ll do that as a separate podcast. But, my big takeaway from this was that the industry is still really focused on acquisition, and traffic, and hacks, and tricks, and bells, and whistles, and things that, silver bullets that people think are going to get them 10x growth in a year. It’s not to say that those things don’t exist, I think they do. But, we gotta beware of survivorship by us, right? Most of the blog posts that get published talk about these things, but it’s not reflective of the vast majority of other companies that are around just slugging away, just applying pressure over time, and growing slowly.
It’s not to say one’s better than the other, it’s just to say, “Hey, when you read a headline you’re focusing in on what that author tries to promote, and uses to promote that post.” Even within a post. You read a post on DigitalMarketer.com about some company that 10x’ed revenue in a year. Even within that company that 10x’ed, there was probably a whole mess of stuff that happened behind the scenes before they figured out the one thing that would catapult them to the next level. Just beware what you read. I think you see it in the eyes of the people, when you look out at these conferences. They’re just, they want the quick win.
I think I’ve been there, I’ve been in those seats when I was running my own retailer. I too, read those headlines because they draw me right in. I feel like I was one of the guys, one of the few people there, men and women, who was talking about retention. Not surprisingly, my talks are always 50% attended because nobody cares about retention. That’s the reality is that I think you gotta care about retention, and lifetime value. Anybody who’s listening to this podcast, I think is probably targeting a niche, right? There’s no mass market brands who are listening to my podcast. Everybody runs a niche business, and there’s a good reason for that. Niche businesses are easy to start, you can identify an under served category, you can roll into that category, and you can acquire customers very easily because it’s a niche, and those customers typically hangout in the same place, and read the same blogs, and do the same stuff.
That’s the plus, right? That’s why you want to start a niche business. The downside is by definition, niches are limited, and small. Once you acquire all the cheap customers measured by customer acquisition costs, then customer acquisition cost is going to go up, and up, and up. Eventually you bonk, and your customer acquisition cost equals your lifetime value. You’re no longer able to acquire the next marginal customer that you acquire, is not going to be a profitable one. And revenue and profits just bonk, right? That could happen at 500K if you’re in a smaller niche, it could happen at five million if you’re a bigger niche, but it happens no matter what.
The answer, the way to get … There are two ways to get out of that situation, right? For those of you who experienced that quick growth, and then you bonk. The first way is expand beyond the niche, right? If you are selling wallets, start selling belts. If you are selling sweaters, to use another apparel ex- expand beyond that category. That’s one way. Sell more things to that same customer, or find newer customers. Then the other way I think is to focus on the other side of the equation there. If you’re acquiring new customers where the custom acquisition cost equals the lifetime value, in other words your break even on all new customers, then instead of fixating on acquisition, and customer acquisition costs, fixate on the other thing. Fixate on lifetime value, get that up.
One of the best ways to do that is retain customers. There are a lot of ways to do it, but that’s what my talk was about. I think for those of you who are in that bonk area, check out my free course at NerdMarketing.com/Double. It’s about doubling your E-commerce business. I talk a lot about this, this concept of niches, and bonking. I call it the, “Nichey commerce wall of death.” Then I give you some ways to get around that, around that wall, or over that wall. That was my first big takeaway, industries really still focused on traffic and conversion when there’s usually easier way to do things, right? Than that.
Another big takeaway is that people want a quick win. They want the silver bullet. In my experience at Karma Loop, at Old Time Pottery, at Discount Mugs, at Design Public. I could just rattle off every retailer I’ve ever run marketing at, right? Or worked at. Growth is a process. It’s not a quick win. If you find the silver bullet, the silver bullet itself is the outcome of a process, right? You need the process in place first.
My mentor, John Bresee, who started BackCountry.com, told me this. The first time I went and visited him I was like, “I want to know everything you know about E-commerce, and how you built this 100 million dollar outdoor equipment retailer.” He’s like, “You know what Drew? There’s no silver bullet. What wins in E-commerce is pressure over time.” That stuck with me, pressure over time. I was like, “I can do that.” I don’t have to be as good of content market as Neil Patel, or as good at Facebook at Jon Loomer, right? All I need is the process, and I’m going to rise to the top over time if I can nail the process. It’s the great equalizer.
