Today, I’m thrilled to have Daniel Parker on the show. Daniel is someone who I met at the Ecommerce Fuel Live conference in Savannah, Georgia and he actually taught me a few things that I was not doing with my Google Shopping ads that I promptly fixed as soon as I got home.
Daniel runs MyChoiceSoftware.com which is an online store that sells boxed software online. Selling off the shelf software is an incredibly competitive niche but he does extremely well making well over 8 figures last year. Enjoy the show!
What You’ll Learn
- How Daniel got into ecommerce and why he decided to sell boxed software
- The margins for selling software.
- How he differentiates himself from the thousands of other stores selling the exact same software
- How he advertises his store.
- His main sources of traffic
- How to optimize Google Shopping campaigns
Other Resources And Books
Klaviyo.com – Klaviyo is the email marketing platform that I personally use for my ecommerce store. Created specifically for ecommerce, it is the best email marketing provider that I’ve used to date. Click here and try Klaviyo for FREE.
Ignite.Sellerlabs.com – If you are selling on Amazon and running Amazon Sponsored Ads campaigns, then Ignite from Seller Labs is a must have tool. Click here and get a FREE 30 Day Trial.
ReferralCandy.com – If you’re already getting steady orders every month, adding a refer-a-friend program to your store can give you a new sales channel. And ReferralCandy is the best in the business. Click here and get a FREE $50 credit towards your account.
Today I’m thrilled to have Daniel Parker on the show, and Daniel’s ecommerce store is pretty unique in that he created an eight figure ecommerce business selling boxed software like Microsoft Office, and he did it with Google Shopping, crazy, right?
But before we begin I want to give a quick shout out to Seller Labs who is a sponsor of the show, and specifically I want to talk about their brand new tool Ignite which helps sellers manage their Amazon sponsored ads. Right now I’m using this tool to manage my Amazon sponsored ad campaigns, and it makes things a heck of a lot more convenient.
So number one I’ve always found it a major pain to generate my PPC reports on Amazon, cut and paste the data over to an excel spreadsheet and use pivot tables before I’m able do any analysis. Now Ignite pulls all that info for you automatically and allows you to easily see what keywords are working and what are not immediately, there is no need to manually create reports or play with excel.
Second of all unless you’re a data geek, Amazon campaign data can be hard to understand, and what is cool is that Ignite makes keyword and bidding recommendations on the fly that can be applied with a few clicks.
So let’s say one of my hankie keywords is bleeding money, well Ignite will alert me of that fact, and I can reduce the bid immediately. So bottom line Ignite makes managing your Amazon’s sponsored ads so much easier, and the fact that they provide me with alerts means that I no longer have to monitor my campaigns like a hawk.
If there are keywords that are doing well, well Ignite tells me to add them to my exact match campaigns. If my keywords are losing money, well Ignite tells me to either remove the keyword or to reduce the bid. So head on over to sellerlabs.com/steve where you’ll find awesome tutorials on how to run Amazon PPC ads and the opportunity to try Ignite for 30 days for free. Once again that’s sellerlabs.com/steve.
Now I also want to give a shout out to Klaviyo who is also a sponsor of the show, and I’m always excited to talk about Klaviyo because they are the email marketing platform that I personally use for my ecommerce store, and I depend on them for over 20% of my revenues. Now you’re probably wondering what makes Klaviyo so special. Well Klaviyo is the only email platform out there that is specifically built for ecommerce stores, and here’s why it’s so powerful.
Klaviyo can track every single customer who has shopped in your store and exactly what they bought. So let’s say I want to send an email to everyone who purchased a red handkerchief in the past, boom. Let’s say I want to set up a special autoresponder sequence to my customers depending on what they bought, well that’s piece of cake, and there is full revenue tracking on every single email.
Klaviyo is the most powerful email platform that I’ve ever used and you can try them for free at mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/K-L-A-V-I-Y-O. Now on the show.
Intro: Welcome to the My Wife Quit Her Job Podcast. We will teach you how to create a business that suits your lifestyle, so you can spend more time with your family and focus on doing the things that you love. Here is your host, Steve Chou.
Steve: Welcome to the My Wife Quit her Job podcast; today I’m thrilled to have Daniel Parker on the show. Daniel is someone who I met at the Ecommerce Fuel Live Conference in Savannah, Georgia last year, and he actually taught me a couple of things that I was not doing with my Google Shopping ads that I properly fixed as soon as I got home.
Now Daniel runs mychoicesoftware.com, which is an online store that sells software online, which is an incredibly competitive niche. But he does extremely well making well over eight figures last year, and today what I plan on doing is to pick Daniel’s brain on how he is able to compete in the cut throat space of computer software. And with that, welcome to the show Daniel, how are you doing today man?
Daniel: Hey, pretty good.
