044: Drew Sanocki On What It Takes To Start A Successful Ecommerce Store Today

Drew Sanocki

Drew Sanocki randomly reached out to me one day and I’m glad that he did. Drew is a seasoned veteran when it comes to ecommerce. He started and sold a successful dropship furniture company DesignPublic.com. And today, he blogs at DrewSanocki.com and offers ecommerce consulting at Mineral.io.

What’s also cool about Drew is that we have a bunch of common friends that went to Stanford together. Enjoy the interview!

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What You’ll Learn

  • How to find a profitable niche for your online store
  • How to validate your niche before investing a large amount of money
  • How Drew feels about dropshipping today
  • How to get your first customers in the door
  • What is working and what isn’t working in ecommerce today
  • What are the major pain points for ecommerce companies
  • How to market your online store
  • How to run effective email campaigns

Other Resources And Books

  • Powerhouse Campaigns – Drew’s ecommerce marketing course
  • The Lean Startup – Eric Ries
  • Market Samurai
  • Transcript

    Steve: You are listening to the My Wife Quit Her Job podcast, where I bring in successful bootstrapped business owners to teach us what strategies are working and what strategies are not. Now this isn’t one of those podcasts where we bring on famous entrepreneurs simply to celebrate their success. Instead I have them take us back to the beginning and delve deeply into the exact strategies they used early on to gain traction for their businesses.

    If you enjoy this podcast please leave me a review on iTunes, and enter my podcast contest where I’m giving away free one on one business consultations every single month. For more information go to www.mywifequitherjob.com/contest. And if you are interested in starting your own online business, be sure to sign up for my free six day mini course where I’ll show you how my wife and I managed to make over 100k in profit in our first year of business. Go to www.mywifequitherjob.com for more information, now on to the show.

    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.

    Welcome to the My Wife Quit Her Job podcast. Today we are excited to have Drew Sanocki on the show. Now Drew is actually a hard man to track down and we`ve actually rescheduled this interview like four times. So I`m actually really thrilled to actually have him physically here. Now here is a little bit about his background. Drew founded his first company Design Public right after getting his MBA from Stanford, and he grew it into a premier online design retailer and back when no one was doing it, he negotiated drop shipping deals with his vendors so he didn’t have to carry any inventory.

    Now eventually he sold his company in 2011 and then he founded Mineral.io which is an agency focused on delivering outsourced marketing services to ecommerce store owners. Bottom line Drew knows a lot about ecommerce and he helps companies both large and small with their marketing as well. And with that welcome to the show Drew, how are doing today man?

    Drew: I`m doing great. I`m excited to be here.

    Steve: Yeah you know originally I had all these plans of asking about Design Public…

    Drew: It was like in 2012.

    Steve: Yeah that was– it was a while ago so…

    Drew: The interview was originally scheduled.

    Steve: Yeah, right exactly. Well I was going to ask you about Design Public, you know since you spend a lot of your time consulting companies now, kind of all across the board I thought it would be kind of more interesting to get your take on how to kind of get started as a brand new ecommerce entrepreneur today. You know a lot of the stuff that you did back in the day of design public, has probably changed over time, right? So I want to kind of focus on getting started today. So before you start any sort of online store you have got to pick your niche, so let`s talk a little bit about niche selection. Let’s say you were to start all over again, what would be your process for finding a niche to pursue.

    Drew: You know Steve, I think I do everything that everybody else has talked about online, if you search for niche selection and I do all the same things. I use the Google keyword tool, I look at the Google trends, I look at my own passion and I do all those things, but I think the one thing that I would add in there, the one wrinkle would be just testing the niche earlier in the process like before you go about building a store around it. You know, say you have identified what you think is a great niche and all lights are green, and this one looks good like you should get a lot of traffic and very little completion. I still think we are missing a step between that and okay build yourself a fine store with that product.

    Steve: Okay, but in regards to the actual niche selection process, do you have any sort of guidelines that you go by when selecting something– you mentioned you know if something is good, then you go into the validation process, but what are the guidelines for what is good?

    Drew: Okay so that would me more– I look back at Design Public and I really think I timed that really well, and I was lucky it was a nice drop ship retailer where our traffic could be acquired very cheaply through SEO, and just think that those niches are a few and far between today. So today I would look for a couple of other things. Number one would be kind of a relatively high price point. I like 50 preferably higher than 100 dollar price point. And that’s because it gives you some extra margin on the purchase to put some money back into marketing, in particular paid search. You know from working with our paid search clients we very rarely see paid working for a price point below 50 dollars. So higher price points– and what I`m getting at there is number two it`s like a higher life time value. How can you get the life time value of the customer up?

    Steve: Okay.