Growth is a process, and what that means really for you day to day, is number one, start a backlog of every idea you have on the marketing side. Everything goes into a spreadsheet, everything goes into a Trello Board, or a TeamWork.com project. Everything goes in there. Number two, you review that thing every week, every other week, but on a regular basis. What you’re doing is ranking. You’re ranking what you expect to be the top, most effective tactics that also will take you the least time to implement. I recommend two metrics. I recommend expected impact, and I recommend implementation time. I recommend that you rank these things by both those two factors.
Then you pick off the top, and you sprint over the week, over the two weeks, or the month. You’re implementing that one idea. That one test, or that one technique, or that one change. You’re implementing it, you’re testing it, you’re learning, and then if it worked, you’re rolling it out, you’re standardizing it. If it didn’t work, you might tweak the test, you might add it back in the backlog. Then you’re picking the next thing off.
This is an approach called, “Scrum.” It comes from software development. But, I think this is the way online retailers, and SAS businesses should run growth. There’s a lot of intellectual horsepower behind this guys, like Brian Balfour who ran growth at HubSpot, and Hiten Shah at Kiss Metrics, all use this approach. I think everybody should use this approach. If I were running a retailer today, I’d use that approach. I’m helping run a SAS company today, I’m using this approach. It allows you to scale, it allows you to be more methodical, allows the CEO to do other things, and know that growth is kind of in place and happening.
To help you with this, I offer up a marketing backlog, a spreadsheet that you can use. I’ll link to it from the show notes, but also if you take that free, “Double your E-commerce business course,” it’s linked to from in there. Again, that’s NerdMarketing.com/Double. Hope that helps you out. That was Traffic and Conversion.
Next up, was a brand growth intensive workshop. A two day workshop in San Diego I held with Austin Browner from E-commerce Influence. The focus was on helping about 15 or 16 brands, direct to consumer brands, implement life cycle marketing using Klaviyo. I loved it. I really loved sort of that personal contact. I don’t get to meet a lot of people. I mean I do virtually through the blog, but face to face. There’s just something there when you’re meeting somebody face to face, and talking about their business. There’s just, every business is different, and you get to hear the nuances and realize that it’s tough, and you really need that process to sort of grow.
Country Pet, Boardwalk Shirts, Tough Wraps, Trad Lands, Zero Shoes. All you guys, I loved meeting all of you, and hanging out for two days eating some great Mexican food. And meeting Austin, who’s a really smart guy, and I loved hanging out with him. It was only the second time I’ve actually met him, although we teach a lot of the same stuff. I think we all had a great time.
If I were to come back with any takeaways, I think the takeaways are most people who are using Klaviyo to run their email marketing, are still only using about 10% of what it can do. It’s not always their fault, I mean it’s a difficult system to use. If you are going to upgrade to something like Klaviyo, spend the time to get that other 90% either with an intensive like this, or just on your own. That’s the only way you’re going to get the dollars per subscriber per month up, is if you’re doing your welcome sequence, your VIP sequence, your anti defection sequence, your win backs, all these things. Pivoting them to Facebook, that’s the only way you get that magic number up, so spend the time to do it.
That was the workshop with Austin. Well, we’re going to do more, probably at least in the fall. Stay tuned. Third thing, I did a masterclass on E-commerce with Conversion XL, or through Conversion XL. Pep approached me a couple months ago, Pep being the guy who runs Conversion XL. Great blog about conversion rate optimization. He wanted an E-commerce course, so I worked with him pulling this together. It is a more advanced version, or it was a more advanced version of the free double course that’s available on my blog. I took that thing to the next level, added in more templates, and helped a little bit more with tear downs, and implementation, made it a little more focused and that was the Conversion XL class.
My big takeaway there, we had about 100 attendees, most of whom were I would say, starting out. A little bit more on the starting out side, the startup side versus the bigger ongoing concerns. The takeaway was people still get hung up on the tactics. People get hung up on implementing Klaviyo a certain way, and which is the best Shopify app to do a popup, and should I time my popup at exit intent, or should it be entrance, or should it be delayed 15 seconds? I, again, I’ve been there, because I’ve fixated on those things, and I sort of … It’s part of a broader issue with humans, and productivity I think. Where we focus on a lot of smaller things, thinking we’re doing work, instead of the big picture things that move the needle.
People want certainty, you know? They want to know they’re doing the right thing. I get it, and so I tried to address a lot of those concerns in the class. If I were to step back, and if you haven’t taken the class, I would say always think of the 80/20. Think of the big rocks, what’s really going to move the needle? Which 20% of my customers are driving my business? Which 20% of my products are driving my business? Which 20% of my webpages are driving most of the traffic? Focus there, those are the big rocks that are going to move the needle, not whether your popup is 15 minutes, deploys 15 minutes in, or 15 seconds in. Those are the big takeaways.