Steve: So give us a background on how you got in ecommerce and why box software of all things that you could sell?
Daniel: Yeah, so I came out of an engineering background writing enterprise part systems back in 2007, 2008 writing the backend for AutoZone, and like most people coming out of school I had a lot of student loans, so I ended up having two or three jobs. One of these other jobs was writing marketing software for a music and cancer promotion.
Well, one of the senior leaders in our software engineering company ended up leaving and going into software with his cousin who had been selling software online for a number of years. I got into that business, learned that business, learned that if you added a value added service on top like digitalizing the products for people, or getting the logistics to them faster, you could get huge swerves of people that were willing to work with a smaller boutique firm, that didn’t want to work with the CDWs and the Neweggs of the world where they dealt with large offshore teams or automated response queues, or just people that really didn’t know how the software worked, they just knew customer service.
So jumping into this we took the approach of getting really highly trained people that could speak to these people from a point of interact and explain what the software did, how it worked, how it was going to benefit them, and then gave them expert pricing around that, so I learned that business.
Fast forward a couple of years and a few other engineering jobs, I got an invitation to come work for My Choice Software with my partner now, and we basically focus on the same model. So we took something that was highly competitive with high brand awareness, that had a pretty decent size of reseller market, and we just took really intelligent people on the front to speak to these IT directors, these managed service providers, all the people that were buying for other people.
And we focused on developing those people as part of our marketing approach, our marketing and sales parts. And then through that we ended up building up quit a robust set of ad spend, where today we run about a 15% [inaudible 00:06:38] across the entire board, but we do have 40% return from our customers.
Steve: I was just about to ask you that, so what are the – so just for context for the people listening Daniel sells software like Microsoft Office for example. A lot of these tools from companies that are just well known and well branded, and so Daniel I’m just curious what the margins are like for just selling like just the pure software excluding the services?
Daniel: Yeah, so just the pure software is running right around 20, 25%.
Steve: Okay so it’s basically impossible, or it’s really difficult just to make money selling software by itself?
Daniel: Right, so you’re always trying to up-sell, you’re always trying to sell a service. You’re basically hunting for the people out there in the waters that are going to buy two or more units.
Steve: Okay, and then the way you kind of pitch yourself where your value add is the service?
Daniel: Correct, so we’re adding service on top, we’re adding knowledgeable stuff, short call cues, instant downloads. We’ve done quite a bit to speed up the delivery of these products for different customers so that they can get in their needs bun which ends up – most people these days want to be able to install an app instantly, get it right away. So we’ve done a great deal to alleviate that issue of receiving the box in the mail, installing it and then going through that entire process.
Steve: So just to be clear then like your target customer is not someone like me, it’s someone who runs a company?
Daniel: So yeah absolutely. So we do have a large consumer base, but consumer base in software has a seven year return cycle, so meaning if I sell you Office today, seven years from now you’ll probably buy Office again unless you’re buying a subscription. So we specifically hunt for company buyers that are going to repeat, buy but even more specifically we’re searching for computer repair shops, computer service centers, anyone that has — computer consultants that have a large number of clients where they are doing the buying and purchasing for those customers.
Steve: Okay, and so before this interview I actually went ahead and did a couple of searches for like Microsoft Office for example. And I noticed that in the main AdWords – I didn’t see any of your ads, but you like dominated the Google Shopping ads, and so I was hoping to talk about that a little bit, because I know that there’s just tons and tons of companies selling the same software that you are. And so how do you advertise your store, and how do you kind of convey your value add to the people?
Daniel: Well, that’s kind of a multi point question, is the question…
Steve: Let’s talk about getting customers in the door first.
Daniel: Yeah so getting customers in the door, all right so some companies focus on SEO, some companies focus on straight AdWords. We decided to focus on product listing ads because our target customer was either searching for a skew or they were searching for a full end title, or they were searching for some variation in the title.
So when we went about kind of developing our plan, we decided that we were going to chase down every possible optimization that could be done in AdWords like product splitting by title, different content in the descriptions for different ratings trying to convey all the information the customer needed in the first four seconds of being on the page, and then allowing them to make a snap decision on, is this what they were looking for, and then we use keyword shaping.
But basically our approach was always to try to separate the consumer from the business user. So everything in our AdWord strategy is the first couple of times you search you’ll see us a lot, and then once we learn more about the customer we start to narrow that focus.
Steve: Okay so let’s talk about that process because from what I remember in our conversations what you do is pretty intricate and pretty detailed, so let’s just focus on PLAs for a moment.
Steve: So what do your sales funnels look like and how do you run your PLA ads to weed out these people who are going to be buying often?
Daniel: Yeah, so the funnel specifically is to reduce the barrier to entry to get somebody and get them on the phone or on chat as fast as possible. So when you hit our product pages, you’re seeing chat with us now, speak with a representative of the office in the United States, just high availability imagery and content messaging to say, “Hey, we are here, we are able to negotiate on price, we are able to set this up for multiple people.”