    Drew: And in that case it would be nice to have some recurring revenue too. So is this a product that could be a subscription product, or is there a natural life cycle I think I could sell to customers on where they are buying several products from me? Because again higher life time value that just enables me to enter a market and have a really high– afford a higher cost of customer acquisition. So those are two things, I mean and obviously one would be passionate about the product…

    Steve: Okay.

    Drew: I do want to be able to you know to market it via email because email is sort of near and dear to my heart. So that’s kind of what to look for.

    Steve: Okay and then in terms of you mentioned recurring revenue, what kind of products kind of fall in that space when it comes to ecommerce that you can think of?

    Drew: That exists now?

    Steve: Yeah like what are some likely candidates?

    Drew: Without giving away trade secrets.

    Steve: Okay.

    Drew: I`m working on one right now, but…

    Steve: Oh are you, okay you don’t have to reveal then?

    Drew: I think anything that– automatic replenishment, things like supplements and protein powders and those– I really like those spaces where you can send somebody a product every month. I get my coffee from Craft Coffee over Brooklyn where they send me a different selection of coffees every month, I get my razors from Harry`s which was started by one of the warbe [phonetic] guys and they you know send me razors every couple of months, so..

    Steve: Because they are kind of consumables.

    Drew: Yeah looking around for these consumables. If you can get a consumable, but also one that has a be to be angle I think you are golden, and there you are in the realm of sort of business supply companies.

    Steve: Okay and then when you are looking at competition, what are some things that you are looking for?

    Drew: I typically– when I`m looking at a niche I will do the same thing that you probably would. I`ll crack open a Google key word tool, I look at organic traffic searches for that product. I like to look at affiliate programs to see if there are any robust affiliate programs in the niche, that’s usually an indication that that’s a pretty mature niche. I look at– I use a tool called Market Samurai which gives me a read into what competitors might be paying on the ads.

    Steve: Okay.

    Drew: For that niche and the higher they are paying I can assume that it’s a– you know be a harder niche to enter, and harder to drive traffic too.

    Steve: So let`s say hypothetically that you are doing your research and on the front page of search you see a bunch of big buck stores, Amazon.com, Target and that sort of thing, is that a deal breaker?

    Drew: No, because I think you know if it were a deal breaker then any number of those retailers that I named earlier probably wouldn’t exist. I think there also has to be something where you can add some value personally, and I really believe in small retailers creating great lifestyle businesses in trying to differentiate that value, so one example is whippingpost.com. Ryan Berg I have worked with before, he is sort of the signature Shopify store and he creates these great leather bags in his apartment in Brooklyn, sorry in New York.

    And he is just you know if you Google leather bags there are a million leather bag companies on the first page of Google, but he has been able to carve out a niche and tell his story through great branding, great use of video. I encourage you go to check– to go and check out his site and watch some of the videos. He’s just a really good job and it`s just him. So I think he kind of shows how you can compete with the big guys just by niching down your audience enough, and in really telling a good story.

    Steve: Okay, so leather bags so that is really common place. I mean that’s like a pretty common good. So let`s go something’s along those lines, let`s say you have a potential niche, we talked about validation a little bit. So what would be your next steps to kind of validate a niche before you actually start investing serious cash in it?

    Drew: Yeah, this is actually– I mean I go right to validation so quickly, I don’t– I think everything up until validation is sort of hypothetical, right? Like we could pump a million niches into Google keyword tool and come up with our top picks, but at the end of the day, I do want to test them. And Eric Ries wrote this book called The Lean Startup, it just– it really resonated with me, and I thought you know well he is usually talking about software businesses, but I think that should be applied to ecommerce and we`ll call it the lean ecommerce start up or lean commerce whatever you want to call it, but the idea is can we get a sense of what the cost of acquisition is? Can we get a sense of how hard it is to drive customers before we go through the work of building out our ecommerce platform and lining up our products and being able to fulfill. So…

    Steve: Okay.

    Drew: I think that’s where any new entrepreneur should spend the most time.

    Steve: Okay, so let`s go into a little more detail. So let’s say you want to sell leather bags since you brought that up, how would you go about validating your bag?

    Drew: You know you could read The Lean Startup, but the essence of it is you come up with this– what`s called a minimum viable product, an MVP.

    Steve: Okay.

    Drew: So, what’s the minimum amount of work you can do to achieve some learning? And in our case the learning is going to be about whether it’s a good niche or not, right?

    Steve: Mm-huh.

    Drew: What we are driving towards is, what is the cost effective way to drive traffic to my site, to drive customers to my site you know, preferably at a price that allows me to make a profit?

    Steve: Okay.

    Drew: So, that’s what we are looking for, that’s the learning we are looking for. So the best way I`ve seen is a really incremental way where you just start initially with something as simple as the Adwords campaigns and just maybe you know where you are driving some– you are just creating the Ads, you may be may not even– you might not even have a landing page for the traffic, but you start taking out some Ads for leather bags, men’s leather bags and just see what the cost per click is, maybe you are driving the traffic to a competitor for a while.