I think if I were to point you at another podcast episode on my site, I’d go to podcast 16. That’s NerdMarketing.com/16. In that one I show you how to do some basic segmentation in Google Analytics. Do that segmentation, figure out what’s driving your business, and start there. Those were the three big, that was the first half of the gauntlet I ran through. Traffic and Conversion, the workshop with Austin, and Conversion XL masterclass.
I am still in that gauntlet right now, so that brings us to what I’m working on now. I’m almost out of, it’s not like a painful gauntlet. I’m not naked or anything, getting lashed. It’s just, it’s a gauntlet, you know? It’s a mildly painful gauntlet. It’s almost over. I am now teaching something called the, “Build a bigger business course,” for Shopify. Those of you on Shopify know they have a build a business competition. Tim Ferris launched it a couple years ago, and it’s all about who can start the business that gets the biggest in the first, I don’t know, six months or something. This is the follow on for that.
They said, “Hey, we’ve got 1,000 stores that are doing a million or more per year in revenue. We’re going to take the top 1,000 Shopify stores, and we’re going to build a curriculum for them.” It’s called, “Build a bigger business,” and it’s about how to go from one million, 10 million, to like 100 million. The coaches are Tony Robbins, Marie Forleo, I think Ferris is still involved, Drew Sanocki, and others. You might, one of those is not like the others, and that would be me. Obviously not as many people know me as know those guys. I think I’m the only person talking E-commerce. Those other coaches are in there like, it’s a little bit, “Rah, rah.” A lot of, “Go out there, knock them dead, get to a million, get to 10 million.”
My course is a little bit more specific, and it’s about really database marketing, it’s about if you are at a million, how to get to 100. I really focus a lot on what happened at Karma Loop. A lot of the techniques, and templates, and strategies behind what we did there, and what we’ve done at a couple other big retailers to get some epic growth. If you are a Shopify user doing more than a million, check it out. It’s called the, “Build a bigger business competition.” Sign up, give me feedback on my course.
Aside from that, that was the last guy in the gauntlet was the Shopify guy, and then across from him was a bunch of growth strategy work. That’s always interesting, I always kind of keep that a low burn. Right now I’m working with a retailer that spends 40 million a year on marketing, 39 of which goes to a catalog, and one million to digital. The challenge I have is figuring out how to increase that digital spend in a way, and work on their attribution model so it’s not like I’m cannibalizing the catalog. That is really exciting, I hope to share some of that with you.
From what I’ve heard, more and more of you are experimenting with catalogs. Really, there’s a lot to go into there. In my experience, catalogs work. Mail works, like old school mail works. I hope to do a podcast on that someday, about how even startups can use mail. I recommend an app called, I think it’s “Touchstone.io.” Which plays well with Shopify. If you want to start sending out postcards. Think of postcards as sort of like a low tech version of email, or retargeting. Works really, really well if you target the right list. In this case for this retailer, what I typically see is catalogs can generate demand, and stores can generate demand, and mass media can generate demand.
E-commerce can capture that demand. It’s a little bit harder to generate demand in E-commerce. Email probably being the best way, video also helps, but it’s harder. As much as we want it to be easier, E-commerce is typically more of a demand capture medium. What you find is, at some of these retailers that are spending an arm and a leg on their catalog, they launch these E-commerce divisions which immediately work, and they get all the credit. But in reality they’re just capturing demand that’s been generated by the catalog, so you kind of have to attribute the E-com cost of the catalog.
Anyway, as we move along I hope to share more on that engagement with you. That’s really what I’ve got going on, and what the past month or two had been up to. A lot of good stuff coming your way. I want to launch two new classes. I’ve got my conversion playbook up now. I want to update that with some new tips and tricks that I see working really well, so standby for that. I also want to launch a retention and a launch class, which have been under wraps for quite awhile. I encourage you to join my list, and get my emails. I also want to get back to my discussion of how to build a lifestyle business, which I sort of put on the back burner because I was defying my own advice, and not leaving that business for the last couple of months. But I’m back to it, and let’s continue that conversation.
Thanks for your time. My name’s DrewSanocki.com, this is the Nerd Marketing Podcast. I’ll talk to you next week.