So the end user – you’ll end up getting a portion of them that will communicate through and they’ll ask some general questions about the product, and we try to include that in the product messaging so that it’s all upfront. And what we’re trying to do is suck up the people that are business buyers, anyone who wants two or more.
So anyone who wants to two or more we pull out by the sales team once they’ve gone through and made a purchase, we solicit them directly, they’ll go into a different remarketing group, we’ll pay more for them, there’s a number of techniques that go into it.
Steve: Okay and then in terms of the number of people who actually take advantage of the live chat and that sort of thing, what percentage is that and then what is your close rate for the people that you actually do manage to get on the phone?
Daniel: So the close rate for people on the phone is quite high, I think as long as – the element of selling software is like selling a toilet seat, right? You know that you are in the market for a toilet seat, but you just don’t know what toilet seat is going to save your fixture. So essentially when you get these people on the phone rarely are they worried too much about price, they are trying to find the unit that’s right for the equipment they have.
So you’re never really having to fight much on price with the basic consumers because they’ve already determined that they want to buy it from you, they like the trust factors on the site, they have a good feeling about it. So the customer service is really getting them the in-depth information that they need, but it scales on complexity.
It’s much easier to say, “Hey yeah this is Microsoft Office we want to install on your computer,” as opposed to, “Well this is how many licenses of this $7,000 SQL Server you need for the cores in your computer with 6 VMs and all of this more complex licensing information.” So our staff for the most part except for the most junior people are trained to answer the simple, this is what will work on your computer, all the way up to, this is the licensing compliance diagram that we need to follow to make sure you’re complaint with Microsoft.
Steve: So does that imply that your Shopping campaigns, you convert well enough on like the first click, or do you do a bunch of things, like I’m trying to get into depth about how you run your Shopping campaigns. So I understand you probably have this broad funnel for keywords, and then you try to grab as many of those people as you can, but like how do you kind of extract out and target just the big buyers with your Shopping campaigns?
Daniel: Sure, so the main thing about the – so there’s two factors. First off we take a whole product approach, we get somebody in with the cheap products so that we can remarket them and re-solicit them because you’ll pay up to the full profit if not more on those preliminary hooked products like Microsoft Office to identify and target a repeat buyer.
So for us, that’s simply just look at their email, look at their website, figure out that they buy more stuff, re-solicit them with a coupon, and then have the sales team call them. On the larger products front, like when we’re selling SQL Server or we’re jumping into a new product line, we’ll specifically go out there, measure the competition, see who is not following the Shopping guidelines. We’ll target them, we’ll build up their entire product base that they’re advertising, and then we’ll block their IP and advertise on top of them and absorb those sales.
Steve: So let’s back up a little bit, the reason why I’m asking these questions is you mentioned before that software only carries a 20% premium, right?
Steve: I mean margin, and so when you are writing these Google Shopping campaigns, you mentioned the hook items, so you’re not making any money at all for example selling Microsoft Office in that case?
Daniel: On a single license of Microsoft Office we make practically no money.
Steve: Okay, and so the key is you’re getting these people in through Google Shopping, and then you’re finding the people who are the big whales so to speak, and then you’re doing a lot of outreach to those people?
Daniel: Exactly, so an example of something that happened this week, a customer that we acquired back in November on a deal spread ended up doing $195,000 deal to do database servers in Haiti. So that one hooked product that absolutely came through our PLA network, got this guy in, got him talking to a sales person, built up that level of trust, and turned into $200,000 deal down the road.
Steve: So let me ask you this, how do you – because that first round of Google Shopping is not profitable per say and you make all of your profits kind of on the backend, how do you measure like the ROI of your campaigns?
Daniel: Sure, so we basically have a benchmark, we basically are picking the positions we want to be on certain products and then measuring those accounts across the longer line. So it doesn’t make sense to advertise heavily on something like antivirus, personal antivirus. It will go on a bargain bin; we’ll basically make sure that we follow all the SEO guidelines, we wrote our own tool to do this called Feed Doctor that optimizes the products for brand position and ranking inside Google PLAs.
We make sure all those details are as good as it can be, and then we look at what we spend on Microsoft Office in a week. So we’ll find that we can spend 15% on Microsoft Office, still turn a profit, look at the total amount collected, and we’ll find that in five sales somebody buys two or more. So if 20% of customers are buying two or more, it actually turns the rollers [ph] on the entire investment into that product channel as a positive return on ad spend.
So instead of being 25% on the line item, we’re looking at a genre of products that lead to further sales down the road, and we’re calculating that as a whole.