    Steve: Interesting, okay.

    Drew: Yeah, so that’s just a very quick way to get a sense of the cost per click, and then you move quickly to okay if I know how much a click is worth, what is a conversion going to be worth to me, and that’s where in the realm of building up landing pages.

    Steve: Okay.

    Drew: This is getting easier and easier to do. I did it a couple of years ago when I looked at selling a certain kind of desk, and I set up a simple word press installation bottle– a landing page theme of which there are like 1000 now. Had a one page landing page which featured a couple of desks and a little op-tin button which said hey! Sign up here when we launch, like here is a little more information on what we are going to launch.

    Steve: Okay, so sorry go on.

    Drew: No I got a good sense of how hard it was to drive conversions there, now there are services like leadpages and ClickFunnels and Instapage and lander to name a few, that allow you to do that without even quicker without using WordPress.

    Steve: Okay, so let me just summarize what you just said. So if you have a bag that you want to see, before you even create the prototype that you could put down the prominent features of that bag on a landing page and then collect email addresses by driving ads to that landing page. Is that right?

    Drew: Think in terms of kick starter, right. I mean these aren’t really ecommerce companies but those guys are all doing MVPs. So any time you come up with a new product concept, like they make a video, they put some information on it, they throw it up on kick starter and they get a read on demand you know, and it`s not quite the same for an ecommerce retailer, but I would follow their lead and I think that is what you want to do. And that initial test would be followed very quickly by an actual sort of page that you know, looks like store that has like a buy button and even then I wouldn’t recommend allowing that person to check out and give you money.

    But you can do things like put a price on that page, so here is my new desk; it’s going to retail for 100 dollars, click here to buy. They click that button and they will go to another page where it`s like hey we are launching, and thanks for your interest we are launching in the fall, you know sign up and we will let you know something like that. But the important thing is you could count that as a conversion, you know you set your goal in Google analytics that that click was a conversion, which you then if you look back at your adwords and how you’re driving traffic will allow you to get a cost per acquisition. And once you`ve found that and if you can determine that you can drive traffic cost effectively, then it’s like you`ve got the green light.

    Steve: Okay and then– So that’s assuming that you are creating your own product, let`s say you wanted to white label some products, or sell your own products or drop ship– so first of all actually since you did drop shipping a long time ago, do you recommend drop shipping today as your primary revenue source?

    Drew: It`s sort of hard to answer because I think drop shipping is just a techniques you know and it may work in some markets and it may not work in other markets. Where people might get tripped up is when they make that technique or that tactic into a strategy. Like I`m going to be a drop shipper no matter what you know, but I think that is sort of putting the cart before the horse, like it applies to some categories and it doesn’t apply to others.

    Steve: Okay.

    Drew: But I would say it`s hard to– it`s much harder to do now than it was ten years ago, and although it allows you to get up and running quickly, I don’t see as many retailers sort of you know blowing the doors off with drop shipping.

    Steve: I guess what I’m trying to say is, would you go the landing page route, if you already have products ready to go, would you skip that step and maybe go straight to the shopping cart at that point?

    Drew: I would say you know there’s still the danger like of getting orders that you cannot fulfill.

    Steve: Okay.

    Drew: If you realize that it’s not an issue you want to be in.

    Steve: Okay.

    Drew: So I would just be worried of that.

    Steve: Okay, and then so were gathering emails on this landing page, what do we do with these email addresses that we’ve gathered?

    Drew: You know I think if you decide that you’re going to go ahead with that launch, you want to– that’s your initial presale list you know. I think what you’re probably getting towards is building up– the ideal case scenario is something like Fab or Gilt. Fab went from zero to two million subscribers in eight months, right? Before they launched and you look at Gilt and they are above three million subscribers you know and they’ve get 70% of their new members come from email, email to email referrals, right? So those emails have value and I think building up a prelaunch list is a great idea for anybody who’s considering launching a new business whether it’s ecommerce or not.

    Steve: Okay, so let’s jump ahead a little– so you would do all this stuff before you would even look at product sourcing or any of that sort of thing, right. One you’ve felt comfortable about your niche, then you would actually start proceeding further, right?

    Drew: I would yeah.

    Steve: Okay.

    Drew: It kills me because I think like any entrepreneur you want to get this site up you know you want to start taking orders and work on tweaking the designs, but you know that stuff takes a lot of time and you feel like you’ve got to think in terms of the time value of money. And extra week or two spent validating the idea really-really will save you months down the line.

    Steve: Okay, and assuming the validation all goes well and you launch, how do you get your first customers in the door, what’s your initial launch strategy?

    Drew: You know what, I can talk about what I’ve seen working really well.

    Steve: Okay.

    Drew: And that is it’s really like a bottom up approach where you become part of the conversation for a while, right? Like you decide you want to sell to get back to our example desks…

    Steve: Okay.