Steve: I just want to take a moment to tell you about a free resource that I offer on my website that you may not be aware of. If you’re interested in starting your own online store, I put together a comprehensive six day mini course on how to get started in ecommerce that you should all check out. It contains both video and text based tutorials that go over the entire process of finding products to sell all the way to getting your first sales online.
Now this course is free and can be obtained at mywifequitherjob.com/free. Just sign up right there on the front page via email and I’ll send you the course right away. Once again that’s mywifequitherjob.com/free, now back to the show.
So from what you just said, are you implying then that the two or mores you kind of assign a certain weighting factor to it when you’re measuring the effect of this on your Shopping campaign?
Daniel: Correct, so the conversions are tracked in two ways, we track the total units sold and then we also track the amount of converted clicks, and then we’re weighting those based on a ratio. And there is a factor in price point there too. If you’re too cheap or too expensive it can affect that ratio.
Steve: Okay, so I also noticed that you dominate the Google PLAs, which kind of implies to me at least that you’re spending more money than the competitors, is that accurate or how do you dominate those search rankings?
Daniel: Sure, to a degree, search rankings in Shopping ads are different than any other search rankings out there. The ranking statistics are based on Google’s effected click through rating, and they measure that against their compliance statistics. So if your description is less than let’s say 300 words or you don’t have 1,000 by 1,000 image or you don’t have the brand in title, all of these factors kind of go into how Google assigns your rank, and how they assume your click through rating.
So they basically pick the people that best matched that product search or whatever somebody is searching for and puts that up top. So do not – bidding over top somebody else, you’re just Google’s best pick for what they think people are looking for, and then you validate that with your ability to process those transactions on the backend.
So we’re showing stars, we’re doing Google transit stores, we’re doing promotions, we’re doing sales, we always make sure to show free shipping, promotional text, and as compared to our competitors, they don’t even have the review stars on their products. We aggregate reviews at probably 50 to 100 a day on products. So once you have a certain amount of reviews on products, your product will immediately stand apart in the top Google product search when you have it on the primary screen.
Now when you get into the secondary screens where people are ranking by price or ranking for the buy box there, it is a different set of statistics. In that case they’re typically saying, “All right, these products are the same thing, these guys have a better price, but they meet our bidding and compliance standard.” So there’s actually three different sets of rules, and what we found is before we fixed our data we were paying on average 3 to $5 a click, after we got all our data into compliance, really optimized everything, it was $1.50, and we were getting way more through put.
Steve: Okay so let’s go through all the elements of compliance if you would, at least the most important ones, let’s try to highlight those.
Daniel: Sure, so image size, brand, and title.
Steve: So image size you mentioned it should be a square image of at least 1,000 by 1,000?
Daniel: Well, they say 800 by 800, the minimum is 300 by 300, but they scale these images in different places. So they are going to use these images in dynamic apps, they’re going to use these images in display ads; they’re going to use these images on mobile. So they say 1,000 by 1,000 but sometimes people have 1,000 by 1,000 white cube and a little tiny product in the middle.
Ultimately the image that you pick needs to be attention grabbing, and in our case we’re kind of limited by how many changes we can make because it’s someone else’s brand. But if you have a high contrast image elements that you can convey that set you apart from other people, in a parallel they find the people with children or people in the photos tend to get a better click through rating, and just one of the things that guys at Google told us way back was rotate your product boxes by 30 to 45 degrees and you’ll get a better click through rating with a 3D image than a flat image.
So we went through the process of kind of doing those best practices and then we made sure that all the details that we could sell out were correct, that we had the best image quality, the best descriptions, the descriptions are pretty important.
Steve: Are you allowed to put promotional language in your images for Shopping?
Daniel: You’re not supposed to and you’re not supposed to put it in your actual product description as well. So they are kind of hard on that, but they’re not doing too much visual checking. They are looking at the density of words that they can read from it though it’s not as much like Facebook where Facebook has a 30% policy for text image, in Facebook you’re only supposed to use 30% text.
But PLAs for us, it’s really been making sure the descriptions are great are kind of one tactical play that we look at is we look at the display tab in Google Shopping in AdWords, and we find out that these keywords are generating clicks for these items so that we craft duplicate items with different keyword subsets in the title to closely match someone’s searches.
Steve: Okay, so let’s talk about that a little bit. You’re saying you’re figuring out which keywords people are using to search for your software and then you’re putting those in the title tags?
Steve: Okay, and are you putting those in the description as well – so you’re duplicating products?
Steve: The exact same product but you’re using different verbiage?
Daniel: Right, and the way that we get around the duplicate products thing is we change the description enough so that it’s changed so that it’s not exactly the same. They’ll have some similar key points like the specifications will be the same, but the writing over top will be different. They’ll also have a different product ID, a different product skew, and occasionally they’ll have the same UPC but it’ll just be a different display of it.