    Drew: All that stuff modern design desks. So you don’t just throw up your store, initially you start with the landing pages, and you maybe come up with your brand, and you can just get involved in Twitter and get involved online in the conversation about modern design, right? And maybe you start rolling out some blog posts and just interacting with users and I think out of that you want to build up a little bit of an opt-in asset like a permission marketing asset. People who might be interested in your product that you’ll ultimately launch too, so that you know I think you want to have a little bit of pizzas behind your launch, right? Like you want to hype it up, you want to have a bit of an audience there and make it into an event. So if you’ve gone the route of– the companies that have done well, like Fab is probably one of the better companies that has done this. If you’ve got a million people on your list before you launch, you sort of can’t loose at that point.

    Steve: Sure absolutely. So what do you find– okay let’s talk about desks as an example, where so you find people that would be interested in desks, where would you go to?

    Drew: You know I think it’s easy to market, whenever you choose a market; you want to think in terms of where do people congregate, right? And I think the markets are better when they congregate in the same place. So the questions you should be asking yourself are you know do all these people read the same blogs? Like if I’m going– if I’m going to sell gold do they read survivalism blogs, or if I’m going to sell modern designs are they all hanging out on apartment therapy and designs bunch. And if you can narrow it down to a handful of blogs that are sort of read by the industry, then I think that’s a great sign because it really simplifies your initial outreach in marketing.

    Steve: Okay, and then once you’ve identified these places, what is the next step, do you kind of ingratiate yourself into the community?

    Drew: Yeah, you do and you know I think that, I think it’s like starting a blog actually I think ecommerce people could take a lot of lessons from starting a blog and just the amount of legwork that it takes to do that kind of outreach. I know people want to just set up the store and kind of watch orders come in, but in my experience it works much better if you’re Ryan Barr or running Whipping Post, I mean that guy developed a relationship with all the bloggers in his niche you know, all the fashion bloggers.

    He was just on their radar and he didn’t outsource it, you know he did it on a very unscalable way, like personal emails, figuring out what every blog was about and personalizing the email to that writer. And I think that’s the way you do it in the early days, you do things that don’t scale and you kind of poke around and really push until you find one or two things that potentially could scale, and ultimately you build your business around that.

    Steve: It almost sounds like you’re recommending that you go like the blogging community route before you actually even launch your online store, is that…?

    Drew: You know it’s– I’ve seen both things happen, I think it’s sort of– it’s figuring out what your acquisition channel is going to be.

    Steve: Okay.

    Drew: Right? So you know the landing page route is more of if paid it’s going to be a primary acquisition channel earlier on than you know the landing page route works, like lets drive traffic to a landing page.

    Steve: Okay.

    Drew: But that might not work. If you’re in a different niche that might call– may be the design niche for example, maybe it is more, I’m going to start with blogging and then ultimately roll out a product. So it’s you know it just– I think it depends on the product and what success you find trying these different acquisition channels.

    Steve: Okay, and so let’s go into a little bit more in-depth in regards to acquisition channels. So you’ve consulted for a lot of companies, what have been some acquisition channels that have worked for some companies and not others, and which one do you actually recommend trying when you first start out?

    Drew: Okay.

    Steve: Is that too loaded of a question?

    Drew: I’ve seen hundred million dollar companies built entirely off of adwords, and I’ve seen other niches where they can’t get a single sale off adwords. So you know the adwords product is much more like a promotional product, promotional product retailing, drive people to a product page, they’re buying products that are more sensory or kind of maybe more bid to see. I see them a little bit more effective with a more complicated and a more complex funnel where you’re driving traffic to a site, a landing page, you get that person to opt-in to your list, and then you build up trust and you build up your brand over time and ultimately sell.

    So you know one thing that is kind of working now for several of the fashion retailers I work with is Facebook ads. Driving people to you know your blog or content page where you opt-in to get educated about the product you know to find for example what are 10 ways that I can use this product to decorate my house? Or what are some inspirational ways that I can wear this scarf? And ultimately that email sequence would end with a call to action. So it’s not direct response you know it’s not taking out an adwords ad and driving someone to the product page.

    Steve: Okay.

    Drew: If you can get that to work do it, but for more and more niches I think that’s harder to do.

    Steve: That has– yeah your exact strategy is how I eventually got my Facebook ads to convert. I drove them to an info essentially a blog post that taught people you know unique ways to make their wedding special, and in that article I had links to my products and then opt-in forms all over the place, and I’ve kind of market them on the back end. It’s a lot– you really got to track that customer; you don’t get conversions right away which is kind of a problem.

    Drew: It’s a lot of work you know I think, but its work that your competitors may not be doing, right? And if you’ve got the time, do it. I have an article on adwords I think on my blog.

    Steve: Okay.

    Drew: That talks about this you know this– a technique I call it the beast mode, adwords beast mode, right?

    Steve: Okay.

    Drew: Which is a technique that I see working for retailer after retailer, and it’s essentially what you describe. It’s spending the time to be more relevant with your funnel, and it’s not just– don’t just mail it in, don’t just throw up the adword ads, or the Facebook ads. You’ve got to think about the personas that are buying from you, what kind of ads they would click on, what kind of content they would find interesting, and how to build a relationship with them over time usually through email. The downside is, all those things take a lot of time, but the upside is the big retailers aren’t doing them.

    Steve: Okay, good point and that’s actually a great segway to my next set of questions for you involving the email marketing sequence specifically for ecommerce. So we got their email address through some opt-in, through some ad that we’ve driven to it, and it’s going to be so sort of info sequence. How do you kind of structure that to prepare yourself for the final sell at the end?

    Drew: You know I take a lead, I’ve always taken a lead from the affiliate marketing community, going back to 03 that’s how I learned marketing online. Not from Stanford, not from business school you know and it’s because that’s like the street you know these guys are out there testing new techniques and anything that is sort of innovative in marketing comes from online marketers, or like information marketers.

    Steve: Okay.

    Drew: So, what is hot now in information marketing is this concept of a sales funnel, right? So the sales funnel being you know not just the typical ecommerce sales funnel where you– everybody’s heard that you drive 100 people to your site one buy, one of them buys, right.

    Steve: Right.

    Drew: But the sales funnel by which I mean you’re driving people to your site, they are– they see a lead magnet. Something that gets them to give you a little bit of value you give them in exchange for them giving you their email, right?

    Steve: Okay.

    Drew: That’s step one, now you have your email, then there’s step two would be this gradual engagement sequence, which is a welcome campaign, three to five days where you’re highlighting various products on your site, building up trust with them at the end of which is a call to action to purchase. Then there’s the offer which in the case of ecommerce is you know product page offer. Something you know typical product page, they purchase and then there’s a whole sequence that happens after the purchase, like there a post purchase sequence. There’s a– an MVP sequence, something where you can identify certain buyers and say like “what’s the next product that they probably will buy?” Like how do I market it to them? Which products– sorry which customers are more valuable than others, and how do I treat them a little bit differently.

    And at the very tail end there is the win back sequence or the win back campaign, where you figure out that some of your best customers are no longer buying from you. How do I pull them back to the site? So a long answer to your question, but I would say you take that funnel approach of how a typical visitor first becomes a subscriber, and then becomes a customer, you automate the whole thing just like you would Steve in your case for selling your…

    Steve: I was about to say everything you said…

    Drew: Information product.

    Steve: Everything you said so far like sounds like my funnel for my info product. I wouldn’t, I haven’t implemented anything close to that for my ecommerce store just yet because I didn’t think it really applied as much, but it sounds like from talking to you that it’s very applicable to ecommerce.

    Drew: It is, yeah I mean you look at– when I started at Design Public in 03, no retailers were collecting email. It was rare to go to an email– to go to an ecommerce retailer and see a pop up or something, but the information marketers were like on their sites, like they knew it and I started collecting email. I had the pop up on our site even though everybody in 03 said pop ups were annoying, and still annoying, but now when you visit nine– probably nine out of ten retail sites when you visit them you are going to see a pop up. So like they get it now, they get that email is valuable. Email an email subscriber is worth something like three times the regular subscriber that you drive to your site verses the regular visitor in just total sales.

    So, I think they understand that getting the email, but most retailers still aren’t really doing anything with that you know they may just dump you into their regular promo sequence, and you’re going to get you know the bed bath beyond 20% off coupon every week. I think how a small retailer can excel is by putting their information marketing hat on, and building that funnel you know treating customers differently based on where they are in the funnel.

    Steve: So, I think I already know the answer to this question, but what’s your take on giving coupons out in this sequence?

    Drew: I think there’s a use for coupons, I wouldn’t say never give them out. I think too many retailers give them out too readily. I go to my inbox and I search for J. Crew or something because I’m on their list, and it’s like bum-bum-bum, I can see in my Google history like a million coupons, so it’s…

    Steve: Yeah, same here.

    Drew: Yeah and the issue there is subsidy cost, right? So subsidy cost is a hidden cost, but it’s a cost you bare nonetheless, and it’s basically you are giving coupons to customers who would’ve bought at full price anyway. So it’s that lost margin that’s called the subsidy cost, and that’s the danger with couponing. So the way you want to use coupons is in a way that reduces the subsidy cost, you give the coupon to the customer who requires that coupon to comeback and buy not to the customer who would’ve bought anyway.

    Steve: How do you figure that out?