Steve: Interesting, so inventory wise though it all pulls from the same inventory?
Daniel: In some cases, sometimes you have two versions of Microsoft Office home and business and they have two different skews, then you’ll provide both of those skews. But Microsoft took this approach way back, they created a product and then they created 25 different skews for that product. What we did was we took those 25 skews and we keyword shipped around what people would be looking for to get to those.
Steve: Okay, when in reality it’s the same software just packaged differently?
Daniel: Right, and the one thing that nobody seems to understand clearly about Shopping is it’s all keyword driven. The only thing that you can eliminate is negatives, but it’s looking for keywords in your title and it’s looking in the first couple of lines of your description.
Steve: So in terms of your description, does it pay to have a really long description, or is it just as you just mentioned just the first couple of sentences?
Daniel: So it still uses the Google SEO laws, so you’re still trying to get 300 words, and they basically say in not so many words on some documents that I’ve seen that you’re penalized for not having 1,000 characters or more.
Steve: 1,000 characters, okay.
Daniel: Yeah, so they understand the product descriptions and SEO page regulations are different, but they look for 1,000 to 5,000 characters in that description even though they might not display it, they might display it somewhere else later. And really specifically in SEO standard practices, you want the keywords that you’re trying to focus for on the first line, so if you add those keywords that you’re trying to focus on in the first line of your product description, you’ll see them highlighted from the Google Shopping page when you’re in the actual Google Shopping perspective.
So if you put Microsoft Office home and business, and that’s in the first line of your description, that’s going to be highlighted as well as the keywords it matches in your title.
Steve: Okay, just the other day I was looking through my PLA ads and I’ve noticed that some of my products never get any impressions and they’re very similar to the products that do get impressions, and I did follow a lot of the things that you suggested which is doing the structure markup which we’ll talk about in a little bit, and I have alternative images. What other ways besides – so we’ve talked about the image, we’ve talked about the description, what else is there?
Daniel: So you can use back in the titles, but it depends if you get the list view or the grid view. Grid view basically takes all of the candidates that came back for that search term and they put up the candidates that have the best return for them or the best projected return. So to even be considered you have to have the keyword matching in your description, in your title, and sometimes they look at any sort of product typing that you’re submitting.
So let’s say you searched for bed linens and a comforter, you probably will see all bed linens, but let’s say you have a comfortable that goes with that that you wanted to show up in the same thing, Google will look at that taxonomy and say, “Look, these are the products that get the best clicks, we’re going to just exclusively use this taxonomy.”
So later on if you want to show me this example, I can take a look and basically determine on a finite level why it’s not getting searches on that query.
Steve: Sure, I was just asking about your software though, it seems like you have all these different skews, do all of them get impressions like in your feed?
Daniel: So we actually, we scale them on the backend, so after they go through the – we kind of call the checked bucket, we throw them out there, we throw them out on super high bids and we monitor their click through, and then we sort them into a priority bidding scale where we determine they’re either great value, best value or special value, and based on what we see in their performance in click through, based on an advertising subset of one month, we basically determine how much we’re going to pay to bid on those things.
And then we monitor what keywords they’re getting clicks on, what negatives they’re working with them, but we don’t ever want to be in a position where two things are competing against each other. For example we have ten different versions of home and business and they are all different skews, but we found that during our test of home and business, one performs really well.
So we’re going to bid high on that one and then low on the other ones and then grade them across that scale, because you don’t want to end up having two of the exact same product competing against each other.
Steve: Okay, so in the beginning you’re bidding really high for like a month just to gather data from what it sounds?
Steve: Okay and then based on that data you pick the ones that have the highest click through rate, bid higher on those and then bid lower on the ones that don’t?
Daniel: Right and we’ll also use priority stacking, so something that has…
Steve: Let’s talk about that actually yeah.
Daniel: Yeah so the priority stack is pretty interesting, it seems they got – limited the ability to bid on keywords, you have to kind of negatively shape a keyword and look at the value of that keyword. So for example I don’t know if Skype is listening to us, but it just started showing me Microsoft Office ads.
Steve: Okay, it could be.
Daniel: Off topic there. So with the keyword priority it’s like you want to take your top performers that you want to spend the most money, and put them in the high priority campaign with the keywords that you know are going to generate sales.
Now you might have some broader keywords, and you might want to create a standard priority campaign where you have the same set of products, but you bid less for those products on the standard campaign or the standard keywords that are broad like Microsoft Office. How do you know which Microsoft Office they’re looking for? You don’t, so you are going to take some candidates for that, you’re going to set up bid schedule.
But if they go highly specific you want to bid high, if they are broad keywords you want to bid kind of mediocre, and then you have your bottom bid which is keywords that aren’t truly related, somebody searched for example not QuickBooks software, but they searched for accounting software and it generated a sale after 30 clicks or something like that for QuickBooks.