    Drew: A great way to do that is if you look at a standard win back email marketing campaign, this is the campaign designed to pull customers back, they’re usually structured to look at the average, what’s it called intra purchase latency, so the average time between a purchase for customers. And when a customer crosses that threshold, say you know my typical pillow buyer buys a pillow every 60 days or a pillow and then 60 days later they’re buying sheets. If it gets to 70 days or 80 days or 90 days, they’ve crossed over that threshold, they’re probably not going to buy again, like that’s when I give them the coupon, so that’s one thing.

    Steve: Okay.

    Drew: Is looking at that latency between purchases.

    Steve: Okay.

    Drew: The second thing would be increasing the coupon amount with the time it’s been since that customer has purchased. So initially you give them the 10% off coupon, maybe 30 days later they get a 15% off coupon and 180 days later that customer probably ain’t coming back you can give them a 20% coupon, right? So that’s called a promotion ladder, and it and it gives away promotion dollars in proportion to the likelihood that a customer is going to defect. It’s just a supper efficient way to pull people back to your cart.

    Steve: Okay, and then what services do you recommend to implement this sequence.

    Drew: Unfortunately with ecommerce you are in the realm of like pretty sophisticated email marketing systems usually if you want to implement something like this.

    Steve: Okay.

    Drew: However you can compute these things with a spread sheet with just your transactional table and you can set them up in MailChimp. You know you can set then up in MailChimp or AWeber or any of the other more common email marketing softwares. It’s usually easier to do it in something like a Dot Mailer or Exact Target, because they are built for it, but yeah if you are on a budget, you could do the same thing with Mail Chimp.

    Steve: But you would have to have some sort of trigger based on when they bought and feed that information to your sequence somehow, right?

    Drew: Right, and so there are a couple ways to do that. This might be a good time to mention my class.

    Steve: Yeah you can. Feel free. Peg away.

    Drew: So I’m teaching this in a class called power house campaigns, and I talk about the seven email marketing campaigns that pretty much work for every retailer I’ve ever come across. And one campaign in particular is this win back campaign. So yes there’s the deluxe way of setting it up where you have this automated campaign using something like Exact Target. But if you were to do it with something like Mail Chimp it could be as simple as you know– you might not be able to automate the whole thing, but if you have got their ecommerce 360 tracking set up, login once a month and send the email to a certain segment. So it doesn’t have to be completely automated, but I think you could still get a lot of results.

    Steve: Okay, and so Drew what are this seven email marketing things that all the top retailers are using. You want to give an overview?

    Drew: Yeah, I like lay it all out right now.

    Steve: And then I’ll charge for this interview.

    Drew: Well, I think you know right now we are recording this and it will probably go live at a different time, but it’s what October, right? So first campaign is going to be holiday, and I am talking a lot about how to automate, best email marketing campaigns over the holidays. Like one of the best practices to get your customers to buy, to get your highest value customers to buy more. The second would be you know an early engagement sequence, or a welcome campaign. So you get somebody to sign up for your newsletter, what’s the exact sequence that you send them in order to increase their likelihood of purchase?

    Steve: Okay.

    Drew: Third, ascension campaigns. These are your ongoing email campaigns that go every month or every other month. But they can be sent in a way that’s pretty highly automated and there are certain best practices around how to do that.

    Steve: Okay.

    Drew: Third, one you have talked about a lot abandon cart campaigns, and ways to optimize the purchase. Fifth would be post purchase campaigns. So how do you treat somebody who has just bought from your store in a way that increases their likelihood that they will buy again? So there’s a certain sequence there, a certain data you look for in your transactional record to set up that campaign. The IP campaigns, that’s another favorite one. I’m a big fan of treating your VIPs better than the rest of your customers. And then the last one would be the win back campaigns.

    Steve: So win back is different from abandonment, right?

    Drew: Yeah the– good question though. The abandonment is somebody leaves an item in the cart and you know they go to let the dog out and forgets to come back and purchase, so you would want to use an abandon-cart campaign to pull that person back. The win back campaign is, somebody has been purchasing from your store for a long time, or for an extended period of time and they are at the end of their customer life cycle, it looks like they are not going to purchase from you again, how do you pull them back?

    So win backs are pretty much the highest return use of your marketing dollars. And it’s because you have already acquired this customer, you’ve figured out that he or she is a high value customer, in other words they have order from you quite a bit. And yet for some reason they are not ordering from you again. So one of the highest underlined things you can do is spend the time and money to bring that customer back.

    Steve: Okay.

    Drew: And I’m talking like 500% all the way on your dollar.

    Steve: Wow, okay and so you really need to– so you start one of these campaigns I would imagine by funneling out your best customers, and then you put them through this panel that you present in your class.

    Drew: Yeah, first step is identifying who they are if you don’t know based on order history. Second step is profiling that activity, and third step is designing an automated email campaign to bring them back. And it’s just– you know I think with retailers there’s a hole, like you get in this– you have this ego about your site, and you just think that you are always top of mind for your customers, and you know fact of the matter is you are not. They buy from you, they buy from your competitors, like customers have very little long term loyalty to one brand, right.