So we’ll put that in the bottom bid, we’ll eliminate accounting software from a – to high priorities where we’re going to spend a lot, we’ll throw that in the bottom bid, and if they happen to come across this for 15 or 25 cents, then we’ll take the deal, and then we frequency capped the two bottom ones.
Steve: Okay and then how often do you actually reevaluate the keywords and everything, like how often do you look at your campaigns?
Steve: Wow, okay so you’re looking at negatives every – do you use software for this or do you do it manually?
Daniel: A little bit of both, so we’ve built our own reports that kind of find where things have gone out of work or out of performance, and we use rules to turn stuff on and off. Like if something – the biggest dagger in product listing ads once you get a high budget is you’ll find something that was performing great and it was performing great, and then somebody came along with a better price of the exact same product, undercut you, you’re still getting clicks but this guy has the exact same product with a slightly better display and all of your sales drop out.
So you have to use rules to basically – rules and reporting to determine if your products on a line item level are still performing, and then that has to be matched against their price points. You need to know when your competitors are doing, so we have charged that point what the competitor pricing is, and there is quite a bit of work that has to go into just maintaining a single PLA set of campaigns with about 2,000 products. It’s a full time job for two people.
Steve: Wow, okay so that implies that your Shopping campaigns like the ads themselves are very granular, meaning like the keywords that you’re targeting are just very specific to individual products instead of like the way I kind of – for example like I do it. I target like broader keywords since we own all of our own brands.
Daniel: Yeah, so it’s specific to products but it’s also specific to what has produced a better yield on the follow up. So if they look at a set of keywords, they are now trying to trace those sales all the way back to, were these consumers, or were these business people? If they’re business people, are they going to come back and buy again from us or should we let them go. So they are then trying to pull this into two sets of campaigns, they’re trying to do a B to B campaign and a B to C campaign, and the B to C ends up feeding the B to B.
So once we find something, a set of metrics that works well for a B to B client, we import those from the B to C into the B to B set of campaigns.
Steve: Okay so what for example would be a good metric?
Daniel: For example we’ve found places where someone searches on a specific skew. When they search on those skews, we’ll have a bucket in the B to B high priority that we won’t have the negatives for that, whereas the consumer one will have the negatives, and the bidding rate in the B to B is about double what the B to C is.
Steve: I see.
Daniel: So we’ve picked out habits and keyword subsets where B to C people – a consumer would never search for a skew or GTIN of a product, a business person looking for pricing on those would.
Steve: Wow, okay.
Daniel: So when those opportunities show up, we want to guarantee that we have the most visibility possible.
Steve: Interesting, so are you also ramping – you’re doing retargeting as well, right?
Steve: Retargeting at least, so you are bucketing the business customers differently in terms of your remarketing as well, right?
Daniel: Somewhat yes, they get into a B to B emailing queue, we don’t have to as much trying to remarket them as we would just the general consumer, so we leave remarketing pretty flat and then we feed those to the sales guys to go after them.
Steve: So how do you keep track of all this, I’m just trying to think of how I would do it here, so you’re tracking different keywords that lead to higher sales volume like two or more is what you mentioned. How do you make that correlation?
Daniel: A lot of spreadsheets.
Steve: Okay, I was going to ask if it was manual or whether you had something on the backend that kind of…
Daniel: We actually have two very talented data science guys that we picked up and taught them marketing specifically for analyzing these correlation sets.
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Okay, I wonder how many other people are doing this, I mean in your space it’s really competitive, I feel like it’s almost a must, right?
Daniel: Very few people take the approach that we do; most people invest into marketing, find out that their view is that it’s unprofitable and then they turn it off. Our view is specifically if something is unprofitable, turn it down, or relook at the opportunity to figure out if there is money coming out somewhere else. For example if you sell antivirus and then they end up buying Office and a mouse and a desktop and a monitor and all this other stuff, then antivirus is also on your most valuable PLA product.
Without understanding what’s going on in that repeat buying zone, effectively PLAs are just one time sale. So anyone who’s going into the PLA market to sell a single product, it’s dangerous because you really want to focus on the repeat buyer and what you can resell after the fact, because the cost of PLAs are going to keep going up. The cost of selling a $20 knife will probably be $20 within the next year.
Steve: Especially since Amazon is jumping in there, right?
Daniel: Well Amazon has been in there and Amazon’s behavior point was they didn’t have the data right before. So now they’re going to buy the penny buckets on there and hope that their brand and their SEO is going to take over, but that doesn’t stop you from for example if you’re a reseller like we are using our ability to do the SEO correctly on these things.
If we buy a product cheap enough and they’re selling on Amazon for cheaper, we just direct them to Amazon and keep a portion of the profit and have somebody else fulfill it.
Daniel: So if you’re managing the spend correctly and you’re managing the people, like somebody lands on your page, you get their email, maybe you’re not the cheapest price and you can extrapolate that, send them on to Amazon, then remarket them again.
Steve: Interesting. I’m just trying to think, so on the backend can you recommend any software for like people out there who are listening to actually do some of this analysis, or do you literally need like dedicated data scientist people?
Daniel: A really simple software that’s out there Data Feed Watch, a lot of people use it; their analytics platform gives you a nice line item view of what’s working. Also looking into crafting your custom reports on what your click ratios are, what you click throughs are by product ID and taking a hard look at those to see where it’s performing, and then taking a look at what your hooked products are.
We take a lot of the data and sales and we use that pier to throw it in to Google feeds, and then we match, we do a report every week where we match that data, then we just export from AdWords into that to kind of determine what our line item cost per product is. But yeah there’s quite a bit of work, there’s companies like WisePricer that go out there and scrap the data and try to set your prices and do all these different things to try and help you win, but there is no magic bullet that does the profit report.
There is nothing that says, “Okay, here is your analytics data, here is how many people came through PLAs, here is what came back to your site.” You really have to track those opportunities, measure the UTM values when they come in, track that back to the product that caused that sale and the time frame and look at it at a very granular level, and then get used to doing that process three or four times a week to determine what your effective product sales are.
Steve: Okay, I want to leave the readers with stuff that’s immediately actionable – or the listeners I should say. In terms of the feeds – so we talked about a couple of things with the image and the description, any low hanging fruit that you would say that a lot of people are just making mistakes on with just their feed?
Daniel: Yeah, brand in title, brand in title, too many times someone says, “I don’t want to add my brand name in there because it’s not really relevant to the product.” Well throwing your brand in there will get you more organic search, it’ll get you more search in general, so always have brand in title. Like it’s just – it’s one of those things where you’ll never know when a customer will remember your brand and go back to it, and you’ve just gotten free money from it.
So Google PLA has the widest base of customer search for products, not putting the brand in title is like paying an extra quarter on every single click.
Steve: Do you put at the end or the beginning?
Daniel: Typically you put it at the beginning, but if you’ve got a long brand name you can always toss it at the end. I know some companies that are resellers where they’ll take their company name and toss it at the end just so they get that brand authority.
Steve: There is already a field in the feed for brand though, that’s not good enough?
Daniel: Correct, that’s not good enough.
Steve: Okay, any other tips than just the feed?
Daniel: Make sure the first line of your description has the keywords that you want people to search for.
Steve: Okay and we talked about structured markup, any tips there or – actually let’s talk about it, we forgot to talk about that. So why is structured markup important, first of all what is it and why is it important?
Daniel: All right, so structured markup is effectively how you’ve told Google to read your site. So in the case of products, Google is going to scrap your site and they’re going to try and gleam whatever data they can. Unfortunately it’s not a great scientific process for them, like they need to get the GTI end of your product, they need to know what the product ID was in your feed that it’s running against.
They need to be able to cleanly read the images and alternative images, they need to know what the description content was, they need to know how many reviews are on this page, who wrote those reviews, how many reviews you’re getting a day. It’s all really, really important, so structured data is how you communicate that to Google.
If somebody doesn’t have structured data, they’re not getting stars on their organic search, they’re not going to get the stars on their product listing ads, their dynamic remarketing for product listing ads is not going to work correctly. A lot of things will go much, much better on a straight up performance level if Google can read that information.
Additionally if your price changes on your product page and your pricing structure data is not set up correctly, they’ll actually pause your product in your merchant center, and so either your feed updates, or if they’ve taken the time to review and say, “Okay this is the new price.” So having that structured data there is important because they are going to read it every time they send a customer there, and if they have to make an adjustment, you’d much rather communicate that information to them.
Also things like in stock, out of stock, if a product goes out of stock on your site, and you don’t want to market it any more, then you can update that out of stock in your structured data. Google will pick that up when a click comes through, and they’ll mark it out of stock for you so that you’re not spending advertising on it.
Steve: So in terms of the structured data, does that imply that the structured data can be different from what’s actually on the page, like Google doesn’t pay attention to the page that much anymore?
Daniel: Correct, so in the case of products, you might want to have a better structured data that is great content for — in our product descriptions we have lots of pictures, we have lots of tables, we have all sorts of different content which we don’t necessarily want Google to read. So we give Google a optimized bid of description that we feed them into a JSON variable underneath the HTML that’s optimized for what we want to show to Google for when they search our index or page.
Steve: That’s interesting, I was thinking the opposite, like for the structured data I would include like a 1,500 word post or something, but to make the page look okay in the description I would just keep a small paragraph, what you’re suggesting is the opposite of that?