    And the typical life cycle, you and I probably experienced this side, and I’m sure a lot of your listeners have. You get into a brand like right now I’m really into Bonobos, I like how their pants fit, I love them. You know I’m ordering from them every couple of weeks, I’m ordering something. I’m building up my wardrobe, but you know that activity will stop probably, and it stopped in a shorter period of time than most retailers realize. I mean it stops in like a couple of months, right so that’s typically how a customer engages with a brand. And the trick is like what if you could make that couple months into six months, or what if you could make it into a year. And that’s where win back campaigns come in.

    Steve: So I was just curious, what is your take on frequency of email sending?

    Drew: You know this is something that really is something I would want to test on a case by case basis. I was reading today that the average retailer sends out seven emails a week.

    Steve: Yeah.

    Drew: In October through December. So you know that seems high to me, but…

    Steve: It seems high to me too yeah.

    Drew: In the early days like I have the opposite problems with a lot of my clients, like they come to me. Especially the startup saying, we don’t want to spare more customers, you know we only want to send every month or every other month. And I think those are usually living money on the table because they– there is a disconnect between what they feel like the customer wants and what the customer actually wants. You know when the customer wants to hear from your brand, when they are into Bonobos and they like your pants, like you have got to show them more pants.

    Steve: I agree and so what is your– similar question I have is what is your take on pop ups as they are actually shopping on your store?

    Drew: Oh, I’m a big fan.

    Steve: Big fan, okay.

    Drew: Yeah again you want to do them in a way that– I think the key to a lot of this is latency. And you can look at data that says the average person in my you know leather bags category buys within– you know buys this specific product within say two minutes of being on the page. And so if I’m going to show them a pop up with an offer to buy, like don’t make the coupon on leather bags show up initially when they first go to that page, because there’s still a high likelihood they are going to buy. Make it show up at minute three or minute four you know and then you are sort of engaging based on past behavior of similar customers, and it’s just a supper effective way to do it.

    Steve: Okay, and you know along those same lines of implementation, are there any services that you recommend to do this pop up just as how you mentioned it.

    Drew: Yeah you know Justuno and Padiact are two that I have used. Are you familiar with either of them?

    Steve: I have heard of Padiact before.

    Drew: Justuno is I think like Padiact on steroids. It’s got– it also does offers. Padiact is a little bit more about leads. In the early days I was using Colorue [phonetic] to do this, like nobody built a tool that allowed me to do it, so I kind of bastardized my own. But I think there are services out there now. Padiact, Justuno are two of them.

    Steve: Okay, and in terms of implementing the more complicated sequence, what were the tools that you recommended before?

    Drew: For email marketing sequences?

    Steve: That’s correct, yes.

    Drew: You know I think you can implement them on pretty much anything. MailChimp, AWeber, Drip are three good ones, at sort of the lower end. At the higher end you have got Exact Target, and Clivo one out of Boston, DotMailer is another. So I think more and more the email marketing companies are getting savvy about automation and rolling out functionality that you can use.

    Steve: Okay, and then what is your take on social media and how much time you know typical retailers should focus on that versus email in your experience?

    Drew: I haven’t seen that many retailers build on the back of social media.

    Steve: Okay.

    Drew: And I’m thinking of let’s see, PetFlow here in New York has done a great job at building up a massive following. The other one that comes to mind is, Diamond Candles. Right that…

    Steve: Yeah I remember that.

    Drew: Yeah, still I think they didn’t– it’s not their primary customer acquisition channel, but they use it to sort of hack growth a little bit by getting their users to do the opening ceremonies through their Facebook. But I don’t– I certainly wouldn’t start there, I never was able to get it to work for us and I’m excluding Facebook advertising from this. I mean more…

    Steve: You are just talking more of a straight fan page and engagement.

    Drew: Yeah.

    Steve: Got it, okay.

    Drew: You know Shopify just rolled out their Shopify stores on for Facebook, I’m not sure how that will change things. What about you, I’m curious what are you using.

    Steve: Well, we have just started running Facebook ads and primarily using just Facebook retargeting to gain the conversions, but like you mentioned before, we drive people coming from Facebook ads to a landing page which is essentially an info site, a blog post. And then from there they can either choose to purchase, or we get them to signup for our newsletter where we have like a sequence of 12 emails that we send them to actually eventually get the purchase. And during this whole period we are retargeting them on Facebook as well, so…

    Drew: That’s a power house campaign right there Steve.

    Steve: It’s a pain in the butt, so let me tell you.

    Drew: You didn’t take the course. Make it easy for you.