Daniel: Right, so you still want to have whatever the SEO standard is, but you want that to be in a clean readable format so that they just read through it, they don’t have to read line breaks, all of that other stuff, you just give them the structured data and say, “This is the information on the product, read it, go back to business.”
Steve: Okay, cool Daniel, man we’ve actually been chatting for 40 minutes about Google shopping, who would have guessed it?
Daniel: I love Google Shopping man.
Steve: No you are a master at it, it’s crazy the amount of work, I mean I know selling software is difficult, but it just seems like all the extra stuff that you’re doing on the backend is essential, and you are right, I have students in my class, where they try these things and it doesn’t work and then they give up. But they’re just looking at it from the point of like a direct sale.
Daniel: Sure, and it really has to be sculpted over the organization, you need to pick a sacrificial lamb that will get people through the door, put it out there and work hard to retain those customers.
Steve: So would this all change if you had your own branded products, I mean it wouldn’t need to be this intricate then, right?
Daniel: Correct, so if it was a branded product, we would basically state that we would pay 50% or 75% of the first product sale to get them in the door, then we would focus the entirety of our profit generation efforts on the backend.
Steve: Right, okay, so backend meaning like email and direct sales?
Daniel: Email, direct sales, up-sell, down-sell, all of those components because Shopping is getting a lot more expensive and it’s purposely difficult to manage. You need a lot of people to do it, so your effective profit rates will fluctuate wildly; it’s just not a metric that should be used to generate direct profit on its own.
Steve: Interesting, all right Daniel, thanks a lot for your time and if anyone wants to know what you’re up to, where can they find you and I know you got a bunch of businesses on your own, feel free to tell everyone what you’re working on.
Daniel: Sure, so My Choice Software is our ecommerce business. We have the Safe Harbor Group, which is or merchant service business kind of specifically targeting the ecommerce community. Then we have Business Tech Pro which is our software development group that develops apps, websites, marketing funnels, different products for different clients, and then we have Extended Shield which is our new B to B application allowing businesses to sell extended warranties for all of their product offering stuff.
So if you sell diamond rings we basically create a warranty, the tax rate on the end of your ecommerce process or in your store, and you’re able to produce that up-sell afterwards. Then I recently started a new blogging initiative called Sound Decisions where I’m taking all my headaches and frustrations with all of these different businesses and opportunities, and kind of venting them out there.
So we’ve got some interesting stuff about the upcoming changes to Shopify, we have some interesting stuff on how to develop with multiple people on there and then kind of some business driving decision articles as well. So I’m not nearly as good as you Steve, but hopefully one day I’ll be able to quit my job as well.
Steve: Hey don’t forget to mention your Shopify plug-in.
Daniel: Yeah the Shopify Plug-in is a new categories app. We took all the power of standard Magento tree categories and we brought them to Shopify. So it’s absolutely a game changer for anybody looking to migrate to Shopify, it gives you that last element of organization that you’re really truly looking for.
Steve: Yeah, if you have like nested options and that sort of thing, right?
Daniel: Yeah, you can go infinitely deep, you can have 1,000 category depth trees.
Steve: Cool Daniel, hey it was a pleasure having you on the show; I really appreciate your time man.
Daniel: Hey, thank you so much Steve.
Steve: All right, take care.
Daniel: Take care.
Steve: Hope you enjoyed that episode. Selling box software is probably one of the hardest products to sell. Daniel has actually taught me a ton about Google Shopping, and I’ve been able to take his advice and improve my ad visibility dramatically. For more information about this episode, go to mywifequitherjob.com/episode168.
And once again I want to thank Klaviyo for sponsoring this episode. Klaviyo is my email marketing platform of choice for ecommerce merchants, and you can easily put together automated flows like an abandoned cart sequence, a post purchase sequence, a win back campaign, basically all these sequences that will make you money on auto pilot. So head on over to mywifequitherjob.com/K-L-A-V-I-Y-O, once again that’s mywifequitherjob.com/ K-L-A-V-I-Y-O.
Now I also want to thank SellerLabs.com as well. Their tool Ignite is what I use to manage my Amazon pay per click campaigns. Instead of the old tedious way of generating reports and analyzing your ad campaigns in excel, Ignite aggregates all that info for you in one place and allows you to quickly visualize your data to make decisions fast.
So not only does it save time, but it also makes managing your Amazon campaigns so much easier. So head on over to sellerlabs.com/steve and sign up for a free 30 day trial, once again that’s sellerlabs.com/steve.
And if you’re interested in starting your own ecommerce store, head on over to mywifequitherjob.com and sign up for my free six day mini course. Just type in your email and I’ll send you the course right away, thanks for listening.
Outro: Thanks for listening to the My Wife Quit Her Job Podcast, where we are giving the courage people need to start their own online business. For more information visit Steve’s blog at www.mywifequitherjob.com.