    Steve: On the flip side though, the adwords ads just the search versions work much easier, right. I don’t have to update the creative, they just point straight to category pages or product pages and they just convert at a very high level on their own. So…

    Drew: But they’re getting expensive.

    Steve: You know they are not that bad for my niche for some reason, and then Google shopping is actually– converts extremely well for everything, so…

    Drew: Yeah in the realm of paid, you are talking about your wife’s site, now not your information product, right?

    Steve: That’s correct yes. Yeah.

    Drew: Yeah. The realm of paid I think I always tell people like get on Google shopping you know it’s worth a try. It’s usually pretty easy to set up, I mean take– it might take you an afternoon, but the clicks are cheap. Facebook and Google retargeting are probably second as far as lowest hanging fruit go, you know and those aren’t really acquisition strategies per say, they are more retention and conversion, but still worth it. And then now Facebook is rolling up like custom audiences and look alike audiences, do you know what those are?

    Steve: Yeah absolutely, so we only use look alike audiences now because whenever I try to target myself, it ends up not going well.

    Drew: Yeah it’s not yeah, like they know better than you, you know and that is something almost across the board even for the really big guys is working super well. Upload their email file, run ads against that, and then create similar audiences to that.

    Steve: Yeah, and then what’s your take on Google display ads. Have you ever been able to get that to work, because I have not?

    Drew: No so far.

    Steve: Okay.

    Drew: That’s in the hierarchy of where I would spend my ad dollars, or where I would at least try, I would put that sort of towards the bottom.

    Steve: Okay, what’s attractive about it though is once you find something that works, it seems like you could just up the spans to like infinity and make a lot of money, right?

    Drew: Yeah, you could make an infinite amount of dollars.

    Steve: That’s why it sounds attractive to me right, because there is so much traffic going through there, but…

    Drew: You know you really got to dial it by– this gets back to what we talked about at the very early part of the podcast. When you can find an audience that is congregating on one or two sites, it’s a great way to like get your ads in front of that audience.

    Steve: What’s your take on like banner ads and blogs and that sort of thing, have you tried that?

    Drew: In the early days, I don’t think I have ever gotten it to work. Usually it wasn’t that price effective.

    Steve: Okay.

    Drew: Blogs, there was this disconnect where at least blogs and my niche were selling to big you know big retailers like apartment therapy selling to Target for example. Target thinks the banner ads are supper cheap, so they buy out all the inventory and apartment therapy could charge a rate where target doesn’t really care you know, but for a smaller company like me their rate didn’t make sense.

    Steve: And hey Drew looks like we have already been talking for like 45 minutes, are there any sort of– you have been doing this clearly for a long time, are there any good books on just marketing and SEM that you would recommend? And then you could feel free to plug your course again if you have the URL up.

    Drew: Yeah, it’s powerhousecampaigns.com is the course. As far books, I don’t know about books on SEM, but I’m just, I’m a big fan of blogs you know.

    Steve: Okay.

    Drew: Yours, Youderian’s, that’s like the place I would learn marketing.

    Steve: Okay, and then in terms of if people want to ever get hold of you, or ask you questions or see one of your email sequences in action, where can they find you?

    Drew: I blog at drewsanocki.com that’s S-A-N-O-C-K-I. And I talk a lot about ecommerce marketing there. And I’m at tweeter @drewsanocki.

    Steve: Awesome Drew. Hey I really appreciate your insights on the show, and thanks for coming on.

    Drew: Thanks Steve, thanks for having me; I’m glad we finally got this.

    Steve: Yeah, after years and years of trying to get you on the show.

    Drew: Yeah.

    Steve: All right man, take care.

    Drew: Take care.

    Steve: Hope you enjoyed that episode, one of the biggest requests I get from my podcast listeners is that they want to know what strategies are working today. After all many of my guests got started many years ago and some of the strategies that used to work back then may not be as effective in the present. Now I like Drew because he works with a lot of different companies and he has a unique perspective on what is working and what is not. And hopefully Drew’s perspectives today will help you rethink how you choose to run your business. For more information about this episode, go to mywifequitherjob.com/episode43.

    And if you enjoyed listening to this podcast, please go to iTunes and leave me a review. When you write me a review it not only makes me feel proud, but it helps keep this podcast up in the ranks so other people can use this information, find the show more easily and get awesome business advice from my guests. It’s also the best way to support the show and please tell your friends because the greatest compliment that you can give me is to provide a referral to someone else either in person or to share it on the web.

    Now as an added incentive I’m always giving away free business consults to one lucky winner every single month. For more information go to mywifequitherjob.com/contest. And if you are interested in starting your own online business, be sure to signup for my free six day mini course where I show you how my wife and I managed to make over 100 k in profit in our first year of business. Go to www.mywifequitherjob.com for more information and thanks for listening.

    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.

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One thought on “044: Drew Sanocki On What It Takes To Start A Successful Ecommerce Store Today”

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